New SGN CEO Randy Breen on Mobile Development and the Future of Social Gaming

Last week, we talked to the chief operating officer of iPhone game publisher SGN, Randy Breen, for our review of the company's two big games, the flight simulators F.A.S.T. and Skies of Glory. Two days later, he was promoted to CEO, while founder Shervin Pishevar moved to the role of chairman -- a transition Breen says was planned since he was hired. Hoping to get some new insight into SGN's future, we cornered Breen for a longer interview. While the company isn't pre-announcing the new titles it's working on, there was plenty of other ground to cover -- Breen's background with gaming giant EA, the similarities between social games and World of Warcraft, Facebook's successes, and the future of SGN. Be warned that the interview runs a bit long, so we've hidden part; just click through below for the rest. Inside Social Games: What's your reaction to Google's new Nexus smartphone and the impending Apple tablet? How would larger screens impact mobile game development? Randy Breen: The Nexus One is missing a lot of things that Apple does well, like screen rotation based on the accelerometer. Still, it's interesting. SGN won't develop for all smartphones as a category, but web-enabled devices will always be of interest. They mean our products can be built differently. The console version has to be built like a movie, a three year endeavor for the end product. A tablet would make our games bigger and more expensive, but that's inevitable at some level. ISG: You mentioned that most of the development for SGN's flight sims was done externally, by Revo. Will you stick with that model in the future? RB: EA in the early days was modeled after the record companies, so everything was external; over time they became almost the exact opposite. I happen to think that it's a good model to be able to do both internal and external development. We're looking for small developers that want a publisher to help them get to market. We have expertise with certain kinds of problems, we can co-develop, we can continue to support the product beyond their interest. I think it allows smaller teams who may not have the visibility they need to get into the Apple app market, the PR and marketing, achieve things they wouldn't be able to otherwise. As the market expands, the number of things the developer has to be responsible for increases in complexity and scope, so over time you'll see more of these relationships. There are a lot of people in the iPhone and social gaming markets that came out of the console market. They see these same trends. All of us are looking back to what's happened in the past and looking to apply it in the future. If you're looking at the products in the charts, in some cases they're brands of bigger companies, but they're often like products that have been successful elsewhere. ISG: Console game makers, following the PC market, are experimenting with user-generated content in games. Does SGN have any plans in that direction? RB: It's a challenge to figure out how to do that in a way that's acceptable to Apple's standards, but it's an interesting approach. I'm interested in things the community can contribute that are simple, that more people can participate in. Multi-player games effectively introduce the concept on the fly. Instead of an AI character controlled by the device, another object, vehicle or character is controlled by the player. The interactions are, in effect, crowd-sourcing. The best example is Counterstrike. People still play it online. I think what's interesting is that the levels are simple, the paths through the world are simple, but they're organized in a way that drive people psychologically to take advantage of those paths. Focusing on that level layout for instance, instead of what I can make a character do, creates a lot more possibility for the people playing in it. ISG: What's the equivalent to World of Warcraft, MMO-style gaming addiction in simple mobile or social games? RB: The addiction is directly related to the questing systems: the brain activity around discovering what you need to do, going out and achieving that goal, getting a reward, then finding what you need to do next. It's a triangle of behavior that's ingrained in all of us for very basic things, searching for food for instance. The community and the links you create keep you engaged and drive the behavior. One of the more insightful things I've heard came from a friend a few years ago. He said that in real life, you may know the things you need to do but you don't know how to do them. The hardest things in life are complex. With an MMO, generally, you can achieve the highest ranks in the game by just going through the steps and paths in the game. It takes time and requires dedication at some level, but it leads to an absolute outcome. It's more achievable than real life, and you can do fantastic things. When you strip out the front end from an RPG, you're left with dice rolls. You could break it down in a spreadsheet. That's what a game like Mafia Wars [on Facebook] essentially creates. The interesting thing is that you're still motivated by that simple triangle I described. Push button, get thing, go do another thing, get award, go on to the next thing. You see people that may never have played RPGs getting into the game mechanics. They may not understand what's going on, but they get some fulfillment out of leveling. The thing I think is funniest is that I also know plenty of hardcore gamers that are leveling in these simple games. It works for them too. It worked for me. I got into this routine, where I'd get up and think, "I better push the button to exploit the timer and progress as fast as they allow me to." It's that infrequent but routine use that's interesting, and that's what's powerful about social experiences in terms of their game mechanics. You can build them into the routine of your life in a way you can't with these more hardcore experiences. ISG: You've suggested that there are a lot of similarities between today's social gaming companies and the early days of PC gaming. What are the differences? RB: Connectivity is the big one. A friend of mine developed the early Chuck Yaeger simulators. I was pleased to hand SOG to him, and he was playing it on an iPhone, with equivalent visual quality to what he produced on the PC years ago. There's a bit of a mix of new and old in that. A lot of the ideas were established in the 80s, but they didn't have the ability to achieve the same things. Some of these new games are clearly throwbacks, and some were pieces missing at the time that would have allowed them to do what we're doing now. Downloadable content is a fundamentally different business from releases. It doesn't work in the console space because of retail. Now there are avenues for it on the back-end of retail releases, on the Xbox network or whatever. But that presumes people have a connection and are comfortable spending their money that way. With the iPhone everyone's connected, and the pieces we're selling are so much less expensive and smaller. I honestly think that a lot of the issues people have with downloadable content is a lack of understanding. People are comfortable with the packaged goods model, they're comfortable with subscriptions. These are metaphors they've bought into. The packaged model has led to publishers that build sequels because they don't take chances in the marketplace. The number of new things tried and brought to market is actually very limited. And the fact is, there's a lot less value in a subscription for customers. How many people have a subscription they've forgotten about? ISG: Let's talk about distribution on Facebook, where Farmville has gotten more recognition than anything on the iPhone. Would you put that down to loopholes in Facebook's ways of promoting apps? RB: You could, but that would diminish the social aspects. There's no question that in the right circumstances, you can reach an audience unheard of in any other media. It just demonstrates how many people are really interested in the content. If you provide them something they have access to, there are a lot more people willing to participate than the game market has served over the years. You go to the web browser and find Farmville, and now you have an experience with immediate access, and you discover that it's interesting in a matter of moments. It's that access that changes the relationship with the customer. That's what's unique about this part of the industry -– it's eye-opening to realize how many people have been left out of the industry. If you look at the iPhone where it is now, it will double over the next few years, then you add in [Google] Android. It's not particularly hard to get to markets bigger than Facebook. What if every phone was a web enabled device with the same features as the iPhone? That audience is interested in the same sorts of experiences as they are in Facebook. Those customers tend to buy things with specific value to them. In some ways the market is more dynamic than Facebook. ISG: Where do you see SGN going -- will it become a huge company employing thousands of people? Could it someday look like EA? RB: Part of that depends on the body of products we're producing. I think that we set out to achieve objectives and the size of the organization falls out of that. The products can be developed in or out of house. But the fact is that over time the production quality will go up. What's happened with the traditional game industry is that the cost has exceeded the ability of the audience to support it. The question comes down to how long will it take for the web enabled device market to become too top heavy and constrained by the limitations it has created as it grows. It's a long way off, but my assumption is that it has more overhead because it has the potential to reach a much wider range of people. I aspire to have a reputation like Pixar, where the brand means something so substantial that people recognize it. They can bridge an audience. Plenty of people like harder core content and still like a Pixar film. What I'm speaking to is that there's a perception of quality based on consistency. A strong brand is a method of convincing people that there's value in what we're doing. Producing products that get you that reputation is the first order of business. ISG: You're making free games that offer in-game purchases and micro-transactions. Is that the only revenue stream you're looking at? RB: I don't think paid apps will go away altogether. The charter of this company is free apps with micro-transactions, but I don't think that you can ignore that most of the products sold right now are pay to play. I want to believe that people will realize over time that there's more value to the relationship by buying the product incrementally. But the reality is that if the market doesn't develop a market, the company has to follow them. It may be that paid products are the way to go. ISG: You mentioned that SGN is looking for other developers to work with. What are you interested in from them? RB: I think that our focus is really on social interaction and driving socialization through activity. That can show up in a variety of categories like RPG or lifestyle products that have game elements. It could be an action game, RPG, MMO, a simulation. I'm looking at all of those categories. What's interesting is the social interaction.

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New SGN CEO Randy Breen on Mobile Development and the Future of Social Gaming

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