5 Reasons “Words With Friends” Is Awesome

March 19, 2012

Introduction

While I may be late to the party, I recently started playing Words With Friends. While the game can create some interesting situations (e.g. I recently sat across from a friend at a café, as we silently traded turns from our smartphones – neither of us spoke a word to one another for quite some time!), it also has the power to connect long lost friends and discover new people who share a common interest.

It took me (and my family) 10 minutes before we were all hooked. Words With Friends is awesome. And here’s why.

1) It’s Universal.

You don’t have to be an English or language major to enjoy playing. In fact, words (and images, too) are the common language by which we share life’s experiences. While some games have difficulty crossing cultural boundaries, Words With Friends can be enjoyed in any language or culture. I’m interested to see whether Zynga expands usage of the game to other countries, languages and cultures.

2) It’s cross-platform.

You can play Words With Friends on iOS, Android and Facebook. In my household, we had games going across iPad, iPhone and iPod Touch among family members. And we also had contests going with friends, who were playing on Android phones and tablets. Several members of my parents’ generation are on Facebook (including my parents) – so I have the option of playing with them, too. And isn’t that an interesting statement in itself, where the major platforms include mobile operating systems and … FACEBOOK.

3) It’s cross-generational.

To my earlier point about word games being universal, I found it interesting that my daughter’s generation, who frequently use iPods and tablets, had an interest in playing the game with their parents. On a Saturday evening, my family had the following combination of games going on with another family (we were in our respective homes):

  1. Adults facing adults: 4 games.
  2. Adults facing kids: 2 games.
  3. Kids facing kids: 1 game.

So that’s seven simultaneous games across two families. Words With Friends is the new “Saturday night at the movies.”

4) It’s at a comfortable pace.

Unlike other games where there’s a “time and place,” the pace of Words With Friends is entirely dictated by the two players. And usually, that’s completely fine with both players. My “friend” could take 2 days to make a move, and I wouldn’t mind so much (though I may give him a call or send him a text message after 12 hours). Remember how excited you were to receive a new email, during the early days of email? I get the same excitement when I receive the “It’s your move” notification in this game.

5) It’s the “new social networking.”

While I’ll continue to enjoy reading people’s thoughts on Twitter and checking out friends’ purchases and song selections on Facebook, I think the “new social networking” is about shared experiences. What better a way to “network” with someone than to share the experience of word battles, which take place over the course of a day (or more).

Words With Friends has a convenient chat area, which means you can further share in the experience by passing compliments back and forth. Or, you can lament how the word “za” could be worth 31 points (and who even knew “za” was a word?). The “new social networking” is going to be less about status updates and more about in-experience updates.

Bonus reason: the new check-in (sort of).

I have ongoing Words With Friends contests with my wife. I often receive the “it’s your turn” notification (on my iPhone) during her commutes. In the morning when it’s my turn, I know that she’s safely boarded her commuter train. In the early evening when it’s my turn, I know that she’s on the way home. Isn’t that neat?

Conclusion

Thanks, Words With Friends, for the shared experiences you’ve enabled among family members and friends. To date, I’ve played with people that are geographically quite close to me. The real power, however, is staying with touch with people on the other side of the world through a shared experience.

And with that, I must be off – it’s my turn!

3 Comments | Social Media | Tagged: , , , , , , , | Permalink
Posted by Dennis Shiao

What Virtual Events Can Learn From Groupon, Quora and FarmVille

December 18, 2010

Introduction

Successful web sites provide a great opportunity: the chance to study what makes them successful and apply those learnings to your own websites or applications.  In 2010, three of the “most talked about” web sites were Groupon, Quora and FarmVille (though FarmVille is more a discrete app, rather than a web site).  Let’s consider how some of their concepts can be applied to virtual event experiences.

Groupon


Groupon is said to be in the local advertising space, but they’re really much more than that.  They’ve hit the mark with a group buying phenomenon (using bulk purchasing to drive down prices) combined with creative and entertaining email copy that keeps subscribers eager to receive the next day’s email.

Groupon, which serves local businesses, segments their offering by geography.  So I might subscribe via San Jose, CA and receive offers from merchants who are near me.  But the Groupon model could certainly apply to national or even global brands.

Group Viewing at Virtual Trade Shows

Now, let’s consider a common dynamic at virtual trade shows.  Exhibitors (sponsors) would like to get their message across to attendees, while attendees are resistant to hearing unsolicited product pitches.

How can you “arbitrate” this situation?  Consider Groupon, where the “daily deal” only registers when a certain number of users agree to purchase the item(s).  Here’s how it might work with sponsor presentations (webinars) at a virtual trade show:

  1. Five sponsors list their webinar title in the trade show Auditorium
  2. Each sponsor is “on alert”, ready to begin broadcasting their live presentation
  3. No presentation begins until it receives 50 (or more) viewers
  4. The presentation continues, only if it can continually sustain 35 simultaneous viewers – if it drops below 35 viewers for more than 5 minutes, the presentation closes

Benefits

  1. Puts portions of the presentation agenda in the hands of attendees
  2. Forces sponsors to present on relevant topics
  3. Forces sponsors to “deliver what they sold” with regard to the presentation
  4. Ups the overall quality of sponsor presentations, as sponsors need to both “sell” the topic and sustain the audience

Quora

Quora is “a continually improving collection of questions and answers created, edited, and organized by everyone who uses it.”  Question and Answer (Q&A) services have been around for some time. Quora has picked up steam in 2010 due to the quality of the members participating (e.g. some of the leading thinkers on the web – and in Silicon Valley).

In virtual events, experts and leading thinkers in a particular industry have gathered online.  They can listen to featured experts (e.g. the presenters), but the event doesn’t fully extract and share the collective knowledge of those assembled. If done right, a Q&A service layered on top of a virtual event can be quite useful.

In fact, let’s consider a related Q&A service, Aardvark, which is now part of Google.  With Aardvark, “you email or instant-message your question to Aardvark, it figures out around half a dozen people you know who might have a good answer, then emails or IMs them for a response and sends what they say back to you.” (source: VentureBeat article).

A virtual event platform could implement a “Quora meets Aardvark” model, whereby questions are distributed to online attendees – and answers are fed back in semi-real-time.  Questions (and their answers) could be shared not only with the requester – but, all attendees, based on their selection of particular topics.

FarmVille

On the surface, FarmVille is about planting your virtual crops and tending to your virtual farm.  But below the surface, its “power” is in the psychological reward of achieving success in something you take pride in.  It’s the same dynamic that fuels entrepreneurs (who take pride in their businesses) and Twitter power users (who take pride in their following).

As virtual events shift from “point in time” live events to “365 day communities”, the challenge becomes how to sustain an ongoing and active community – who will visit the environment on days where absolutely nothing is scheduled.  It’s the same challenge Zynga had – how do you incent farmers to tend to their virtual farm each day?

Virtual Farm Meets Virtual Community

For virtual communities, there needs to be a parallel to that virtual farm – an abstraction that allows members to feel psychological reward when they’ve done something meaningful.  Ideas include:

  1. Elevated  member profiles. Turn the “vanilla” user profile of today into the parallel of the virtual farm
  2. “Pimp my space”. Exhibitors get to build booths – now, allow attendees the freedom to create their own spaces and receive ratings on them
  3. Leverage “status badges” on the profiles – but ensure that demand consistently outstrips supply
  4. “Rate the ratings” – allow members to rate the worthiness of a rating (a la Amazon.com, and “Was this review helpful to you?”) – top rated members receive elevated status in the community
  5. Prominent Leaderboards related to particular activities, games, etc. – these can be a tremendous draw, as users continually return to check on their position on the board

Conclusion

Groupon, Quora and FarmVille have taught us some valuable lessons.  The rising demand for virtual events tells us something as well.  Aardvark may have hit upon the right model – in which they combined social collaboration with a real-time (or semi-real-time) component.  Perhaps Grouopon and the like have something to “learn” from virtual as well.

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Posted by Dennis Shiao

The Name Of The “Game” Is Engagement

August 9, 2010

Future brand loyalist or virtual goods buyer?

Introduction

Social gaming start-ups are a hot commodity these days.  In the past 12 months, Playfish was acquired by Electronic Arts and Playdom (more recently) was acquired by Disney.  Zynga, which remains independent, has a valuation that’s reported to be as high as $5B.  I expect that CrowdStar, another independent gaming start-up, will be acquired before 2010 closes.

These gaming companies provide “free to play” games on the web and on smartphones.  They then sell virtual goods (within the games) so users can achieve an elevation in status (e.g. a sharper sword, more crop for the farm, designer sunglasses to replace your generic pair, etc.).

Sustainable Growth Can Be Challenging

These gaming start-ups have attractive attributes:

  1. Ability to generate hundreds of millions in revenue (in some cases, more)
  2. High growth rates in users, revenue
  3. High profit margins, since the “cost of goods” (for virtual goods) is virtually zero

While it’s hard to argue with the results that these start-ups are turning in, I wonder if we might be in a mini-gaming-bubble, in terms of current valuations and the potential of sustainable, long term growth.

Social games can be similar to the recording and film industries.  Success depends on the blockbuster hit.  Over time, it becomes more and more challenging to consistently produce the blockbusters, especially in the face of growing competition.  Today, Facebook serves as a great “record label” for the gaming companies.  It provides a marketing vehicle that you can’t find anywhere else – “distribution” to its 500+ MM “listeners” (users).

The gaming companies know, however, that they can’t put all their eggs in the Facebook basket – hence, the plans from Zynga to launch their own Zynga Live platform (as one example).  The gaming companies need their blockbuster hits to turn into self-standing brands (e.g. FarmVille), which then relies on a variety of distribution vehicles.

We know that consumers can be fickle, however.  Recall the progression of “hot social network”, from Friendster to MySpace to Twitter/Facebook.  Games will have a related challenge.  FarmVille is not going to be the #1 game forever, which means that Zynga is already figuring out the “next FarmVille”.

I believe there will be a short list of winners in a market that will be increasingly fierce.  In addition, I wonder if over the long term, the rate of virtual goods purchasing is sustainable – or whether it will continue to grow over the long term.

A New Game in Town?

One of the challenges of the virtual goods model is the funding source. Revenue growth is dependent on fickle consumers, who could love your game one day and move on to another game the next day.  And yes, I realize that part of good game design is to build in the hooks to create user loyalty.

That being said, what about services whose funding source comes from brands that want to reach consumers?  The bills in their “wallet” are of higher denominations than the $1’s and $5’s that consumers use to purchase virtual goods.  In addition, “brands are already brands”, which mean that they have a pre-existing following from consumers.

Foursquare

Consider Foursquare.  Some consider it a “location based service”.  I view Foursquare as an engagement platform that’s built on top of a location based system.  In fact, Foursquare has a loyalty program that generated successful outcomes for Starbucks, Ben & Jerry’s, Whole Foods and many others.

The Foursquare business model is both powerful and scalable: powerful in its use of technology (e.g. location based check-ins) and scalable in leveraging existing brands (e.g. Starbucks) for the consumer following and activity.

Location based technology is great, but the long term success of Foursquare is more about the engagement and loyalty programs it facilitates for brands, based on the applicable and available technology of the day.

Nitro Participation Engine from Bunchball

Keep your eye on the Nitro Participation Engine from Bunchball – a Silicon Valley start-up who counts NBC, Warner Brothers and Victoria’s Secret as clients.  The Nitro engine “drives participation using Gamification”, which means that any brand can easily add gaming elements to their web site(s) – and then leverage the Nitro engine to track user actions, points, status and leaderboard. In addition, brands can use Nitro to deploy and sell virtual goods.

What This Could Mean

I think we could be witnessing a transformation of the advertising industry.  If the 90’s and the 00’s were about banner ads and paid search, this coming decade could be about engagement and loyalty platforms.

Foursquare, Bunchball and others have much to gain – if they can tap into a small percentage of the $100+B spent on advertising annually, they’ll make their investors very happy.

These engagement platforms can move from brand impressions (90’s) to brand engagements – where the engagements are longer lasting and more valuable than a click on a paid search ad.  They’re more participatory and can result in immediate purchases (e.g. the latte that someone just purchased at Starbucks).  In addition and perhaps more importantly, they enhance loyalty between consumers and brands, which is great for the long term.

Of course, sustainable growth is a challenge with any technology. Engagement platforms will face their own challenges as they see adoption grow.  Consumers will only be able to participate in so many engagement or loyalty programs.  That being said, consumers are taking batting practice right now – the first inning has yet to start.  Enjoy the ballgame!

I’ve now managed to speak enough.  Leave a comment below to share your thoughts on this topic.

Related Links

  1. ClickZ article (by Christopher Heine) on brand engagement featuring Booyah, Loopt, Brightkite, Gowalla and Stickybits
  2. “Foursquare’s Future Slowly Takes Shape“, by Om Malik of GigaOM
  3. “Social-media games: Badges or badgering?“, by Caroline McCarthy of CNET

4 Comments | Social Gaming | Tagged: , , , , , , , , , , , , , , , , , , , | Permalink
Posted by Dennis Shiao

At A Crossroads: Where Does Second Life Go From Here?

July 2, 2010

Crossroads

June 2010 will mark an important month in the history of Linden Lab and Second Life.  On June 9th, the company announced a restructuring that included a 30% reduction of their staff.  On June 24th, the company announced that CEO Mark Kingdon was stepping down and named company founder Philip Rosedale its interim CEO.

Second Life is clearly at a crossroads – it will be crucial for Linden Lab to determine the best path forward.  To do so, they need to identify the right questions to ask and then determine the right answers to those questions.

What is your audience and customer segmentation?

Second Life takes quite a broad approach today – there are a wide assortment of communities [audience] (see their Destination Guide) and an equally wide assortment of land owners [customers].  Having cut 30% of staff, the question at this juncture is whether the company (and the platform) is well suited to cater to “anybody and everybody” or whether it’s better to narrow the focus.

One “focus area” may be in evolving the platform to cater to the hobbyists and loyalists who helped grow the Second Life community from the early days [consumer focus].  Another focus area, while unlikely, may be in catering to corporations for business use (I say “unlikely” because the Enterprise group was let go in the June staff reduction).

Yet another focus area may be in catering to particular categories (e.g. Music, Art, Education).  If Second Life focused their resources around building the #1 immersive music experience, would that have a larger impact than evolving the broader platform to meet everyone’s needs?

So the question really comes down to “narrow vs. broad” – by identifying narrower segments to target their service, can Second Life create a more rewarding and enjoyable experience for both residents and land owners?

What is the revenue model?

Today, the Second Life revenue model is based around a virtual economy, whose currency is the Linden Dollar.  Residents purchase Linden Dollars with real money (e.g. US Dollars) and can then buy land (in-world) or buy virtual goods from in-world merchants.  One of the challenges inherent in this model is its dependence on others to sustain a viable audience (community).

The model works when the audience is growing and the community is thriving; however, when the audience declines and becomes less active, purveyors of virtual land find the ROI less compelling and the audience decline snowballs (since users have fewer residents to interact with each time they login).

Are you a media company or technology platform?

Second Life can go one of two ways here – they can morph into a media company (and have direct influence over the audience) or they can move to a pure-play technology platform provider, which shifts the audience generation “burden” to licensees of the platform.  As a media company, they’d be similar to Facebook, Zynga, IMVU and Slide, with revenue being a mix of advertising, sponsorship and the sale of virtual goods.

Today, I’d say that Second Life is somewhere in between – they’re a technology platform that has no explicit and associated “force” to drive audience (like a media company does).  Resolving this “grey area” will be important.

Where do you take the technology?

To some degree, the technology vision was shared in the June 2010 restructuring announcement – the company will migrate Second Life to a web-based experience, with no software download – and, they’d look to integrate popular social networks to be more accessible and relevant.  Of course, there’s a delicate balance to manage here, since a core component of the Second Life community uses the service for the immersive experience that a downloaded client can deliver.

Here, Second Life can take a page out of OnLive’s book – if OnLive can deliver immersive, action-rich, multi-player video games from the cloud, then one would imagine that a 3D immersive virtual worlds can move to the cloud as well (though, of course, it’s not trivial to achieve).  Second Life needs to think beyond the web as well and determine the viability for apps running on iPad/iPhone, Android and related mobile operating systems.

My Answers (Recommendations)

These are obviously complex questions that require a lot of analysis – in addition, there may be other questions that need to be asked.  The answers to these questions are interrelated and need to be answered together, not individually.  Here are my high level answers / recommendations:

  1. Audience and customer segmentation: Go narrow – you’ll lose segments of your user base, but the core segments you choose to focus on will see solutions and experiences that are more targeted and relevant.  Build upon these small successes and grow outward again.
  2. Revenue model: Move to a SaaS licensing model (priced in US Dollars) – keep the Linden Dollar currency system in place for the purchase of in-world virtual goods.
  3. Media company or technology platform: Become a pure-play technology platform that partners with media companies as a sales channel.  Give media companies incentives and easy-to-use tools that foster growth in virtual real estate – encourage them to be your sales champions and bring their audiences into the community.
  4. Technology evolution: Complete the transition to a 100% web-based offering (no small task!) – and, on the journey there, have plans in place for iPad and Android apps.

Times of turmoil give companies the opportunity to throw convention out the window and reinvent themselves.  Consider another company whose original founder returned to transform them from a “has been” to the most valuable technology company on the planet:

Apple Computer.

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4 Comments | Second Life, Virtual Worlds | Tagged: , , , , , , , , , , , , , , , , | Permalink
Posted by Dennis Shiao

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