OPINION: Casual Connects

Sweeping her arm across a vista of crowded booths, Casual Connect director Jessica Tams says, "Just look at the activity here. These companies are doing well. We have more sponsors, more visitors than ever before." Early indications are that attendance is up 15% on last year. This show has gone from 200 people in 2006, to more than ten times that today.

But the casual community isn't talking much about pointless distinctions between itself and 'hardcore'. It has way too much on its plate - distribution and business models are huge discussion points. This is, almost entirely, a business built without retail. Questions abound on the value of subscriptions models, advertising models and pay-per-game models. The big platforms here are not Xbox 360 or even Wii/DS, but iPhone and web. Licenses are extremely important in this business (more so than in hardcore), but, in a fledgling creative community, new IP is also key.

A key difference is that, whomever you're meeting with at Casual Connect, chances are that person is an entrepreneur or a stakeholder in his or her company. Casual Connect is about trestle tables and on-the-spot deals. It's a world that the hardcore industry has long left behind, and not necessarily for the better.

Of course, there are connections still between these two sister industries, the most important being that we both make, ultimately, the same thing. This is perhaps where those who hate the terms 'casual' and hardcore' have a point. These are two different businesses making roughly the same product. At Casual Connect this notion was voiced best by Nintendo's senior director project development Tom Prada in his keynote on game design.

He pointed out that, of all the traditional game makers, it was Nintendo that recognized the potential of the non-gaming audience and reinvented itself to such astounding success. Products like Nintendogs and Wii Fit as well as Guitar Hero show what can happen when games companies step back from doing the same thing over and over again, and think about audience instead of reiterating on their own skill-sets, and attending busily to the pointless and self-defeating denial of change.

For games makers, there's still more audience to come, with much of the growth firmly in the sights of companies creating casual games. "For every two players consuming games, there is another one who isn't." said Prada. "That's an incredible 50% growth opportunity." Prada advised game-makers to observe and analyze human behavior in order to create great game experiences. The person to learn from, he said, was Shigeru Miyamoto.

Observance of established behavior was certainly the route taken by one Casual Connect attendee, Chuck Gamble from Lucky Radish, who has created an iPhone game for kids (Slide-a-ma-jig) that's basically Mix & Match. Gamers put together a huge variety of body parts to create an infinite number of characters. Its simple and its appealing to young children.

"I remembered loving Mix and Match as a kid," he said, "I knew that iPhone would be the perfect platform to make an even better experience for children." It's a game that's growing on iTunes via word of mouth. It costs just 99 cents and offers hours of fun (I recommend this game to anyone with small children).

This is Casual Connect at its grass-roots - a dude from Wisconsin looking to get his game picked up and promoted. At the other end there are extremely large corporations with big ambitions. Oberon, PopCap, RealGames, MochiMedia, SPiL and more, each with their own ambitions and ideas about the future of casual games.

Netherlands-based Spil Games' global revenue grew 125 per cent last year, with traffic up by 75 per cent. The company's model is to create vast portals of free games that also include advergames, placed by agencies. Companies selling stuff like detergents are using these games to get their message across.

CCO Sidney Mock explained, "When a consumer is playing a branded game, they might be spending up to an hour there, exposed to that brand and interacting with it. We have hard metrics to show the effectiveness of this as well as soft branding metrics. Agencies are now understanding the value of creating entertainment around their brands, and feeding that back into community initiatives."

Spil also develops its own games and seeks to monetize users through sales and micro-transactions. How best to monetize casual games - a  business worth an estimated $1 billion - was the point of discussion at the panel Make Money Of Your Games. Companies aren't just pushing their brands through game content, they're buying ads attached to games or on games.

Why? Because they trust games sites more than they trust user-generated content sites and social sites and they like the numbers. This panel savaged old-media models, particularly TV buys dismissed as "fuzzy" in terms of metrics measurement. “There are still some guys who believe games sites are about poker,” said one speaker, to general audience laughter.

But the trend is towards agency acceptance. Mike Vann, vice president of sales and business at Skyworks said, "Big brands that are spending huge budgets realize that they need to be efficient, and they need to see demonstrably effective metrics. They are shifting away from TV and onto online, every single day."

The panel agreed that the only thing slowing this process is aging, increasingly out-of-touch personnel at agencies unwilling to part with established practices, or unable to accept that the world has moved on.

But change is inevitable, and it's fueling the growth of the casual games business. Mike Shehan, founder and CEO of SpotXchange said, "The money is moving in only one direction." His company auctions video-based advertising on games sites, with, he said, theatricals increasingly keen on online because movies studios wants their ads to be seen by targeted audiences and "nothing targets as effectively as online games". Portals are becoming ever more effective at knowing who is playing their games, and what sorts of products they like.

Dave Madden, evp of WildTangent pointed out that, in a severe advertising depression, advertising on games sites is increasing.

But it would be a mistake to simply view casual gaming as an advertising platforms. Games like PopCap's Plants vs Zombies or I-Play's Bubble Town are huge hits in their own rights. I-Play's vp of marketing Mike Breslin said, "The difference between this business and traditional games is that this is truly mass-market. It's a much broader opportunity. The hardcore games business has painted itself into a corner, while this industry is about opening up new doors."

In the casual space, companies are free to experiment. Huge bets aren't being placed on single products. Partnerships are made with external entertainment companies that are viewed by licensors not merely as revenue generators bit as promotional vehicles. I-Play’s Fast & Furious game includes a contest to post fastest level videos on YouTube. This is the sort of thing that excites Hollywood right now.

Casual is also in a perfect position to capitalize on the next big thing - connected gaming. "It's a big challenge as a business and as an entertainment platform, but companies like ours have proven success on the platform of choice for most consumers, which is the cell-phone," he says.

Casual Connect isn't just about consumer-facing companies. A plethora of service companies also exhibit, including casual engine-maker Unity. Its platform straddles all ends of the business. EA has bought licenses for development of Tiger Woods Online, attracted by the relatively low-price and the Unity's 3D capabilities. But the firm is also selling $200 licenses to students and $600 licenses to individual developers of iPhone games. At a time when everyone is looking for that big iPhone hit, this really sounds like a case of selling picks and shovels to gold-miners.

Unity's head of marketing Tom Higgins says, "People call the iPhone games market a gold rush, but it isn't accurate any more. The days when people made money from red-button games that made fart noises are over. People are looking for innovation and quality now, and there is a lot of competition. Good developers, using good tools, are going to come to the fore."

It's certainly true that the casual business is made up of different individuals and different models than the traditional business, but the two businesses share many of the same concerns - creating innovative experiences at relevant costs, acquiring new users and finding smart ways to monetize their businesses through online channels. For now though, it's the differences rather than the similarities, that mark Casual Connect out as proof that there is more than one industry working the games business.