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Facebook’s Sean Ryan knows games. He has been around gaming and partnerships for some time, holding positions at Sega, Meez and News Corp.
And he needs to know them well. As Facebook’s director of games partnerships, he is charged with making sure third-party developers make Facebook a part of their gaming strategy.
We sat down with Ryan to chat about the state of Facebook’s mobile gaming business — which has been in quite a bit of flux, to say the least — over the past few years, and what the company’s games strategy is for 2014.
Mike Isaac: You’ve been at Facebook for almost exactly three years now. Tell me about your gaming business back then compared to what it is today.
Sean Ryan: I joined a few years after we launched Facebook Platform, and games had been the overwhelming beneficiary of our launch of our third-party platform. So I came to manage the business to drive value for Facebook, for users and for partners.
And depending on which way you look at it, you could say that the “value” to one part or the other was out of whack. Whether it was too much spam, which made users uncomfortable but developers happy, or the opposite — with distribution channels starting to fall away, which made developers unhappy.
And there’s Facebook trying to balance in the middle, trying to find value for us as well.
Sounds tricky.
Yeah. So a lot of what we’ve seen is a shift from all Canvas (the place to build apps that run on Facebook.com) with Zynga as the top performer, to a much more diverse ecosystem on Canvas, with developers that didn’t exist a few years ago — like King (the breakout success studio behind Candy Crush Saga) or a whole bunch of ones in Europe.
Second, we’ve seen diversity of types of gameplay. Three years ago we were incredibly sim-driven — think farming, etc. — and now it’s really a mix of casual (again with Candy Crush), or casino, or “Core” games.
Finally, what you see next is the move to mobile. And that’s been the overwhelming trend of the last year to two years. And trying to look at how we play a role in that value chain. Now we’re trying to help developers build and grow their apps.
So that’s a big change for you guys in terms of what sort of role you play, right?
On mobile, we don’t play any part in the collection of payments — that goes to Apple or Google, just like it would go to us for our on-Canvas games. So where we’ve really focused is on the marketing acquisition front, on how to get users to your game.
And that’s worked out really well for us — there’s a whole set of developers using mobile app-install ads that were never on Canvas.
That’s interesting to me, since it basically represents a shift in your entire gaming monetization strategy.
Absolutely — but just so we’re clear on numbers, as of Q3, we’re still growing Canvas. But clearly the growth on desktop is going to be a slower growth pattern than what we’ll see on mobile.
The thing we’re finding from the data coming in right now is that cross-platform games increase engagement on both mobile and desktop. So if you have a mobile game, and you move it to desktop, engagement goes up on both platforms.
Same thing when you move from Canvas to mobile — overall interaction goes up across the board.
Huh. So are certain types of companies more adept in incorporating that strategy?
There’s a couple ways. It’s easier for certain types of gameplay genres — so, casino and casual tend to be easier. King would be the masters of this. Disney just released a hidden objects game, and it released on all three platforms at once, using Facebook to tie it all together.
That, along with the continuing rise of non-U.S. developers, especially inside of Europe and Asia.
Bingo. Talk more about International, please.
So if you look at my team, for example, it’s now over 50 percent outside the U.S., which is now both in Europe and Asia.
We have a good-sized London-based team, and then we’re in Singapore, Korea and soon to be in Japan.
Because it’s where we’re seeing growth in incredibly talented developers. And as cross-platform becomes the overwhelming play, we need to explain what makes our platform powerful on desktop and mobile.
You go to a country like Korea or Japan, which historically is a mobile-only country, and we need to make sure we’re increasing our investment in those areas. If you look at the App Annie stats around Google Play and mobile and general, China, Japan and Korea are in the top three mobile gaming companies in the world.
Super interesting. To switch gears, I was talking with Benchmark’s Mitch Lasky recently, about messaging apps in particular. Talk to me about distribution and discovery through messaging apps. It seems to be working for these international markets.
Absolutely. From a gaming perspective, you see a break from the two regions. In the East, out in China, Japan, Korea, you see messenger apps that are very noisy, colorful, loud. If you use KakaoTalk, for example, you’d be amazed at the number of notifications coming through. It’s almost like our News Feed four years ago — very, very noisy, but it’s effective.
But if you look at in the West, like Messenger and WhatsApp, they’re more utilitarian. Less about stickers, games, self-expression in that higher-level way that Asian messenger apps usually are.
So look at stickers. The amount of sticker revenue that Line has is significant because it’s based in Japan. Here, stickers are not as relevant, because self-expression is different. (That may change, by the way. I’m just telling you where we are now.)
You see WhatsApp and Facebook Messenger — very straightforward, less about self-expression. WeChat, Line and Kakao, let’s face it, are only really successful in their home countries. And you see a different style of success. Very successful, just different.
So in 2014, we’re all going to look at these messaging services, and look at ways you can communicate and discover — and how does rich media play in that?
In general, we’re going to see whether that Eastern style of discovery mechanics can be successful in the West, or if it’s a cultural divide. It’s not guaranteed that it will be as successful.
Okay, last question, and it’s simple — what’s 2014 going to look like for Facebook and games?
In some ways, more of the same. International growth, spending a lot more time in Asia. I think we’re under-indexed, because historically that’s a mobile-only region, but as we now have a really powerful set of mobile features, we need to grow our presence there.
So Asia, plus Russia. An amazing game developer country, both in terms of skill and scale, and always looking to expand.
Cross-platform, especially the rise of tablet. We’ll start to see tablets become a larger part of the equation, though it’s already quite large — I’m not sure everybody appreciates how large the tablet gaming business is. For many of our developers already, tablet revenue is over half, because the revenue per user is much higher.
There’s what we call the triple-threat — you’re sitting at home watching TV, using Facebook on your phone and playing a game on your tablet.
The numbers for console …
Console! I didn’t even think of that. I remember you all just announced that you’ve got Playstation 4 integration.
Yes. I think people don’t appreciate that every console owner is a high-value owner. Because they’ve just spent $500 to $600 on a next-generation gaming console. And even on the PS3 and Xbox 360, where [Facebook] has some integration, we’ve found that those users, when they connect their gaming accounts to their console accounts, are incredibly committed — these guys are hardcore gamers. And when I say guys, so far they’re all guys.
So as we see that grow, it’s all part of the move for Facebook to have richer media in the feed, per photos and video. To have screen-captures and video exports is driving a lot of value.
At core, it’s still about login, discovery and social graph.
This article originally appeared on Recode.net.
