One game company’s plan to push retail through Facebook

Venture Beat — Fri, 21 Mar 2008 15:17:07 -0700

It’s a great platform for hosting casual games, but it’s a bitch to monetize: The problem with Facebook is that it’s just too new to be certain how to create a great business on top of it. Zynga and SGN want to create their own ad networks on Facebook, but a more established company I recently spoke with has a different idea.

Threewave Software is a development studio that has worked on mainstream blockbusters like Doom III, Return to Castle Wolfenstein and Turok. In 2005, it bought a small startup called Gnosis Games and began to fund the development of some smaller, casual games, which were then sold through retail channels.

Unlike the one-off casual games you’ll generally find on the internet, what Gnosis makes are themes packages like Candie’s Factory, which is billed as an action / puzzle game. The plan is to split off individual mini-games and place them on Facebook to gain brand recognition for the retail product.

“We’re trying to build up an audience on Facebook where you can develop the brand association, so when you see that same brand at retail, you’re already familiar with it,” says Threewave’s CEO, Dan Irish. “I think for this year, the retail proposition is still the most important.”

It’s easiest to think of like an appetizer or hors’doeuvres — having had a taste they enjoy, players may well want to pay for a full meal. When I asked Irish why other publishers aren’t doing the same thing, he said it’s because they don’t have the background to sell full retail games.

Threewave’s ideas do seem to be in line with the plans of Electronic Arts, which has a stealth division called Blueprint that is reportedly creating “brand extensions” for its games to be distributed on social networks.

In a broad sense, both companies are planning on using Facebook as a marketing platform for their properties — which is actually somewhat similar to what Zynga does when it’s cross-promoting its own games through advertisements on its network.

However, for Threewave, the proposition extends to testing out new concepts. While Candie’s Factory already exists, Gnosis will use Facebook as a place to vet games before it spends the time and money necessary to turn them into full games and sell them. Once the games are being sold, they’ll remain connected; scores achieved on the game will be reported back to Facebook, and vice versa.

Irish admits that he thinks the importance of retail sales will wane over the next five years, bringing advertising and micro-transactions within games to prominence; Threewave will also test out those models while it’s pushing its games. At the same time, he’s looking out for a coming rollup of small developers. Soon, he says, “the top ten percent of developers will command 90 percent of the revenues.”

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One game company’s plan to push retail through Facebook