bloodties_1_lg.jpgI spent 70 working hours at the Game Developers Conference last week and here are the things that I gleaned from that experience. It was grueling but it’s what I do for fun as well as work. I’ve culled my notebooks for the things that matter to business people, not just gamers. The funny thing, if you stick with me, is that we will wind up in Siberia.

In this post, I’ll focus on casual games; the people who make them clearly feel like they’re stepchildren, overshadowed by the excitement around hardcore console games such as the latest chainsaw bayonet experiences of the upcoming Gears of War 2.

The first two days were like the college lecture days. They were full of people attending the summits and seminars that weren’t the prime-time events. Yet they were very eye-opening in a lot of ways to me. I spoke at the summit for Casual Games, but I also listened a lot to a group that felt like it had been undervalued. The definition of casual games is that they’re not hardcore and can be played for a short time by anybody. (Think Windows Solitaire and its 400 million copies estimated instead of Halo 3 and its 8 million sold).

My experience in this area is downloading the Diner Dash game that I played with my kids. Created by Rebel Monkey’s Nick Fortugno (then GameLab) and published by PlayFirst in 2003, this game has had more than $35 million in consumer spending and 200 million trial-to-purchase downloads. You simply download it, play the trial, and decide whether you want to fork over money.

The market for online casual games, from Tetris (estimated 60 million sold in lifetime) on cell phones to Bejeweled (350 million downloaded and sold on mobile phones) on computers, hit about $2.25 billion worldwide last year, according to Jessica Tams, head of the Casual Games Association. She says she no longer gets those funny looks when she talks about her group. Before, people would ask skeptical questions. Can you make any money with those? Are those real games?

“Now the question is how much money can I make how quickly?” she said. Even hardcore game companies want to make their games more accessible to wider audiences and so they’re asking how they can add casual elements to their games. That’s a byproduct of the Nintendo Wii, the most casual of the game consoles.

Casual games escaped the frenzy of investment that went into mobile games, which have been disappointing lately because sales haven’t justified all of the investment. As far as Tams is concerned, the casual market hasn’t truly hit mass market proportions yet. There is, says Joel Brodie, founder of the Gamezebo casual games review site, no casual game yet that has hit the cover of Time magazine.

By and large, the press has ignored this category, rarely reviewing or otherwise writing about casual games. But even EA Casual Gaming chief Kathy Vrabeck agrees that casual games will hit $13 billion about four years from now. With EA’s Hasbro properties, it intends to focus on the market. ClubPogo, a subscription service from EA has over 1.5 million subscribers who pay $5.99/month. Microsoft, Ubisoft, Yahoo! and a bunch of others are already in the space. Everybody feared the giants would own this space.

The good thing is that no one has a lock on ideas, and with casual games, the core game play matters more than big budgets on cinematic graphics. Consequently, it’s no surprise that 50 percent of the top 10 games on RealArcade’s Casual Connect Europe list were developed in Eastern Europe.

Recently, the top game was Blood Ties, developed by GameOver from Siberia, published by Merscom in North Carolina. The second top game was Farm Frenzy, developed by Melesta, from Minsk City, Belarus, published by Alawar Entertainment from Russia. And the third top title was Spirit of Wandering, developed by Artogon of St. Petersburg, Russia, published by RealGames.

Blood Ties, a game where a private detective has to solve the cases of missing people, came about because of a chance meeting at the Casual Connect Kyiv conference in Ukraine in 2006. Casual game publisher Merscom met with GameOver, a Siberian company known for developing the Brave Dwarves games. GameOver showed off a concept for a puzzle game called Jewel Craft.

Merscom negotiated to get the rights and funded the final development. Merscom hooked up with Lifetime Networks to talk about making a game for its TV show Blood Ties. Merscom got GameOver to do that work, with development starting in August, 2007. The title launched in early 2008 and it hit No. 1 on a number of game portals, including RealArcade, BigFish Games, Shockwave and SpinTop Games. The first day of sales recouped the entire investment.

The casual game market has plenty of ways to benefit from digital distribution models. Many games are ad-supported or subscription based. Trial before buying has been the standard model. But companies are trying out micro transactions, where you buy things inside a game for small prices.

In the online game Puzzle Pirates, developed by Daniel James’ Three Rings on a shoestring budget, you can buy things with virtual currency. Thanks to that game and business model, James has 30 people working for him and he predicts that online games will make money through virtual currency in the next decade.

There are still some folks who feel that casual games are small change. The core gaming market is $30 billion, after all. But those quarters add up over time, as those arcade machines once proved.