At the University of California San Francisco's Mission Bay Conference Center an assembled crowd of journalists and game developers took part in a keynote panel discussion consisting of veteran iPhone game developers Steve Demeter (CEO, Demiforce LLC), Andrew Lacy (COO, Tapulous), Keith Lee (CEO and Co-Founder, Booyah) and (CEO and Founder, ngmoco). Each person on the panel comes with a unique pedigree and perspective on the mobile device's future. From big developers with a wealth of titles and employees to independent developers with small staffs that have garnered viral success -- the panel was notably diverse in its spectrum of backgrounds.
How do we make money?
The first major discussion topic was regarding the monetization of iPhone games. Neil Young sees a real push to commoditization and pushing your game's price down to US$1. The App Store's Top 25 list is part of the reason why. The App Store ranks the Top 25 by unit sales, rather than retail sales. Games that cost more and the developers that make them are often left out of the exclusive list.
This presents some problems for developers of higher-end games and Andrew Lacy admits that it would be difficult for Tapulous to justify making a $1 game. In contrast, Keith Lee would like to see Booyah make free game and instead charge for in-game transactions. This latter idea has gained a lot of traction with developers and many see it as the wave of the future. Gamers will get hooked on the initial gameplay and then those who would like a fuller experience can purchase items and new features.
Marketing and advertising
Of course, pricing is only part of an overall business strategy that is currently in flux. The discussion turned from monetization to promotion and marketability of iPhone games. Over the past year, we've seen very successful iPhone games that were marketed through well-organized campaigns and those who benefited only from word-of-mouth promotion and become surprising hits.
"Trism" is just such a viral hit. Without the backing of a well organized PR campaign or a major publisher's backing, Trism was a run-away hit since its release in 2007 -- originally for "jailbroken" iPhones.
Steve Demeter, CEO of Demiforce and developer of Trism, epitomizes the independent developer. With a small staff and very little investment, his game stood toe to toe with the big boys and won. Steve believes a games' success is in part tied to its simplicity. He was able to explain his game to customers in ten seconds, and he feels that's a good yardstick to judge the marketability of a game. The game got its start simply by telling friends, and from that Trism just took off.
Keith Lee and Neil Young believe that Trism's story is more an exception to the rule than a good guideline itself. Counting on your game going viral isn't the best business strategy.
"You have to use every avenue to promote your product," explained Keith Lee of Booyah. This includes conventional promotion methods -- a scheme Macworld's Peter Cohen has in the past.
Neil Young analogized the App Store format to having a large retail store like Walmart in your pocket. "... And then having a truck dump two hundred products on their doorstop every day to sort through."
Young's point is simple: customers have a lot of choices to sort through, and getting your product noticed is tough.
"We do PR activity before a game launches and we do cross promotion in our games. We also talk to influential customers ... having a profile or history with a customer helps. Publishers make the games the best that they can," explained Young.
Young believes that developers should build up relationships with publishers and though the role of publishers is different with iPhone applications, the goal is the same -- to get games in front of people.
An open field for competition
While companies like ngmoco, , and Playfish are big names in iPhone game development, many at the conference asked why traditional gaming houses like Electronic Arts were not developing more for the iPhone. Opinions differed on the subject, with some suggesting that with the iPhone's vast potential big-name developers would be insane to not start developing. Keith Lee, who used to work at Blizzard Entertainment (developers of the iconic Warcraft series of games), took a different approach.
Lee believes that big developers need to focus on their breadwinners, the high-end and high-selling games that have traditionally been successes for them. Essentially, they want to keep their talent pool focusing on churning out more of what the public has traditionally demanded rather than branching out to a new platform. But Lee admitted that the iPhone might achieve 100 million units sold within the next year, making the potential for the platform quite staggering indeed.
One topic that everyone seemed to agree on is the vast potential for the iPhone gaming platform. Neil Young compared the iPhone platform to one of its rivals, the Nintendo DS. Instead of acting like Nintendo and restricting what can be put on the platform, Young explained that Apple has created tools and a marketplace for developers.
Young strongly prefers Apple's approach to gaming over Nintendo's. He contends that over the last year the iPhone has developed an amazing marketplace unlike anything seen before and next year will only lead to bigger and better things.
"Apple has the put the power in people's hands," explained Steve Demeter. Independent developers like Demiforce can achieve success in this market and with Apple's software it's very easy to develop new games. "With the release of 3.0 software, you'll get new possibilities and the iPhone is going to reinvent itself."
After the discussion panel, smaller discussion groups and presentations tried to predict just where the iPhone will go next, and what new games will harness the iPhone's unique controls and capabilities.
Sebastian de Halleux of Playfish sees the future of the iPhone in social gaming. Unlike the Nintendo DS or other gaming platforms, the iPhone can tap into a person's social graph. The future, he believes is to design games for social interaction. The act of playing a game generates different emotions depending on the genre. In the future developers will need to start addressing social emotions and connect social friends to the game.
"Social networking is the next gaming experience. This is what separates the iPhone," said de Halleux.
Clearly, the iPhone game industry is still maturing and progressing. When big-name publishers and small creative minds can co-exist and be successful, the clear winner is the consumer. With so many options in the App Store and an excited community behind it, the iPhone gaming platform has a great future.
Check back here next week for coverage of the Game Developer Conference.