The Business of Peggle

Dave Roberts, CEO of Popcap Games

Dave had just returned from a trade-show in China and had never before witnessed the over-the-top spectacle that is a Chinese press-conference.

Popcap is based in Seattle, with a mobile studio in Dublin and another development studio in Shanghai. The standard myth is that it takes three people and $25k to make an enormous profit. While this may have once been the case, it's not that way any longer. Another myth is that casual game development is somehow easier than a triple-A title. A third myth is that the games are necessarily designed with a 40 year-old woman in mind, classing the whole shopping/baking game genre as “panderware”. The fourth myth is that once a game is produced that it is a lifetime income stream. Fact is, casual games do have a lifetime and the income stream does eventually go to zero.

2007 industry trends

• Content as commodity

• Lack of new IP

• Increased production values for its own sake

• Slow new customer growth

• Price pressure

Peggle was launched February 2007, and it was the first franchise and original IP they made in two years since Chuzzle in 2005. The game has a Pachinko-style mechanic. Peggle was an expensive product, three years in production with 3-6 people developing and a total budget over 1 million (PC+Mac) and an additional million for other platforms.

Peggle's initial sales were strong, but they dropped off significantly early on. The portal presence was very strong intitially, and the product did eventually recover and it pulled in strong revenue months later.

Popcap.com is a good resource for them because the site and the brand has a loyal following. Not unexpectedly, they had a huge spike at the beginning from loyal users waiting for the product to launch.

PR was a long-term effort. It wasn't a matter of a big push at the beginning and then watching the money roll in. The PR effort was constant for a year, and it paid off in some very high profile reviews and profile.

Mac was also a good payoff. It's a much smaller market, but the Mac users are hungry for new content and bought the game in higher proportions. Another success was leveraging new distributions, specifically Valve/Steam, as well as a crossover “Peggle Extreme” aimed at Half Life fans. Sales of the regular product increased quite a bit from the Steam players following the crossover game.

Web games for Popcap are an awareness tool rather than a revenue generator (ads). The web game version increased the downloads of the full game quite a bit.

Another success was the iPod version. It was more than a “port” or an afterthought. It was a new product intended to leverage the hardware of the iPod (specifically the scroll wheel) to its advantage.

Retail distribution is a pain and is expensive, but it can be great if it works. People in general have a comfort factor with a box and a CD that they don't get from a download.

Mobile versions are on the horizon. The potential revenue is very large, but the hurdles are large and difficult.

Major show announcement – Peggle for the Nintendo DS. It'll be available this winter along with two other Popcap games.

Success relies on multiple platforms and distribution channels. You must leverage more than one to succeed.

Better gameplay is important, and a badly-playing game will come back to bite you one way or another.

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