Inside Social Games

When you get purchased by someone as huge as Electronic Arts (EA), there is definitely a bit of turmoil as everyone tries to understand how the two companies will co-exist and work together. One of the more interesting things we’re seeing is a decline in daily active users (DAU) across the top Playfish titles since the acquisition last week.

Although Pet Society is down only 2.4%, Restaurant City is down 6.8% and Country Story is down 10%. While Playfish COO Sebastien de Halleux noted that “EA gives us more resources to grow right now – more marketing budget to reach new users in new ways,” it doesn’t look like the initial push is to try to match Zynga’s aggressive advertising to grow the user base on Facebook.

Indeed, if you listened to the EA quarterly earnings call discussing the acquisition, EA management clearly saw the Playfish as a way to “open up doors to folks that aren’t console players” and upsell their IP. This manifested itself shortly after the announcement, with Playfish titles like Pet Society and Restaurant City running cross-promotions of EA’s Pogo.com casual game portal and the Sims 3 iPhone application.

While it is very possible that these cross promotions helped drive daily traffic away from Playfish titles, you also have to wonder if the Playfish team has cut back on some of its advertising so that it can begin to coordinate efforts with EA.

Pet Society Introducing More Game-Enhancing Virtual Items

Amidst the turmoil, the product teams at Playfish continue to roll out new features, the most interesting being a Nannybot in Pet Society. The Nannybot looks remarkably like Rosie the Robot from The Jetsons and allows the player to have the robot clean (via shower attachment), feed (popping toast via a toaster into your pet’s mouth), and play (tickling your pet with a giant feather) while they are not online.

To date, the majority of items in Pet Society have been vanity items, allowing the end-user to express themselves by dressing up their avatar or decorating their house. But there is a natural limit to the number of vanity items a user can use at one time – there’s typically only one avatar and only so many rooms in your house. Playfish has tried to address that, adding hangers and shelves so you can show off more of your clothing collection (launched September 12th) and launching the ability to add even more rooms to your Pet’s house (October 25th).

Another way to break through those limits is to focus on what I call game-enhancing items, designed to help the player achieve something or mitigate the grind in the game. While Playfish has had some game-enhancing items in the past (like fruit trees that grow food so you don’t have to constantly spend coins to buy items to beed your pet), it has recently been rolling out a steady stream of these items in its cash shop:

• Special fishing hat (September 28th), glove (October 5th) and vest (October 12th) that help you catch more rare fish, and
• Pro shoes (November 2nd) to help you avoid slipping on the ubiquitous banana peels in Stadium races
• Pro vest (November 9th) to help you better jump the hurdles in Stadium races

The Nannybot is the most recent addition and works very similar to the tractors and other farm equipment in FarmVille – the equipment or nannybot is nominally expensive, but you have to pay real cash for additional fuel for the farm equipment or batteries for the Nannybot. The Nannybot batteries last three days, long enough for someone to escape for a long holiday weekend and not worry about their pet.

Clearly Playfish is focusing on figuring out how to extract more value from their strong relationships with users. To illustrate that point, John Earner, the company’s vice president of product, recently noted that 50% of the users that have installed the Pet Society application since launch are still active in a given month. And while so far the EA acquisition hasn’t jump-started an acquisition campaign — Playfish has repeatedly stated their strategy is to run a marathon while competitors are focusing on sprinting for market share — the focus on virtual items that enhance the user experience could have an equally positive impact on the bottom line.

Eric von Coelln was the vice president of marketing at Oberon Media, a leading multi-platform casual games company, and most recently the vice president of Marketing at PowerSoccer.com. He is now a New York based freelance consultant to games, e-commerce and social media companies — including some of the largest social gaming companies on Facebook. While Mr. von Coelln does write about some companies for which he has done paid consulting from time to time, this post is based on publicly available information and in our view is an unbiased analysis of the industry. You can find his blog here.