Casual Games Get Serious

The $2.25 billion casual gaming industry is on the brink of explosive success. How can you join the game?

By Laura Tiffany

Opinions expressed by Entrepreneur contributors are their own.

Whether played online, downloaded to a gaming console or phone, or purchased for a handheld game system, casual games like Bejeweled, Zuma and Luxor are making their mark on the gaming industry. With rainbow-bright and fast-paced puzzles, word and arcade games, these games are keeping folks busy during lunch breaks, while waiting in interminable lines and after the little ones have fallen asleep.

This $2.25 billion industry is growing 20 percent each year, according to the Casual Games Association (CGA) 2007 Market Report. Each month, more than 200 million people play casual games online. And while "serious" gamers tend to be young men, casual gamers are more evenly split: 48.3 percent are male, and 51.3 percent are female. In fact, according to Craig Holland, founder of game publisher Freeze Tag and marketing director with the CGA, "Women account for 74 percent of the paying casual game players," meaning ladies are the ones who pony up the bucks for downloads.

John Vechey, Brian Fete and Jason Kapalka started PopCap--maker of the ubiquitous Bejeweled--back in 2000 after the trio quit their dotcom jobs. "We knew from our prior work in the space that there was an ever-growing market of people with computers who were interested in games," Kapalka says. "They just couldn't find any besides Solitaire and Minesweeper that they enjoyed in the game marketplace at that time." Over the past year, the Seattle-based company doubled its employees and been highly profitable without ever taking outside funding.

Kapalka says PopCap makes games for people who don't like games and since the field is so new, many potential customers haven't found games they like. "They see some violent game for Xbox and think, 'That's not for me,'" he says. "[But] if we can get a self-professed non-gamer to sit down in front of Bejeweled or Zuma or Peggle for 10 minutes, we can convert half of them right there."

The simplicity of casual games is an attractive quality; there's no steep learning curve and players can use devices they're already familiar with, rather than having to adapt to a new controller.

Dave Walls, who started his game production company Funkitron in 2001, says the try-before-you-buy aspect is also crucial for growth in the industry. "It made it really easy for [non-gamers] to get involved--to see the games, to try out the games," says Walls, who creates games based on licensed board game brands like Scrabble, Blokus and Boggle, as well as poker and trivia games. "People can play the game for an hour, make sure it works, make sure they have fun. And that just makes it easier for them to buy another one."

Keeping Score
The ways to make money in the casual games industry are as varied as the games themselves. Most of Walls' Funkitron sales come from computer downloads; his games are featured on distribution sites where there's a revenue share. He sometimes partners with companies to extend his reach into other platforms, like mobile downloads, without splitting his focus.

Both industry stalwarts and newcomers who don't have sites can attract download-hungry players by submitting their games to portal/distribution sites. "[Casual] games are very broad in their appeal and small in terms of file size... so it's relatively easy for portals to offer hundreds or thousands of casual games on their sites," Vechey says.

Getting into the top 10 of a large portal can be a path to success. "Get it on one site and prove that game; and then people will want it, [and] all the other sites will want it," Walls says. But he warns, "If you put out a game that people don't like, there's no amount of marketing, begging or pleading that's going to get that game on a site or sales."

PopCap, which distributes its own games and is also featured on sites like MSN Game Zone, initially made money through the try-before-you-buy download business model, but has since diversified its revenue stream to include online purchases, advertising, mobile units and OnDemand TV in thousands of hotel rooms. In addition, millions of copies of their games are sold at leading retail chains including Wal-Mart, Best Buy and Target.

Playing to Win
Competition is stiff these days. A few years ago, a game could be developed in just a few months. Now it may take six to 12 months. You're competing not just against the giants, but against indie designers like yourself.

"Innovate or don't bother," Holland advises. "There are lots of casual game developers in the world, and they don't make money. If you want to get into the business, then work hard to come up with something different, new and unusual."

The PopCap founders also suggest some ingenuity when it comes to your market. "Do your research and make sure you're finding a niche that hasn't been over-exploited already; unless you're really, really good, you're not likely to push the established developers and publishers out of their spots," Kapalka says.

Audience is also key. "Always know who the product is for," Walls says. "The casual space is a whole different world than the core gamer space. What works for a 17-year-old gamer doesn't work for the 32-year-old casual gamer."

Holland agrees. He says many game developers make the classic mistake of creating a game only they want to play. "Make sure you test your game with women [especially over 35], and listen to all of the feedback carefully," he advises.

He also suggests would-be game entrepreneurs to play many, many games. (Hey, it's research!) "The best way to learn how to create a great casual game is to play them," says Holland. "Analyze them. What did you like? What could have been done better?"

Also analyze yourself. Holland says games require two skill sets--programming and art--and few individuals have both. "If you're a programmer, then you need to find an artist. If you're an artist, you're going to have to find a programmer."

The Next Level
"In the next five years, there will be major changes to virtually every aspect of our industry sector," says PopCap's Fiete. These are signs that the industry is poised for growth. Major players like UbiSoft, EA and Activision are joining the market; MTV recently spent $600 million in game industry acquisitions. Threewave Software, the Canadian makers of first-person-shooter phenoms Quake III and Doom III, recently started a casual gaming division that focuses heavily on Facebook for casual game sales.

Even at the recent gaming convention DICE Summit, reported industry bigwigs noting this year as "the year of casual games."

For now, room still exists for new games and entrepreneurs. "It's still anybody's industry; nothing is written in stone," Fiete says. "Casual games as a market have a lot of room to grow, reaching new customers as well as reaching new and existing customers on an ever-increasing number of devices and platforms."

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