Nobody talks about games as lucidly as Will Wright, the creator of blockbuster franchises from SimCity to The Sims. He discussed the future of games at the Game Horizon Live event in a live webcast this week. During his Q&A session, he talked about a wide variety of topics about where games are going.

Wright said that he was inspired by the “Cambrian” explosion of games (as in the meteoric growth of life during that epoch in Earth’s history) that has come from indie game development on app stores for smartphones, tablets and other platforms.

Wright cofounded Maxis and created games like SimCity. EA acquired Maxis in 1997, and Wright went on to create titles like The Sims and Spore while at EA. He left Electronic Arts in 2009 and set up a series of startups. His latest company is Syntertainment, which focuses on creative play and the interaction between entertainment and reality.

Wright has won multiple awards and was inducted into the Academy of Interactive Arts and Sciences’ Hall of Fame. For young game designers getting started, Wright advised them to study nongaming fields so they can get more creative inspiration. Here’s an edited transcript of a portion of the Q&A with Wright at Game Horizon 2013. This is part one of the Q&A and we’ll run part two on Sunday.

Will Wright: Really, you’re dealing with two platforms. You’re dealing with the computing platform, which is code and technology and all that stuff, and you’re dealing with the human mind. When you design a game, it’s running on both of these platforms at once. A lot of the things that we can crunch numbers on in a simulation, we do that on the computer. But a lot of other things that the computer is not well-suited for, we actually run that in the player’s imagination.

For example, in The Sims, when you hear the people talk, you don’t actually hear them saying anything. You hear this kind of gibberish language. Through a lot of experiments, we determined that we could actually have them speaking in English or some other known language, but they very quickly became robotic and repetitive. That veil of reality disappears. On the other hand, if they speak gibberish, your mind naturally fills in the blanks and imagines a conversation. The Sims have vocal intonation. They have emotion. You can tell if they’re angry or flirting or whatever it is. We don’t hear the exact words, is all. In essence, what we did is we offloaded that part of the simulation into the human imagination.

When I started out in my career many decades ago, it was all about how fast the computer can run. How many pixels can we put on the screen? We were always fighting the machine at every turn to get more performance out of it, to do more tricks. Those limitations, for the most part, have just fallen by the wayside. I don’t feel like I have any meaningful technological bottlenecks or barriers ahead of me. At this point, it’s about how we best exploit the human imagination, the human mind, human creativity, in interesting ways. We’re trying to get somebody’s brain into a certain state that they enjoy. Sometimes it’s a kind of flow state. You’re at this border between challenge, accomplishment, and difficulty. Other times it’s more of a free-form, creative, expressive state, or something where you want to share, more of a social state.

Obviously, we don’t understand very much about the human mind. Game design, in some sense, is applied psychology. We’re hacking human psychology. We’re dealing with these mechanisms in our brains that give us joy, enjoyment. Sometimes it’s through challenge, or through finding patterns, or through solving problems. Our brain is wired to enjoy these things, which fundamentally is the process of learning. Our brain is wired to reward us for learning and pushing our limits and doing things outside of our barriers. Game design is in some ways a process of getting us into that state of expanding our mind.

I can sit there and look at the specs of a computer and understand all the stuff that it can and can’t do. The human mind, though, we have no manual for. That’s uncharted territory. As game designers, this is one of the fundamental ways in which we’re exploring the human mind.

Game Horizon: Which game designers in the world do you most admire? Current or historical?

Wright: That’s a good question. Obviously, [Shigeru] Miyamoto and Nintendo. What I admire most about him is that he always takes the player first. Right off the bat, giving someone the controller – what does it feel like? How tactile and kinesthetic is what he’s working on? It works from the inside out. What’s the first 5 seconds of the player experience? What’s in the next 10 seconds? His games have this craftsmanship around them that’s amazing and unique. Plus, the variety of things he’s done. So I very much admire him.

Also, Peter Molyneux. I think he takes a lot of risks. He’s got this vicarious thing about dealing with little worlds full of little people, which very much matches my sensibilities in a way. Sid Meier, I’ve always enjoyed his games. His games are just playable. They’re like a comfortable chair you sit in. I grew up playing board games and war games and stuff. Sid did as well, so I think Sid in some ways is re-creating our youth, the kinds of games we would play back then. There are lots more. It’s hard to pick them out.

All three of these are from my generation of game designers. There are a lot of other people, up-and-coming people, doing weird, cool, experimental stuff right now. I feel like we have a much wider crop of very skilled, talented designers now than we ever have, which is great for the industry. Partially it’s the result of having all these different platforms. You don’t need the 100-person team. A really smart kid can go out there with a couple of his friends and put an app out on the App Store inside of a year. Some of the greatest designers out there are just getting their start right now.

GH: What were the biggest influences for the kind of games that you’ve created – the simulations you’ve built that are more than just mechanical, that simulate life in a way?

Wright: A lot of my influences for my games come from reading, from books. Specific themes and subjects usually are very targeted, coming from academic stuff. I was very inspired initially by Jay Forrester, who was the father of modern system dynamics theory back in the ‘50s. I was reading about how he was trying to take different systems – cities, factories, the whole world – and simulate them. He wanted to deconstruct them into component parts that he could build a model of.

As a kid I spent most of childhood building models – planes, ships, plastic and wood. I started putting in motors and building tanks and stuff like that, which led me to the idea of robots. I bought my first computer to control my early robots. Doing robotics, I started realizing that most of the really hard problems in robotics and AI were software problems.

At the same time, I got very interested in not just modeling the world with static, physical models, but also how to model the world dynamically. Modeling the internal dynamics of the world and the way things work. I’d say that Jay Forrester was a big inspiration down the simulation path. Another inspiration was a Polish writer named Stanislaw Lem, who wrote a lot about micro-worlds, simulating worlds, and the ethics of dealing with these things. A lot of philosophical questions that these little worlds bring up. For the different games I’ve done, for almost every game there’s some major inspiration. Edward Wilson’s work with ants inspired SimAnt. Christopher Alexander’s work on architecture inspired The Sims. So I get most of my inspiration from reading.

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Will Wright, the creator of blockbuster franchises from SimCity to The Sims, discussed the future of games at the GameHorizon Live event in a live webcast today. During his Q&A session, he said that the next-generation game consoles can become the “connective tissue” between games and other kinds of entertainment, such as video or music.

Wright said that he was inspired by the “Cambrian” explosion of games (as in the meteoric growth of life during that epoch in Earth’s history) that has come from indie game development on app stores for smartphones, tablets and other platforms.

Google Glass excites him because it will be “a whole new thing to explore.” He said new kinds of input — multitouch gesture, mouse, and keyboard — will run into the problem of how to get into the “psychology of the player.” Certain kinds of input will become homes for genres within gaming, but he said, “I don’t see any one-size-fits-all.”

As for virtual reality (such as the Oculus Rift headset), he said he likes it and augmented reality. But he added, “There is the issue of how long I can wear it without getting sick.”

Wright cofounded Maxis and created games like SimCity. EA acquired Maxis in 1997, and Wright went on to create titles like The Sims and Spore while at EA. He left Electronic Arts in 2009 and set up a series of startups. His latest company is Syntertainment, which focuses on creative play and the interaction between entertainment and reality.

Wright has won multiple awards and was inducted into the Academy of Interactive Arts and Sciences’ Hall of Fame, and in 2007 he became the first game designer to receive a BAFTA award. For young game designers getting started, Wright advised them to study nongaming fields so they can get more creative inspiration. He was inspired in the past by the novels of sci-fi writer Stanislaw Lem.

Wright said he hopes to incorporate real world feedback from players and knowledge about their situation — such as location or tastes — in designing games.

“I’m very interested in how we build a game around a player’s life,” he said. “I want to figure out how to bring games back into everyday reality, games that intersect with players’ lives.”

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Victor Kislyi’s plan is to dominate the world of gaming with free-to-play titles. The chief executive of Wargaming.net says his company has more than 55 million registered players for its World of Tanks online tank combat game, and it is setting new records for the numbers of concurrent users in its game. That’s enough to get the Cyprus-based company a lot of attention in the West, as the executives at traditional game companies are trying to figure out how to compete with Wargaming.

Now the company is launching World of Tanks: Blitz, a mobile version of its popular online multiplayer tank game. Kislyi showed the title off at the recent Game Developers Conference in San Francisco. In an interview at the GDC, he acknowledged that the company still had to perfect the controls of the touchscreen game for tablets and smartphones.

But Kislyi is used to taking his time. His company is 15 years old, but it only began its shift to free-to-play games in 2008. With the October 2010 launch of World of Tanks, the company started blasting its way into the ranks of the most profitable online game companies. The company built its audience in Eastern Europe and went worldwide in 2011. Now it is moving into mobile and developing World of Warplanes and World of Warships. And it has expanded to more than 1,500 people, or roughly half the size of Zynga.

Wargaming also bought Day 1 Studios to get into console games and Chris Taylor’s Gas Powered Games to launch a new intellectual property.

Here’s an edited transcript of our interview with Kislyi.

GamesBeat: It’s a little hard to control your mobile game. I’m going to have to master that.

Victor Kislyi: Well, we all have to face the fact that there’s a generation of people that have never used computers for everything. They’ve used a digital device to do their homework, do their jobs, watch movies, send e-mails, use Facebook. They got used to this. They play shooting games with it. I’ll never trade away a mouse, myself, unless I’m in a taxi or waiting at the airport or something. Some people will only play it that way. You just have to try.

GamesBeat: It sounds like you’ve spent a lot of time trying to get the controls right. Is that very difficult?

Kislyi: This is our first playable. We’re going to improve them a bit more. There’s going to be the whole cycle of focus-testing and changes. Believe it or not, I can’t play this with a console controller. I just don’t know how to do it, but some people are great at shooting games with them. It’s just a matter of how accustomed you become.

GamesBeat: Was there a time when you thought mobile was not a good market to go into? Did that change very quickly, or change because of how the industry has changed?

Kislyi: A lot will depend on the initiative. Look at Clash of Clans or Angry Birds. There was no Clash of Clans before. Boom, out of nowhere, the installed base is huge. It’s not going to be coming down any time soon. There will be more devices like this, more powerful, brighter screens, better computing power, everything.

GamesBeat: So they’re moving the technology of mobile into your territory of AAA online games.

Kislyi: Yeah. That’s good for us. What we do is about gameplay experiences. The monetization is part of that blend of experience. What kind of metal and plastic device is involved doesn’t really matter, philosophically. Yes, we’re PC-only right now, but maybe five years from now there will be only one gaming device, something the size of your voice recorder here, and it plays all your movies and your games via Bluetooth to a huge plasma screen. What will be left to us? The experience. The visuals. The way the story unfolds. Why you fight and how you’re fighting.

Mobile games are becoming more complex and more sophisticated. Take Kabam for an example. They’re mid-core now.

GamesBeat: How would you classify this? Is this a mid-core title, a hardcore title? Would you spend five minutes in this kind of game, as opposed to hours in the PC games?

Kislyi: This is the first game of this kind, a massively multiplayer, graphically intensive, historically accurate World of Tanks-style game. It has long-tail progression. It’s not about making a couple of clicks per day and waiting for a cooldown. There’s no cooldown here. We’re taking a risk with this. It’s experimental. There’s no proven formula for making World of Tanks on the iPad. Somebody has to do that, and that’s us. There will be lots of tests and further experimentation and prototyping — hopefully not too much — and we’ll see. At this point, we can’t predict the result. It’s just about making it and testing it.

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Wargaming is continuing its mission of free-to-play domination.

Today, the developer announced World of Tanks: Blitz, a mobile version of its popular online multiplayer tank game. Wargaming built Blitz to work on tablets and smartphones.

“With World of Tanks: Blitz, we’re doing our best to give players a gaming experience that would rival anything they could find on a console,” Wargaming chief executive officer Victor Kislyi said in a statement. “We’ve always been committed to bringing World of Tanks to new platforms, and we’re excited to give players a chance to experience the game in a whole new way.”

Like the PC version, World of Tanks: Blitz features fighting vehicles from the U.S.A., U.S.S.R., and Germany. Gamers can upgrade and buy new tanks with in-game currency that they earn in the 7-on-7 battles or using real money and in-app purchases.

Wargaming didn’t set a release date, but we contacted the company and will update this post with any new information.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Americans love cars, Germans love David Hasselhoff, and Russians love World of Tanks.

Developer Wargaming.net revealed today that its multiplayer vehicular battling game World of Tanks set a new Guinness World Record for the most players simultaneously connected to one server. On January 21, 190,541 players logged on to a single Russian World of Tanks server. This bests World of Tanks’ previous record of 91,311 players set back in January 2011.

“It’s an important and exciting milestone for the company,” Wargaming vice president Andrei Yarantsau said in a statement. “It inspires us to greater efforts in polishing and refining all aspects of our present and future projects. If World of Tanks keeps growing at the rate it is, the game will soon top the current total and secure another world record.”

Wargaming’s World War II tank title is free-to-play. The developer is also developing World of Warplanes and World of Warships, which bring the massive online battles to WWII aerial and naval combat later this year.

World of Tanks has more than 50 million registered players worldwide. It’s peak concurrent users once topped 815,000 players in Russia alone.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Troubled developer Gas Powered Games has a new home.

Wargaming, the developer responsible for massively multiplayer games like World of Tanks, acquired Supreme Commander 2 studio Gas Powered Games today, according to an official announcement from Wargaming.net.

Gas Powered Games’ chief executive Chris Taylor and several other of the studio’s developers will make the transition to Wargaming.

Gas Powered is coming off a failed Kickstarter to fund a new game called Wildman.

“Gas Powered Games’ heritage and development pedigree shows us just how valuable an addition Chris and his company will make to the Wargaming family,” Wargaming CEO Victor Kislyi said in a statement. “Gas Powered Games has a long track record of providing incredibly engaging triple-A gaming experiences, and we can’t wait to start working with them.”

Just days into the Wildman Kickstarter, Gas Powered Games chief Chris Taylor announced massive layoffs at the studio, which turned the crowdfunding campaign into a gambit to save the company.

“Wargaming’s growth in recent years has been tremendous, and we’re looking forward to joining one of the fastest growing gaming companies in the world,” said Taylor. “I’m sure our experience and expertise will help us contribute even more to Wargaming’s global success.”

Wargaming is one of the largest free-to-play developers. It’s stable of military MMOs include the aforementioned — and incredibly popular — World of Tanks as well as World of Warplanes and World of Warships.

This is Wargaming’s second acquisition in two weeks. The developer spent $20 million to purchase F.E.A.R. 3 developer Day 1 Studios in late January.

Gas Powered Games’ most recent release was the free-to-play strategy game Age of Empires Online, a real-time strategy title where players control empires throughout their history. The studio is best known for creating the Dungeon Siege series of role-playing games and the real-time strategy Supreme Commander series.

Wildman, Gas Powered’s Kickstarter project, is an action role-playing game (like Dungeon Siege) with real-time strategy elements (slightly similar to Nintendo’s Pikmin games). The developer hit the crowdfunding site with a mammoth $1.1 million goal but only raised $500,000 before shutting down the campaign with four days left.

We reached out to Taylor to ask what will happen to Wildman. We will update this story as we learn more information.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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The online game publisher Wargaming has had a smashing success with its World of Tanks game. Now it will try its hand at console game development with the acquisition of Day 1 Studios in Chicago for $20 million.

It’s a case of an upstart swallowing a traditional game studio, as Day 1 has made titles such as MechAssault, Fracture, and F.E.A.R. 3. While many companies have been moving into the new world of digital games, this deal shows that it’s possible for the digital upstarts to reverse that flow and take over the console business. Against the backdrop of the bankruptcy of THQ (a big traditional game company), the rise of Wargaming and its World of Tanks game should be a warning to game companies that are accepting the status quo. Just a few years ago, Wargaming could have been dismissed as a single-game online company. Now it is the guppy that is eating the sharks.

Day 1 will focus on an unannounced console title, setting in motion Wargaming’s expansion into multiplatform game development. Wargaming previously acquired Australia’s Big World to acquire game development tools and server middleware. It has been able to do these deals because of the enormous success of its free-to-play online game World of Tanks, which closed in 2012 with 45 million players, up 27 million from a year earlier.

“The move into console game development is a huge step for Wargaming as we begin to expand our presence into new platforms,” said Victor Kislyi, the chief executive of Wargaming, based in Nicosia, Cyprus. “We are looking forward to sharing the fruits of our labor soon.”

The company will hire new staff to beef up the Day 1 team.

“Wargaming is a clear leader in the free-to-play space and helps set the standard on which all other games in the genre strive for,” said Denny Thorley, the new head of its Chicago-based studio. “Our team is extremely excited to start the first console project for Wargaming.”

While the rest of the traditional retail business is suffering, hardcore online games like World of Tanks are stealing all of the fans. Market researcher Superdata Research says in its own analysis that World of Tanks has twice the average revenue per monthly active user for an online game.

World of Tanks is gaining popularity in part for its participation in e-sports tournaments. It was included in the finals of the World Cyber Games 2012 in China. Wargaming is also exploiting the franchise further by coming out with a series of books about the history of armored vehicles. The first World of Tanks branded book is about the military engineering program that the Germans had before World War II.

In 2013, Wargaming says that World of Tanks is going to conquer new territory with a collectible card online strategy game called World of Tanks Generals, which release this year as a browser and desktop-based title. The company is also working on two large-scale massively multiplayer online games, World of Warplanes and World of Warships. The closed beta test for World of Warplanes, an air combat game, has had more than 1.5 million applications. Wargaming plans to tie all the games together into a single economy, so users can sign into them via a single account. The company also has its own MMO game platform service, which is open to other developers to use.

Before the acquisition, Wargaming had more than 1,300 employees in 11 offices on four continents. To date, Wargaming has released 15 titles since it was founded in 1998, but World of Tanks is clearly its mega hit.

Superdata says that the average revenue per monthly active user for World of Tanks is $7.58, compared with $2.52 for Nexon’s MapleStory and $1.44 for Neowiz’s CrossFire game.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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The Chinese are coming! The World of Tanks online multiplayer game is going to get a little more dangerous today with the introduction of Chinese tanks. That’s a long-awaited update for a game that closed 2012 with more than 45 million registered players. Built by Wargaming.net, World of Tanks is a huge success among free-to-play online games, with twice the average revenue per monthly active user compared to other online games.

This update will allow players to use 17 new steel beasts from the Chinese People’s Liberation Army from the mid-twentieth century. The tanks include modifications of classical models as well as original combat models based on modern technology but never produced in the real world. The tanks include the Japanese-made Type 97 Chi-Ha, a fast but medium-sized tank. Players can unlock new tanks and upgrades, all the way up to the 111 4/5 heavy tank, the T-34-2 medium tank, and 121 medium tank. (The Chinese aren’t so great at naming their armored fighting vehicles.)

Online gaming is so popular in China that adding Chinese tanks is a brilliant stroke. But it would be smarter to add more Chinese maps as well. The title is already a global game.

I gave the tanks a spin in a preview event yesterday. The tanks have decent armor, good mobility and accurate guns. Our battles consisted of a few games of three on three, but you can play with as many as 15 tanks on a side. Overall, the entire arsenal of tanks includes 230 armored vehicles from the U.S., German, the Soviet Union, France, Great Britain, and China.

We played a couple of rounds on the Himmelsdorf map at the right. It was a little odd seeing Chinese tanks rolling through a European town, but it’s just a game. In this match, there was no respawning. If you lost a tank, you were out and had to watch. We had to either eliminate the enemy tanks or hold a flag for a period of time.

The action is fast. You start playing within 30 seconds of joining the match. At first, you don’t know where the enemy is. You can speed toward the flag, but you might get ambushed doing so. The key is to keep your heavily armored front to the enemy at all times, while trying to get to the enemy’s lightly armored backside. The action happens fast as soon as you make contact.

Generally, the other tankers peek around a corner, fire a shot, and then hide behind a building while reloading. You can fire while moving, but you are less accurate that way. If you stay still, you can be more accurate, but you’re an easier target. The matches wind up being like chess games as you maneuver around buildings and try to sneak up on your enemy. In my first round, I got one shot into an enemy, penetrating the hull. But then I got taken out in a cross-fire between two tanks. In the next game, I fired more accurately and took out one tank. But the experienced gamers I was playing against were consistently better at shooting accurately with the mouse. When you hit an enemy, the shell can bounce off the armor or penetrate. Each time you penetrate, you damage your rival by a certain percentage. It takes a few shots to reduce a tank to a flaming hulk.

Caleb Fox, one of the pro gamers who plays World of Tanks for real money prizes, was on hand at my demo. He said that he likes to roll his tank out to shoot and then back up and hide behind cover. He times it so that he can roll out while the other tank is loading a shell. He counts the reload time and fires his shot just in time before the enemy is fully reloaded. That’s the way to stay one step ahead of the competition.

Wargaming was founded in 1998 and has shipped more than 15 titles to date. But the PC-based World of Tanks, which added 27 million registered users last year, is its runaway hit. The company is making World of Warplanes and World of Warships.

Check out the preview video below.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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The London-based online game publisher Wargaming has grown up in a hurry. You may not have heard of company’s hit title World of Tanks, but the game’s worldwide popularity has experienced a huge boost with its biggest initial audience in Russia, where war games are practically a national pastime. Wargaming closed 2012 with more than 45 million registered players for World of Tanks, up 27 million from just 18 million a year ago.

That’s a stunning growth rate for the free-to-play game, which is printing money through the sale of virtual goods. While the rest of the traditional retail video game business is suffering, hardcore online games like World of Tanks are stealing all of the fans. Market researcher Superdata Research says in its own analysis that World of Tanks has twice the average revenue per monthly active user for an online game.

“The rapid growth of the company in 2012 has greatly contributed to the success of our flagship project, World of Tanks,” said Andrey Yarantsev, director of operating projects of Wargaming. “The victorious march of World of Tanks around the world demonstrates the great potential and opportunities” for Wargaming.

The game set a record of 617,000 concurrent players, or the number playing online at the same time. During the year, Wargaming updated the game eight times, adding 230 different models of tanks. It also upgraded the physics and graphics of the 3D tank battle simulation.

World of Tanks is gaining popularity in part for its participation in eSport tournaments. The game was included in the finals of the World Cyber Games 2012 in China. Wargaming is also exploiting the franchise further by coming out with a series of books about the history of armored vehicles. The first World of Tanks branded book is about the military engineering program that the Germans had before World War II.

In 2013, Wargaming says that World of Tanks is going to conquer new territory with a collectible card online strategy game called World of Tanks Generals, which will be released in 2013 as a browser and desktop-based game. The company is also working on two large-scale massively multiplayer online games, World of Warplanes and World of Warships. The closed beta test for World of Airplanes, an air combat game, has had more than 1.5 million applications. Wargaming plans to tie all the games together into a single game economy, so users can sign into them via a single account. The company also has its own MMO game platform service, which is open to other developers to use.

The company now has more than 1,300 employees in 11 offices on four continents. During the year, it opened offices in Korea, Singapore, and Australia. To date, Wargaming has released 15 games since it was founded in 1998, but World of Tanks is clearly its mega hit.

Superdata says that the average revenue per monthly active user for World of Tanks is $7.58, compared with $2.52 for Nexon’s MapleStory and $1.44 for Neowiz’s CrossFire game.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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It’s already clear that free-to-play games are having a profound impact on the industry landscape. Their initial success is in large part driven by the frictionless reach being free enables. By removing the need to pay up front, a game can reach an audience that’s as much as 10 to 25 times larger. Anyone who owns a smart mobile device or a PC with an Internet connection is now a prospective player.

But to catapult the growth for free-to-play games to truly massive audiences, a subtle – and perhaps counter-intuitive – design philosophy is required: Your game’s free players are actually more valuable than its biggest spenders. It is free players who hold the key to creating sticky communities, driving virality through word of mouth, and maximizing the opportunity for long-term engagement and monetization of your game service. If you want to avoid the headwinds that companies such as Zynga have run into in recent months and instead ride the tail winds that are driving Riot Games into a multi-billion dollar enterprise, you must learn to love your free players.

To date, most free-to-play game developers have eschewed free players and instead focused (at times myopically) on a handful of big spenders, known in the industry as whales. Whale-driven games are designed to create monetization friction early in a player’s life cycle. This culling process effectively eliminates 98 percent-plus of the new players in a game so that it can instead focus on diving deeply into the wallets of those remaining 2 percent of players who pay. Among that 2 percent, only a tiny fraction has the desire and ability to spend large sums of the money. So the breakdown in some games can become scarily skewed, with as much as 50 percent of the profits coming from 2 percent of the paying players – or just 0.0004 percent of the total audience.

As the free-to-play game market has evolved and the number of competitive whale-driven games has increased on both Facebook and smart mobile devices, an uncomfortable fact has settled on the industry. Despite the ability to reach billions of potential players, the number of whales with a desire to spend thousands of dollars is relatively tiny. Moreover, whales are not going to be able to spend huge amounts of money across multiple games at any given time. As a result, companies are seeing new whale-driven games perform worse than their predecessors, while also cannibalizing their own whales in existing games.

Contrary to popular belief

The truth is that players who choose not to pay anything are far more valuable to any game company looking to create sustained value for its shareholders. Here’s why:

The best free-to-play games are socially driven. The entertainment value of playing the game is either intrinsic to playing with other players or at the very least materially enhanced. By designing your game to compel free players to stick around for a long period of time, you create social stickiness that will result in a higher retention of your paying users. This is common sense. Who wants to save for months to buy that shiny new BMW if there are no friends or neighbors to admire it?

Moreover, free players are by far your best means of low-cost, high-quality player acquisition. Free players who enjoy the game are viral in the old-fashioned sense: They actually tell their friends to try the game because they enjoyed it. Instead of paying for 50 percent of your new users and then watching them churn out in a week, design your game to ensure free users enjoy it and watch your cost of player acquisition drop dramatically.

And it’s a funny thing about those free users:  the longer they play any free-to-play game, the more likely they are to convert to paying players. The cohort of free players who continue to be actively playing a new game for a month are nearly three times as likely to convert as new users you paid to acquire. The financial advantages of focusing on free players are further enhanced when your game caters to a more diverse demographic and geographic player base. There are simply more players in the world who will happily spend $5, $10, or maybe even $25 on a game they love than there are those who are capable of spending thousands of dollars.

Games that get it right

It’s no surprise then that two most profitable free-to-play games currently in the market have eschewed whale-based monetization. League of Legends from Riot Games and World of Tanks form WarGaming.net decided to focus their game design and monetization efforts with a long-term view of value creation, which prioritized the free players.

Unlike their Moby Dick-obsessed competitors, LoL and WoT are designed to convert a far higher percentage of their players – in some cases ten times as many players as a whale-driven game. Instead of designing the game to optimize for a handful of big spenders, they’ve created economies that allow players to incrementally spend in lockstep with the time they spend in the game, which has resulted in higher retention, effective word-of-mouth virality, and a higher median lifetime value of players.

Both League of Legends and World of Tanks made a conscious decision not to force players into “purchase or else” decisions early in the game. Their pricing and merchandising systems are optimized for consistent small- and medium-sized transactions instead of a handful of big-ticket items. They thoughtfully open the vast majority of the game’s experiences to a free user while making sure value is delivered when a player makes the decision to pay. Thus, a virtuous cycle is born.

Happy free players lower overall acquisition costs, while paying players feel a stronger relative bump for their decision to spend. And all players are compelled to keep playing with one another, as there are plenty of teammates and opponents to fuel the multiplayer and social dynamics of the experience. That leads to higher retention; with higher retention comes higher conversion to paying, higher spending, and ultimately higher profits.

There are challenges in designing games to achieve those goals.  Basing your monetization systems off the game mechanics that generate real fun is the starting place.  Inspiring players to make themselves unique or benevolent in the eyes of fellow players are great incentives — while frustrating them by designing the game to be enjoyable only when you pay is not.  Don’t force failure for free players and make sure the forks you create with opportunities to pay come with a balanced frequency, and not as hard walls.

The opportunity for the free-to-play game space to grow is limitless. With browsers, smart phones, tablets, and Facebook, the digital reach of games is quickly going to reach a number closely approximating the entire population of this planet. The realization of this opportunity is going to be driven by great products that create real value, products that are designed and managed to entertain 100 percent of their players – not just the 0.0004 percent known as whales.

Greg Richardson is the founder and CEO of Rumble Entertainment, a premium free-to-play game company dedicated to create irresistible and beautiful cross-platform multiplayer game experiences for connected gamers.  A 20-year video game industry veteran, Greg was vice president and general manager of EA Partners, senior vice president at Eidos in charge of product development, and an investor with Elevation Partners, where he led the investment in Bioware and Pandemic, and served as chief executive of Bioware/Pandemic through its sale to Electronic Arts.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Sure, tons of people canceled their monthly subscriptions to big-budget massively multiplayer online games, but they aren’t saving that money. Instead, gamers are shifting to free-to-play games like League of Legends and World of Tanks.

That shift will stimulate a continued growth in worldwide MMO revenues, according to financial analyst firm SuperData Research. The think-tank expects the industry, specifically on the strength of free-to-play, to reach $9.5 billion by 2015.

“I recognize that there is some debate over including League of Legends [in our data] since you can only build characters within a short timeframe and play with a more limited number of players,” SuperData business development manager Sam Barberie told GamesBeat. “But for research and competition purposes people tend to group it with MMOs, especially because you are still building and leveling up a character. Our data come directly from publishers and developers, so it’s sort of a two-way street of both them and us considering a game to be MMO.”

SuperData pointed toward 2012, where F2P games out-earned pay-to-play titles in all 12 months. This new model is here and it’s where the money is at.

League of Legends, a multiplayer online battle arena (MOBA) from developer Riot Games, is the best example of how lucrative free-to-play is for some companies. Riot sells players different skins for their characters — along with other in-game goods — to help personalize the player experience. This paired with the game’s popularity as a competitive eSport, which is always bringing in new players, generates major profits for the developer.

World of Warcraft still makes more money than just about any free-to-play game, but it also has pushed out all competing subscription-based titles. So while the traditional $15-a-month games have a clearer path to big revenue gains, it is also a market that’s nearly impossible to crack.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Over 40-million people are now registered for the team-based action game World of Tanks.

In terms of active users, World of Tanks developer Wargaming claims that the titles’s Russian server at one point had 500,000 simultaneous players. Which proves my long-held financial theory that Russia should move to a tank-based economy.

The tank game is a popular free-to-play team-deathmatch armored-vehicle battler set during World War II.

This is another example of a developer finding massive success with the free-to-play model. Gamers can sign up for a free account and then either grind away for hours to earn upgrades or pay for improvements via in-game transactions.

Wargaming hopes to expand its reach in this sector of the market with airplane and naval spins on the World of Tanks model. World of Warplanes, the dogfighting game, is in closed beta now. World of Warships, the naval battle title, is still in development. Gamers can follow those titles on the company’s central hub Wargaming.net.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Digital distribution is all the rage these days. But none of the current players focus on distributing massively multiplayer online games from different game publishers. That’s exactly what PointMMO is doing, we learned in an exclusive interview with the company.

The Berlin and Singapore-based company is unveiling its platform today to make free-to-play MMOs available for users to play in a quick and easy way. The portal uses progressive downloading, which speeds the time it takes to download a playable client to the gamer. When you click on a game, the platform sends the parts of a game that you need to get started and then proceeds to send the rest in the background as you play. It delivers a near-instant game experience, in contrast to most MMOs, which require you to download gigabytes of data before you start.

“We will be a single point where you can come to enjoy a huge variety of games,” said Kay Gruenwoldt, the chief executive of PointMMO, in an interview with GamesBeat. “We see this as an opportunity to cater to the MMO players.”

Gruenwoldt believes that the site will attract seasoned MMO players who enjoy playing a variety of games and have more experience with the MMO style of play. Those players are likely to be more valuable to game publishers over time, he said. Players can sign up for the closed beta test, which will begin in the coming weeks.

Players register at the site and then PointMMO installs a program that is about 500 megabytes of data on your computer, much like the Unity 3D platform installs a plug-in to enable 3D gameplay. Then you can pretty much progressively download any MMO that is on the site. For players, it will be the fastest way to access and play MMOs, said Gruenwoldt.

Rather than take a 30 percent cut as other platform owners do, PointMMO takes a fee for each player registered. The company has 10 games signed up so far, including launch titles World of Tanks from Wargaming.net and Age of Conan from Funcom. The portal will give developers the ability to self-publish their games and distribute them to a targeted audience.

The company was founded earlier this year and has 25 employees. Rivals include Steam, Electronic Arts’ Origin, and Amazon. Unnamed private investors have poured millions of dollars into the company. Gruenwoldt previously ran Frogster America, the publisher of Runes of Magic, and held positions at Nokia, Crowdpark, and Games Academy Vancouver.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Wargaming, publisher of the spectacularly successful multiplayer title World of Tanks, has acquired Australian online-game software maker BigWorld for $45 million.

In an exclusive interview with GamesBeat, Wargaming chief executive Victor Kislyi said that the acquisition is like many others where a publisher decides to acquire one of its suppliers of a critical tool so that it can stay in control of its own destiny. That’s important as Wargaming tries to disrupt traditional online games with its free-to-play titles, where users can play for free and pay real money for virtual goods. Wargaming has become one of the fastest-growing game companies, and it is insuring that it will control its own technology platform with the BigWorld deal.

Wargaming — based in Cyprus with teams also in Belarus, Ukraine and Russia — makes massively multiplayer online games like World of Tanks, which has had more than 35 million registered users. The company is in the midst of launching World of Warplanes and is working on World of Warships. The BigWorld technology forms the critical platform for all three of the virtual game worlds, Kislyi said. Kislyi says the company is aiming at achieving revenue of $200 million a year in the not so distant future.

“This very crucial for us, as we want to control the technology provider we are using,” Kislyi. “Now we can integrate them to make internal development more efficient.”

Canberra, Australia-based BigWorld makes middleware, or a software technology that allows Wargaming to securely launch and run its online game worlds with millions of users. Other MMOs often use peer-to-peer technology, but that exposes them to security risks. But Kislyi said that BigWorld relies upon more secure server infrastructure, and it also enables the much faster creation of MMOs like those that Wargaming makes.

“This is a huge advantage over any other MMO technology that we know of,” Kislyi said.

Wargaming began using BigWorld about four and a half years ago as it was developing World of Tanks. It is also using the platform in two subsequent games. Now development costs will be lower with BigWorld in house, Kislyi said.

Kislyi compared the technology to the CryEngine from Crytek or the Unreal Engine from Epic Games. One side effect is that Wargaming could eventually integrate the BigWorld software and publish other games based on the technology, even if they are built by outside game developers. But Kislyi said the technology of BigWorld will have to be properly integrated with Wargaming’s software before anything like that could happen.

“BigWorld has a licensing business of its own, and we will continue to support its customers,” Kislyi said. “We will be in a position in the future, if everything goes right, to offer the combined BigWorld and Wargaming technology to anyone who wants to do an MMO.”

The acquisition adds more than 25 employees to Wargaming’s current staff of more than 1,000. Wargaming was founded as a hardcore strategy game company in 1998. But it really took off after World of Tanks — which features high-end, realistic 3D graphics in a world where tanks battle each other in World War II landscapes — debuted in the fall of 2010. World of Warplanes is launching this year, and World of Warships is expected to debut in 2013.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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If you’re a journalist who hits enough behind-closed-doors appointments at the Electronic Entertainment Expo, someone will offer you something. Maybe just a bottled water. Possibly an art book. Almost certainly a USB hub that transforms into a USB robot (nope, not making that one up). Swag is the universal language of E3, as ubiquitous as booth babes and banner ads.

Apparel, however, rules the show. Nothing marks status like walking around the L.A. Convention Center with a fairly exclusive — and free — t-shirt nonchalantly draped over your shoulder. And these were the absolute best shirts (plus a few extras) we saw…or took home ourselves.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Let’s Battle. That’s a particularly apt slogan for Wargaming.net. The  has scored big with its World of Tanks game, a hardcore massively multiplayer online game that lets you battle your friends in World War II tanks. Since it launched in April 2011, the game has gotten more than 30 million players worldwide.Those players are so engaged in the realistic 3D game that they have obliterated 1.3 billion tanks to date.

The company, which was founded in 1998 and previously made hardcore war games for small audiences, has now grown to 900 employees, many of them in development teams in greater Russia.

Victor Kislyi (pictured above), chief executive of the Nicosia, Cyprus-based firm, says, “We are on our way to conquer the world. You can quote me on that.”

Wargaming.net is now lining up the launch of the flight combat online game World of Warplanes for later this year, to be followed in 2013 by the naval combat game World of Battleships. The company plans to link all three of its games together so that users can sign on once and easily move between worlds via a single portal. We caught up with Kislyi at the Electronic Entertainment Expo (E3) this week. Here’s an edited transcript of our interview.

GamesBeat: What are you showing here at the show?

Victor Kislyi: We have the update coming out for Tanks with two gameplay modes. Assault, one team defends and one team attacks, and then Encounter, where there’s one point in the middle and teams have to work their way around it and finally take one. Which guarantees a much faster rate of destruction than the normal battles. And French artillery, French tanks, British tanks we announced, you might have seen the trailer… British tanks coming to commemorate the 60th anniversary of the queen’s reign.

GamesBeat: How big is it now, by the way? Tanks. As far as users?

Kislyi: We believe we surpassed 30 million registrations. But that includes China, which is approximately 50 percent of the world’s online market. Our peak concurrent users in Russia, the record one, was 452,000 Russians playing at the same time.

Let me just give you some facts. Right now we run only one commercial product. We have offices in 10 different countries. Belarus, Ukraine, Russia, Germany, Paris, San Francisco, Singapore, and we opened recently in Korea. So we have some nice ex-Blizzard guys as general manager and PR, the top positions, and we will soon open data in Korea too. We’re growing very healthy in China with our partner, and recently opened with a partner in Vietnam. If you look at the globe, we pretty much took the better part of it, we cover the better part of it.

The company’s now 900 people. Approximately half of it is development on the three projects. Tanks will keep going in Minsk, Warplanes, we’ve obviously produced a big project for that, is in Kiev, and then Battleships. It’s a little early to talk much about Battleships, but it’s in St. Petersburg. The other half is operations. Operations is our American office, approximately 50 people now, and you can see the result.

Finally they can do stuff together on their own. So they do PR, game management, marketing, customer support, advertising, media relations. All of those are the best of the best media guys. You can imagine the amount of media attention we get. So it’s looking great. It’s growing very well.

GamesBeat: Do you have any stats on how much ammunition they’ve used in the game? [chuckles]

Kislyi: We have every, every month, it’s approximately 100 million battles. During these battles, 1.3 billion tanks are destroyed. And the number of shots is 14 billion shots per month. So for World of Warplanes, I’ll just show you a couple of battles and explain along the way.

Right now, the game is looking very solid. It’s flying. This is the American closed beta, we also have the European closed beta and the Russian closed beta going on at the same time. For Tanks, we made a mistake, we did only Russian testing. Most of the testing was in Russia and the west pretty much got the final version from Russia. Here, we don’t want to do that again, so that’s why we have two simultaneous tests.

So our community managers can gather information from the American players, from European players, and of course from the Russians. It’s still not too late to affect the game. So we’re gathering feedback, so that it can be used for the development. We plan to have open beta in a month or two. Two months probably. There’s no fixed date. But somewhere around two months from now. Within the first 24 hours of the alpha announcement, two months ago, we got 100,000 applications. Which is impressive. Now we’re looking at 600,000 registrations. Unfortunately we cannot let all of them in. We’re still testing usability, UI, controls, server connectivity, and such things. Do you recognize Yosemite?

GamesBeat: Yeah.

Kislyi: I requested Yosemite myself, I said I want Yosemite in World of Warplanes.

GamesBeat: You tried to make it easy to fly without a joystick?

Kislyi: Yeah. Our primary mode is WASD (a reference to the keys on the keyboard) with a mouse. It’s working out well. But we’ll also have joystick, game pad, keyboard only, and a couple of other combinations of those. This is the most trouble, the challenging part of the game, but it doesn’t consume a lot of money. It’s time and brainpower, and it requires luck. How we finally twist that difficult keyboard and mouse control in a way that a guy like me and you, just come home from work, tired, download the free game..

We want you and me to start playing right away. For World of Warplanes we will have some PvE training. It will be easier to get in, because in Tanks, you are immediately in player versus player. So here we’ll do some player versus the environment where you’re not humiliated. So far, you can see, the amount of players on the floor, the amount of players World of Warplanes computers, and the amount of players for Tanks, it’s pretty much the same. Warplanes, as we can see today, that’s the first public display of World of Warplanes. It’s getting probably the same interest as World of Tanks, and we’re happy to see that. Especially in America. Let’s face it, Russia is a tank culture, a tank country. In America and the UK, it’s a warplane culture, a warplane country.

GamesBeat: It seems like flying is harder than tank-driving, so…

Kislyi: Yeah, but it’s more exciting and more fun.

GamesBeat: So why do Americans like planes better…?

Kislyi: Because this is historically…World War II, America fought primarily with infantry and warplanes. In the Pacific theater, European theater, there were lots of bombers and fighters. The Battle of Britain… Troop masses and tanks moved in, but that was pretty much towards the end of the war. The real struggle was in the air, against the Luftwaffe and the Japanese air force. You have a lot of books, movies, comic books, toys, in America about warplanes. Private collections.

GamesBeat: The interest tends to follow the historical role of the country, I guess?

Kislyi: We know that, we learned, that there’s something like 340 airshows in America every year. Statistically, almost every day, somewhere there’s an airshow. There’s an association of airshows, they have annual meetings in Las Vegas. So yeah, America is into airplanes. Go to the Smithsonian museum. You know many private collections of warplanes there are? A lot.

Even nowadays, in modern conflicts. Who hits first, who hits hard? Aviation. So that’s an American culture. You can see we have different maps, and we, on purpose, we will be doing, fighting a little closer to the ground than in real life. Because we want the terrain… Like in Tanks, we want it to be a part of your tactics and strategy. The previous map, you’ve seen the canyons, deep canyons, where you actually don’t see the enemies.

Here it’s actually more open, with just a couple of big rocks. We’ll do New York City with skyscrapers, we’ll do the desert with cliffs, so that you can use the terrain profile. For example, to outflank the enemy formation along a canyon. You can go into the clouds and become invisible. If you attack the enemy from out of the sun, the enemy will have a hard time seeing you. So far the experiments show that this gives quite a big variety of tactical and strategic tricks you can employ. Individually or as a team.

GamesBeat: These flight sim games were popular for a long time, and then they sort of fell out of favor. Why?

Kislyi: And why is that? First, flight simulation went too hardcore. Here, you get airborne from the beginning. You don’t have to take off and land. All 15 planes are immediately in the air. Why? Really, do you want to spend 15 or 20 minutes taking off and then landing? We would rather have you play three more action battles, rather than landing. We keep our philosophy from World of Tanks. Yes, this game is historically accurate when it comes to plane design. Yes, it’s very photorealistic and will be more photorealistic in the near future. The flight model and aerodynamics are quite sophisticated and realistic too. But yes, when it comes to the element of fun… If there’s any fun element we can acquire at the cost of a little realism or historical accuracy, we usually prefer that fun element. We were doing this successfully in World of Tanks, and here we have the same philosophy. We do a lot of experiments, how can we make it more enjoyable? More fast and more agile. More fair. More…enjoyable. That’s a lot of work, but our company has experience in how to do that.

GamesBeat: Do you have a lot of possibilities for expansion, then, into all sorts of theaters of the war? Going beyond your third game?

Kislyi: It spans from the ’30s, flying biplanes, they’re mostly for training and fun sandbox battles, all the way through World War II with iconic Mustangs and IL-2 Sturmoviks and Spitfires. And then goes all the way to the Korean war, including jets like MiGs and Sabres, American types. I don’t know why, but the German industry decided to discontinue the production of warplanes after 1945 somehow… [laughs] That’s why, like in World of Tanks, we have to use the secret blueprint materials to create the experimental Wunderwaffe machines. In Tanks it worked very well, and it will work in World of Warplanes too. People are even more eager to play this secret Messerschmitt two hundred something… What’s the Messerschmitt? 262 I think? Yeah, so the Germans were actually trying to develop that. We have three primary classes of planes, it’s fighters, heavy fighters, and ground attack. Plus you can imagine the propeller biplanes and jets are classes by themselves. There’s also, for Americans, there will also be aircraft carrier-based aviation with specific features. Pretty much every nation will have some planes which are… This is the Wunderwaffe. There will be some planes with very specific roles.

GamesBeat: There seems to be a lot of money in this kind of thing…

Kislyi: I can probably say that this flight simulator will have the biggest budget of any flight simulation game in the history of mankind. We’ll be up to 1000 warplane models. The difficulty is the MMO side, don’t forget, this is MMO. It has to be seamlessly connected to millions of people. There will be a lot of maps, a lot of terrain types, lots of objects, lots of polishing. Millions and millions of dollars and hundreds of thousands of engineering man-hours. It will be going on for the next five, seven, maybe ten years. That’s a mega-project when it comes to flight simulation. That’s the reason why they discontinued a little bit. It was difficult. Those hardest of the hardcore, where you have two dozen buttons to press and two dozen indicators to look at, only a few thousand people played those. It wasn’t that enjoyable. Here, as I already mentioned, we are about a guy coming home from work and being able to play then. Professional guys like Vlad, he can do miracles here, literally, with maneuvers and stuff. The game does allow you to do that. Probably you will not expect the ace quality of flying at level one or two or three.

GamesBeat: How many levels are there?

Kislyi: Like in Tanks, ten. And of course one warplane has dozens of components, radio, different wings, engines, cockpit design. Actually all the visual little effects, the composition of the cannon and the machine guns…

GamesBeat: Is this going to be a virtual goods model?

Kislyi: Like in World of Tanks, you can grind for that. You don’t buy a new gun. You play a couple of battles, get experience points, unlock, and then use silver coins, which you also got in battle, to install it. That’s the same concept as in World of Tanks. Needless to say, that free-to-play aspect and monetization is very similar to World of Tanks. Download the game for free, install it like this, and play it as much as you want. And yes, 70 to 75 percent of people, mostly teenagers, will never pay anything and we’re fine with it. We love those people, we need them. Some people, 25 to 30 percent, will from time to time invest five dollars, ten dollars, 15 dollars. As we say, no more than the price of three movie tickets. That’s both west and east….

GamesBeat: What’s the average number, you said?

Kislyi: It differs a little bit across China, Russia, Europe. I guess our average revenue per paying user (ARPPU) is somewhere around between 30 and 40 dollars.

GamesBeat: Which is a lot more than a lot of other games?

Kislyi: It’s a lot more than a stupid cheap fantasy MMO from Asia that girls play. Yeah. We’ve got serious guys who know what they’re paying for, who appreciate historical accuracy, who really want this Messerschmitt or Mustang or IL-2. So they deliberately do this. We don’t squeeze money out of them. Like in Tanks, you’ll be able to get a tier 10 warplane without paying. It’ll be harder and longer. It will be easier if you have this 10-dollar premium account to move faster. We have to make money somehow. We have adaptive music here…

GamesBeat: You’re becoming one of the biggest game publishers.

Kislyi: Frankly speaking, we know that whatever we have or may not have now, a year from now it will be bigger. Two years from now it will be even bigger. We as a company, we came from game development, we were developing games for 14 years. We know how hard it is to be a developer making boxed games and then selling them to publishers and all that stuff. We work our success the hard way. We’ve been through worse times, turn-based strategy, realtime strategy genres… We’ve paid our dues to society big-time. Our success is hard-earned. Right now we’re in a position to generate very healthy revenue, of course. We are reinvesting heavily, as you can see, and we will be reinvesting in new projects and development teams and operational offices around the world. More fancy PR and marketing. This is show business. You have to do PR and marketing big-time. So… Right now, every market we have World of Tanks in is growing. We’ll be growing and we will open new markets and new projects. Our revenue will double or triple a year from now. But again, it’s a lot of hard work, it’s a lot of devotion, it’s a lot of risks we took earlier. We invested everything we had, all we had, in that one project, and burnt all the previous bridges of probably… Less risky but more stable revenue models. That happened in 2008.

GamesBeat: So how many minutes does the usual match last?

Kislyi: Five minutes? You see the plane takes damage in the battle, you can see the holes… You can actually crash planes into another planes. Of course, this also affects the flight models. If you have a damaged wing or something, the plane will react correspondingly.

GamesBeat: And how do you have to repair that?

Kislyi: Yeah, but you pay to repair with silver. Not gold, silver. Listen, you know, in World of Tanks, another avenue of monetization is, if you’re driving a tier 10 or tier 9 tank, if you lose too many battles, your repair cost is higher than the silver you earn. So you have two possibilities. Number one, convert some gold into silver and pay for that. That’s what I will do. Or a schoolboy just will take a tier 4 plane, go do some economically positive battles, and pay for the repair of the tier 9. It’s fair. For me it’s easier to invest 50 cents. The schoolboy, it’s easier to just play another half hour. And just a couple of words about Battleships. Battleships has been developed in St. Petersburg. It’s an impressive 30 seconds. We call it the series, or the saga, the trilogy, the triangle?

It will be combined with the Wargaming.net service. All three projects together. One account, one identity system, the social aspect. You’ll be able to use your gold for all three projects. But the most important innovative thing, the free experience you earn in Tanks, you can transfer over to Warplanes. That’s what I’m doing. In World of Tanks, I have played 8500 battles already. I have like 80 different tanks and variations. I have 1.5 million free experience. I don’t need another tank. I’ll buy French artillery, some British tanks as well, but that’s it. But I can use that as soon as World of Warplanes launches. I will be able to use that experience to get my Messerchmitt 262 immediately. When all three projects launch normally and operate well, the typical situation will be.

As a company we are fine with this concept. If you feel like some fast action, do some Warplanes dogfights. If you’re tired and you want a more strategic thing, you do Battleships, and Tanks is somewhere in the middle. You notice, we rebranded, we used to have the black, gold, and red. This one reflects… We spent a lot of time and money doing that. We used to have this golden flag, and “strategic satisfaction” was our slogan. We don’t make any more strategy games in the box. Now we make free-to-play team-based online battles for guys. That’s why we have this, “Let’s Battle!” That’s what we propose here. Get the weapon of your choice, planes, tanks, battleships, something else in the future, and just go and fight. Quick, fast, lots of adrenaline, there’s no strings attached, there’s no storylines, just go and fight.

GamesBeat: So have you got World of Infantry coming out sometime…?

Kislyi: First, of course, we are on our way to conquer the world. You can quote me. I told you the offices we have already. But let’s not get overwhelmed. How do you eat an elephant. Slice by slice, bite by bite. First we have three very ambitious projects going on, and we have to focus on delivering that. That’s why World of Warplanes is our highest priority now, and we have to make a very solid flight simulation game, very polished. The same for Battleships. Our hands are full now. Of course we have plans, we discuss them in the boardroom, we have a couple of groups of experimenting programmers for mobile, maybe for some other platforms, but that’s not the priority now. First, let’s see how World of Warplanes does, and what World of Battleships will show. And then we can think about helicopters or Modern Warfare-style combinations.

[Photo credit: Dean Takahashi]

GamesBeat 2012 is VentureBeat’s fourth annual conference on disruption in the video game market. This year we’re calling on speakers from the hottest mobile, social, PC, and console companies to debate new ways to stay on pace with changing consumer tastes and platforms. Join 500+ execs, investors, analysts, entrepreneurs, and press as we explore the gaming industry’s latest trends and newest monetization opportunities. The event takes place July 10-11 in San Francisco, and you can get your early-bird tickets here.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Wargaming.net has earned its stripes in PC gaming. Known for the Massive Assault series, Order of War and other titles, the PC development has now started cashing in big time on its hardcore gaming know-how with the success of its massively multiplayer online world World of Tanks.That game has more than 18 million players worldwide, a massive hit that has given the company resources to launch its next big online game worlds. The company has more than 800 employees, making it one of the powerhouses of downloadable online gaming on a global scale.

Wargaming.net will be releasing World of Warplanes in the near future. It has already received more than 100,000 requests from North American players to play in the current alpha test. World of Warplanes will likely launch its public beta in June and launch by the end of the year. We sat down recently with the man behind World of Warplanes, lead designer at Wargaming.net, Sergey Burkatovskiy. Here is an edited transcript of our talk.

GamesBeat: Can you tell me a little more about World of Warplanes and why the warplanes idea was implemented into an MMO atmosphere rather than a single player or smaller online community game?

Sergey Burkatovskiy: Generally, there’s an undeniable trend toward MMOs in the market. And we are no newcomers in the field: World of Warplanes isn’t our first MMO title.

The “Tanks” taught us many useful lessons and we’ve got proven-to-be-good schemes and concepts designed for our first MMO title, which we can now apply to World of Warplanes. Surely, we encountered difficulties, but World of Tanks proved that an MMO has the potential to deliver a great gaming experience, once it’s polished, deep, well-balanced and constantly updated. Take a look at the concurrent user numbers; we have over 500,000 tank men playing at a given moment in time. That’s impressive.

Why planes? Well, that wasn’t a hard choice either. Many people in the dev team are passionate for planes and flight sims, not to mention hundreds of World of Tanks fans asking us to come up with a flight combat title. We were very excited about the idea when only started working on Tanks, and the fact that players pretty much wanted the same thing only urged us towards getting down to the concept.

GamesBeat: What has been the biggest challenge so far with the game? What has been the biggest challenge in implementing the MMO aspect of the game?

Burkatovskiy: Switching from ground tank combat to 3D air battle arenas was extremely challenging in the first place. It called for considerable game engine enhancement, both in terms of server and render improvements, and adjusting to combat specifics (accurate aiming, terrain and weather effects).

Pertaining to MMOs, the firing rate, for example, was a real pain in the neck. A standard battle in World of Warplanes is two teams, 15 on 15 players. It makes up for 30 planes on the battle field simultaneously. Imagine what server capacity would ballistics system need if, for example, the TSh-3 (an early Soviet ground-attack aircraft) alone comes with 10 quick-firing machine guns plus one to fire backwards. When we only started testing first gameplay iterations, the server was close to failing. Server programmers were racking their brains trying to knock over the issue with minimum simplifications in the damage system. Eventually, we managed to tackle it with several small changes, but you’d be surprised how much time those several tweaks took!

Another thing about the MMO aspect: World of Tanks experience stood in good stayer here. With our first MMO title, we ran into a major hitch trying to catch up with the fast-growing number of players. We never expected so many people to join the game and had to drastically increase our server capacity after launching the open beta in Europe and North America. To avoid this mistake with Warplanes, we’ve implemented multi-cluster technology right away.

GamesBeat: The trailers and press release seem to focus on an older era of warplanes from the 30′s up to the Korean War. What led to this decision to use older era aviation planes? Adding to that, are there any planes on releasing modern era type planes/maps in the future?

Burkatovskiy: Well, the first reason why World of Warplanes features only the mid-20th century aircraft is because the game continues the theme started in Tanks. Both games have the same concept and nearly the same setting. So, it would have been awkward to shift the core essence. Let’s now imagine if we add the F-15 as an 11-tier fighter in the American line, right after the Saber. It would EAT the poor Korean veteran. What I’m trying to say here is adding more sophisticated and technologically advanced aircraft would ruin the gameplay completely. So, we’ve decided to stick strictly to the frames we had chosen. Again, the period we are using covers the very birth of the jet as the main means of modern air forces. We have the aforementioned Saber, we have the MiG-15, we have the completely lunatic German prototypes, and I believe players will get no less fun trying these out.

GamesBeat: How realistic is the weaponry in regards to the period and what the original warplanes would have used? And on the same subject of weaponry, how much upgrading will be featured in the game and will there be opportunities to use different weaponry on different era planes?

Burkatovskiy: We are aiming at maximum realism and authenticity, and the development started with an in-depth research on vehicle models and their internal components. The progression system will largely resemble the one used in Tanks. Every plane will have key elements to upgrade and feature multiple modules to unlock: engines, canopies, glider components and many more.

So, players will be able to build their planes up piece-by-piece, change parts and various modules to their liking, and pick the optimal configuration for the most effective behavior in combat. Modules will be based on actual blueprints and schematic diagrams. Of course, you won’t be able to install, for instance, a General Electric J73-GE-3 engine on a WWII fighter: you’ll be offered to choose from authentic options.

Also, we’ll offer quite a plenty of choices in regard to ammunition. WoWP will feature incendiary, high-explosive and armor-piercing shells, as well as shells with combined effects, such as incendiary-explosive shells. Plus, players will be able to put together ammo loads and define ammo sequence.

However, players should bear in mind that too much armament will have reverse effect on speed and agility. It will increase the overall weight of a warbird, affect drag coefficient and other flight characteristics. So, they’ll have to think twice before installing a desired component.

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Don Mattrick, head of Microsoft’s games business, opened the Xbox 360 press conference. He disappointed the crowd since he didn’t mention a successor console to the Xbox 360. He also didn’t announce a rumored virtual cable TV channel on Xbox Live. But he did deliver on Halo 4, which leaked out thanks to Microsoft’s own web site foibles.

Cliff “Cliffyb” Bleszinski, design director at Epic Games, needed more firepower to demo Gears of War 3 on stage at Microsoft’s event. So he brought out rapper/actor Ice T to blow up a giant boss monster.

At Electronic Arts’ press conference, EA chief executive John Riccitiello joked that he didn’t need to bring out celebrities on stage to introduce games. Then EA proceeded to invite star athletes on stage to introduce the new Madden NFL football game.

The battle of the blockbuster shooter games is underway. Call of Duty Modern Warfare 3 debuts on Nov. 8. Activision Blizzard has made sure that just about every gamer in the world knows that with its advertising blitz and a game play debut at Microsoft’s press conference.
Not to be outdone, Riccitiello announced that Battlefield 3, EA’s rival game to Modern Warfare 3, will debut on October 25, a couple of weeks before. May the best shooter win.
The Los Angeles convention center was chock full of people attending E3. But there’s a chance that E3 might leave Los Angeles and head to Las Vegas. Talks are underway for LA to keep the show, which fills 25,000 hotel rooms and generates $25 million on restaurant, taxi, hotel and temp spending.

Yves Guillemot, CEO of Ubisoft, introduced his company’s press conference with a tribute to the French game publisher’s 25th year in business. Ubisoft showed off a wide array of potential blockbusters: Assassin’s Creed Revelations, Far Cry 3, Just Dance 3, Rocksmith, Brothers in Arms Furious Four, Ghost Recon Online and Ghost Recon Future Soldier.

RockStar Games didn’t show up with any new titles. But Take-Two Interactive (the parent company) did show off Duke Nukem Forever, which took forever to develop but is debuting next week. For real.
Jack Tretton, president of Sony Computer Entertainment America, must have felt small on stage as he apologized for the long outage of the PlayStation Network, which was brought low by a hacker attack. But he said that users are coming back thanks to incentives and that Sony is grateful for its loyal fans and wants to earn their trust back.

Victor Kislyi, chief executive of Wargaming.net, has a lot to smile about. After 15 years of making games — and many mistakes along the way — Kislyi says that World of Tanks is a huge hit with more than 3.5 million monthly active users. The game recently launched in the West and has outstanding graphics. In the massively multiplayer online game, you build your own custom, tricked-out tank and do battle online.
Microsoft showed off Forza Motorsport 4, which works with a full steering cockpit and three monitors.
Shigeru Miyamoto, the legendary game designer at Nintendo, showed off The Legend of Zelda Skyward Sword for the Wii. That title may be his last major game for the Wii before going to work on games for the Wii U. Skyward Sword ships this fall. Nintendo showed a “concept prototype” of what Zelda would look like on a Wii U, but it said that was not a demo of an actual game. Next week, the Legend of Zelda Ocarina of Time ships on the handheld 3DS.

Stormtroopers prefer escalators. These folks were promoting Star Wars: The Old Republic, the new massively multiplayer online game launching this year. BioWare is developing the game, which is pretty much a sci-fi version of World of Warcraft. We’ll see if it has the quality to snag a huge audience.

E3 continues to be one of the last trade shows with barbarian marketing tactics. Booth babes a plenty were selling the latest video games. These gals were promoting Margaritaville Online, a Jimmy Buffett online game for Facebook, uh, alcoholics. Just kidding. It debuts this fall and is being developed by Exploding Barrel Games.

Cute kids are also a good marketing vehicle at E3. These kids showed off Disneyland Adventures, a Kinect motion-sensing game that lets you fly through the air like Peter Pan.
Chris Taylor, the creative director at Gas Powered Games, will stop at nothing to hawk his games. Here he is, promoting Age of Empires Online, which Gas Powered is developing as a free-to-play online game.

Marc Whitten of Microsoft showed off the latest Xbox Live features, including the ability to access millions of user-generated videos on YouTube. You can also use Bing Search to find movies with voice commands recognized by the Kinect motion sensor.

Bethesda Softworks showed up with three major games at E3: Rage, Prey 2, and the Elder Scrolls V: Skyrim. Pictured above, Skyrim is a massive fantasy role-playing game that debuts this fall. In this game, you get to fight dragons.
Jenova Chen, co-creator of Journey, showed off his game in the Sony booth. In this game, you play a creature made of cloth that makes its way through the sands to a mountain. The game is wonderfully creative, has no violence, and has spectacular sand effects. Chen said Thatgamecompany worked on the sand effects for two years.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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The game from London-based Wargaming.net shows that it is quite possible to create a next-generation gaming experience on the web that appeals to hardcore gamers and yet is much more accessible than other kinds of hardcore games. That may be why the game has built a huge audience of 1.7 million registered users in Russia — surprisingly large for this kind of title — where it has been available since last year.

This is the kind of war simulation game that American video game companies used to make; but one by one, they all concluded that war games were a narrow market. They dropped out, leaving the market to pioneering Eastern European companies (Wargaming.net’s development team is in Belarus).

The big draw of this game, as you can tell from these screen shots, are the gorgeous graphics. You can recreate World War II tank battles in online duels between two teams with 15 tanks each. The environments are realistic, allowing you to take cover behind burning vehicles or smoke screens.

The game is a persistent universe, or a massively multiplayer online game world. You can start playing for free but can pay real money to upgrade your tanks with better armor, ammo or decorations.

I’ve joined battle on a few occasions with a starter tank and a tricked-out vehicle provided by the developers. It’s a tough game to play, since you have to be an expert shot with your tank cannon. Enemies that are a mile or so away on the map can easily take your tank out with a well-aimed shot, so you have to be careful not to expose your tank’s profile on the horizon unless you’re ready to shoot. When you’re inside your tank, you can feel and hear the rumble as you drive around pastures, towns and hills. Your field of view is obstructed, but as soon as you get the enemy in your cross hairs, you have to shoot and move. Or else you’re toast. The shells thump on the armor when they don’t actually blow up your tank. And you see a nice explosion and fire when you take out the enemy. Your speed and reaction time really matter.

Players can compete against each other using the Clan Wars system that unites thousands of clans from all over the globe in a battle for global dominance. In Russia, players set a record for getting 91,311 players onto a single server. In the European and North American beta tests, World of Tanks recruited more than 700,000 players.

The title has been extremely ambitious, with development lasting more than four years, said Victor Kislyi, chief executive of Wargaming.net. Altogether, there are more than 150 armored vehicles to play from the U.S., Germany and the Soviet Union. You can flexibly upgrade your vehicles to try out different options or weapons.

“We used all the skills and expertise the Wargaming.net team gained while developing our previous titles to create a truly unique and compelling game,” he said. “However, with the game’s release the real work has only begun for us as there are long-term plans of supporting World of Tanks by adding new modes, vehicles and a lot of other high-end content on a regular basis.”

It pays to play this kind of game with voice chat systems such as Vivox, which is integrated into the game, since it takes a lot of teamwork to outwit or surround enemies. If you venture out on your own, you’ll be picked off easily. I discovered this the hard way.

But what’s most impressive is that the company chose to push the outer edge of graphics quality in a fast-action online game.

Cool graphics look great on fancy computers and consoles, but they can often drag down the performance of an online game. You need a decent PC to run this game the right way, but it is built to scale so that people with older PCs can play it in some fashion. You can learn a little history as you play and upgrade your tank on a path, so it’s not just a tin can on tracks.

Wargaming.net has a 250-member development team in Minsk, Belarus. Since 1998, it has shipped 13 games, many of them based on World War II combat. In 2009 and 2010, the company was named the best developer in the former USSR at the Russian Game Developers Conference.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Europe’s revenue from digital distribution of games hit $2.2 billion in 2010. That number could be higher, but the European market is actually under-served when it comes to digital content, said David Cole, analyst at DFC Intelligence, in an interview.

“Europe is highly fragmented,” Cole said. “Our growth forecast assumes that the market will get better at serving the gamers who want to buy online.”

The study was created by market analyst firm DFC Intelligence working with data from Skrill Holdings, owner of digital payments firm Moneybookers.com, and virtual economy firm Live Gamer. The findings will be presented Thursday at 1:30 pm in a Monetizing the European Market for Virtual Currency panel at the Game Developers Conference.

Europe is hard to target with a single online game distribution channel. That’s because there are different online stores and many different payment methods. Those idiosyncrasies may it hard and costly to reach all of the gamers who want to buy games digitally. The payment systems have to be worked out country-by-country, said Alexander Brutin, senior vice president from Moneybookers.com, which offers 110 different payment methods.

The survey covered responses from 2,800 PC gamers in Europe. Of those surveyed, more than 76 percent had purchased a full game via online delivery. Andrew Schneider, president of Live Gamer, said that gamers are willing to buy games online and use microtransactions. But the biggest obstacle to overcome is the ease of payment processing. If there are more flexible payment options beyond credit cards and debit cards, the Europeans are more likely to buy. Schneider said he was very encouraged by fast growth in Eastern Europe. (Pictured above is World of Tanks, a popular new online game from Europe).

“It’s a no brainer for online game companies to expand in these regions,” he said.

One of surprises in the report is that some countries are extremely active when it comes to buying games online. In Romania, for instance, there is a sophisticated broadband infrastructure and payment system. On average, Romanian customers make five transactions a year at an average of $24 each. That’s pretty high. By comparison, the U.S. is about $8 a year, the United Kingdom is around $12 a year, and the four Scandinavian countries are $20 per year.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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