Berlin-based Wooga made a big splash in social games with casual hits like Bubble Island, Monster World, and Diamond Dash. But making the switch from Facebook games to mobile wasn’t easy for the 5-year-old company. It had a false start with a game in the HTML5 format, the lingua franca of the web, and shifted gears.
But Jens Begemann, the chief executive of Wooga, kept at it. Last fall, the company launched Jelly Splash, which became a monster hit, as did Pearl’s Peril. Now 70 percent of the company’s revenues come from mobile, and revenues are double what they were a year ago. With a refined process for making games, Begemann believes the company can keep growing with about two hits a year.
We sat down with Begemann for an interview at the Game Developers Conference in San Francisco this week. Here is an edited transcript of our talk.
GamesBeat: Last time we talked, Jelly Splash was doing well. What’s your update on how things have gone so far?
Jens Begemann: Jelly Splash continues to do very well. We have since also launched on Android. We’re happy that it’s stayed high in the charts for so long. As a result of that, our revenues as a company are now twice as high as they were a year ago. We’re happy with our growth. We’re expanding and growing.
GamesBeat: Do you credit that mostly to the one game?
Begemann: For us, the key is how we can repeatedly create hits. In this industry, in mobile, which is very hit-driven, it’s about how you can have multiple hits. Our goal is to have two hits a year. We had two last year, which were Pearl’s Peril and Jelly Splash. Jelly Splash got more media attention, but both were very successful.
What we’ve done over the last year is completely change the way we create games. This is how we show it visually. We call it the hit filter. We develop about 40 prototypes a year. Out of those, we stop most of them. Only about 10 games go into production. Some of them soft launch. We expect only three full launches out of those 40 prototypes. But because of always filtering along the way, questioning every project every few months, we believe we can filter out the hits and thereby have two hits like we did last year.
GamesBeat: Where does the internal filtering give way to the user testing? At what point do you introduce the game to users?
Begemann: There are three stages. In the early stage, when it’s about concepts, we’re internally discussing it. When it comes to a prototype, we already do internal user tests. We get people from outside and give them the prototype and let them play it. We see what they do. In addition, we also have everyone at Wooga playing these prototypes.
As soon as you go to soft launch – that’s when you launch it in one market – then you go and watch the numbers, and the decisions are based entirely on the numbers from consumers.
GamesBeat: At what point would you say you are most drastically changing the ideas behind your games?
Begemann: We try to do more of that in the early stages. The later you make drastic changes, the more costly it is. With Pearl’s Peril, four or five months before launch we made some really drastic changes. That was very painful. But we try to sort out the core of the game in the concept phase. That’s where we focus on it.
This is a major change to the way we create games. In the past – and I think this is how most companies do it – you do a prototype, and if it looks good, you go all the way forward to launch. Here we have this filter where every few months, we question every project. If we think a game doesn’t have the potential to become a hit, we don’t continue working on it. It’s a big change, but it’s also a big reason why we’ve been able to continuously grow over the last five years. I believe we can have two more hits this year, out of the games we have in development.
GamesBeat: And these hits can sustain how large a company now?
Begemann: We’re a bit over 250 people. We’ve been profitable since more than two years ago. To us, a hit is a game that does tens of millions of dollars in revenue. Even if we didn’t have a hit, we could sustain the company, but obviously we want to grow. If you want to grow revenues a lot every year, grow by 50 to 100 percent a year as a company, it helps to have two hits a year.
GamesBeat: What are you satisfied with now? As far as monetization goes, are you happy with the way the industry does it right now?
Begemann: A number of games out there do free-to-play well, but there also games out there that don’t. The games that do it well are those that can keep users in the game for years, and where people can play the game for free for years. Then a small percentage of people spends money and that’s what propels the revenue forward. That much is all in development.
Because we believe that this process works, and that our system can create hits, we’re also expanding our work on new games. One thing we’ll announce here at GDC is that we will open up another internal studio in Berlin. We’ll still be in Berlin, and it’ll be part of our office, but it will be a separate studio. We’re looking for a head of studio, so we’re also here this week for recruiting, to talk to potential candidates.
What we’re focusing on with the new games we create is designing them for mobile from the ground up. We ask ourselves, if you don’t have the restrictions of a mouse or a keyboard, and you think about the touch screen first, what kind of games can you do that are based on touch, on gestures? How can you do new kinds of games that haven’t been done in the past? Nearly every game designer still thinks about the mouse first.
Begemann: Maybe some companies do, but I talk to a lot of people and show them this chart, this hit filter. I’ve shown it to the founders of other companies. I think most don’t do it that systematically. For us, roughly every three months, we sit together and question every project. We ask ourselves if we should continue working on this, yes or no? Very few companies do it this way. We’re a bit unique, I think.
GamesBeat: You could be releasing 250 Flappy Birds a year, right? How do you figure out how large your teams should be?
Begemann: It’s good for the App Store that you have these breakout hits, where a single person can create something that gets really big. It shows that the playing field is still level. But you can’t predict it.
What we see is that early in this stage, where you work on the prototypes, typically teams are around three people. You have a game designer, and engineer, and probably a third person. Sometimes they get bigger, but not much. That’s a size – two to five people – where you can spin out lots of ideas and change lots of things. You can go through a lot of prototypes within a couple of months.
Once the prototype is set and we say, “Okay, this is a game we want to produce,” we move to production, and those two to five people become seven to 10. That’s how big the team stays, typically, until soft launch. In some exceptional cases they get bigger, but usually they’re about that size.
GamesBeat: How do you deal with the risk that a game might not monetize? It could be popular, but it might not make money.
Begemann: We’ve understood free-to-play relatively well. The first key to free-to-play is keeping people in the game for a very long time – a year or more. Then, if you’re able to get people to play your game every day for a year, because you designed it in such a way that they can have fun playing for free, usually it’s clear what kind of additional monetization options you have to offer, so that people can also spend money.
Our focus is more on retention than monetization. Obviously monetization is also relevant. You have to do it to have a business. But the focus is more on retention and then monetization in the long term.
The third thing we’re doing at the moment is looking at Asia. We’re hiring, or in the process of looking for countrymen, for Japan. We believe Japan is an extremely attractive market. We see that our games get very positive feedback there. Jelly Splash has high ratings in the Japanese App Store. But we believe that to be successful there with future games, we need a person on the ground in Tokyo. We’re actively looking into that.
GamesBeat: And someday perhaps some kind of studio there as well?
Begemann: We don’t plan to do game development. It’s more about business development, partnerships, and marketing. That’ll be the focus for our person in Japan. The games we create, we aim to make them for as international an audience as possible.
I’m German, and we’re based in Germany, but most of our employees are not. More than half of our employees are from other countries. Every team, because they’re so international, such a mix of cultures, they don’t do games that just work for one culture. They do games that work pretty broadly, across many cultures.
GamesBeat: I’m curious as to whether there’s any particular middlemen in the industry that are useful to you, external partners of any kind — analytics companies or mobile-marketing companies, advertising networks.
Begemann: In terms of marketing and advertising, we work together with many partners. The most successful games spread by word of mouth, obviously, but you need to do marketing to fuel that growth and spur it on. We work together with maybe 15 mobile advertising networks, running ads there.
As far as analytics and understanding our users, we have developed a lot of tools internally. We believe that helps us to grow well, to have those tools in-house.
GamesBeat: Are you satisfied on that front, or do you think there are still some things that need to progress in that area? I hear it’s hard to tell which advertising networks are doing the best for you unless you get even more analytics involved to figure that out.
Begemann: We invest a lot into these internal tools. We have a number of engineers working internally on our analytics and marketing systems, to understand where we’re getting high-quality users from and where we’re not. If you’re an independent developer, or a smaller developer, it’s definitely important to track what you’re getting and see which tool providers can help you.
For us, because we started on Facebook and now we’re going to mobile, we have a few years of experience and also a few years of internal tool development. It’s always a challenge, but overall I’m happy about it.
GamesBeat: Are you excited about anything in particular as far as future developments?
Begemann: The transition to mobile has, I would say, been successful. Two years ago we had our first revenues on mobile. Now that’s 70 percent of our revenue. That shift took place while we were growing our revenue overall. I would say that’s successful. iOS and Android are the key platforms we’re developing for.
What I’m excited about is, in terms of genres, we’re going pretty broad. Last year we did a puzzle game and a hidden object game. Before that, we had Diamond Dash, which was a very fast-paced match three, and Monster World, a farming game. So we’re going broad in terms of genres. Although I talk about repeatedly creating hits, it’s not just about applying the same formula again and again. It’s about creating new franchises and making successful new titles in new genres.
I’m excited about the games we have in development. Most of them will probably launch in the second half of this year. We’re entering new genres where we haven’t gone before, including mid-core.
Beyond that, what we’re actively following are the new smart devices. I’m curious to see if smart watches will be successful. If they are, will they be a platform for games? What other types of wearable computing will be out there? That’s something we look at very actively. Right now, I don’t see a particular device that’s worth developing for. They’re all pretty small in terms of installed base. But we all know how fast that can change.
If one of those devices pulls ahead, we’d probably do a game jam. Every few months we do internal game jams, where people have three days to create new titles. That’s always a lot of fun, taking 72 hours to create a new game from scratch. We’ll try that once one of these new devices gets enough adoption, just to see what’s possible.