[Editor's note: Christian Arno, founder of translations services company Lingo24, shares his perspective, below, on the different facets of localizing a game around the world. He gives special attention to issues social game developers should be thinking about.]

Japan was always at the forefront of the console and computer gaming industry, with the likes of Nintendo and Sega having their main headquarters in Kyoto and Tokyo respectively.

But with the popularity of computer games growing exponentially over the past couple of decades, there has been a slight shift away from the Japan-centric video game industry, with many of the top publishers and developers now based across the world – such as EA (US) and Rockstar North (UK).

Many of the top video game companies use the services of dedicated localization specialists, who not only arrange for the translation and interpretation of the text and dialogue, but also help them to consider the subtler aspects of the gaming experience: the characters, the story, culture-specific points of reference – key aspects of a computer gaming experience that have often been more of an after-thought in the past.

Layers of simplicity: keep text and graphics separate

When developing a computer game, many of the design aspects can be planned with one eye on adapting the game at a later stage for international audiences.

Layers, for example, should be used to help keep text and artwork separate. The term ‘layers’, in this instance, does not carry the same meaning as it usually does in video game design, which is the various layers of the game, from its basic setting to its plot, core mechanics, meta mechanics, etc.

Rather, ‘layers’ in this instance refers to way the game is designed and programmed. As an example, a website designer might use CSS to design a site with different layers – the framework, text, graphics and images would consist of a series of different layers. This way if the designer needs to change an image or change the language of a piece of text, they need simply change one or two layers, rather than redesign the page from scratch.

As such, when programming and developing a game, it helps to keep this concept of layers in mind. Exactly how you would go about this will depend upon the development software you’re using, but keeping in mind that elements of the game may need to be slotted in and out, like a Rubik’s Cube, for various localized versions will save you time and money down the line.

Additionally, any vocals and voiceovers should be kept separate from the visual or musical elements, meaning that separate vocals can be recorded and included in the game with ease.

Space considerations

Some languages require less space than English to express a message. The word ‘information’, for example, needs only two characters in Japanese. The same is the case with many Asian languages. In contrast, European languages tend to be longer than English.

The specifics of how much more/less space one language needs over another is difficult to convey, given that there are 101 ways of saying something in many languages. However, it’s possible to give some general direction on which languages are typically longer/shorter than English.

Let’s start with the four main European languages: French, Italian, German and Spanish (FIGS).

French is generally longer than English by anything up to 20%, whilst Italian requires about 15% more space, German 20% and Spanish 25%. So whilst German has a reputation for being a particularly ‘long’ language, it is about the same as French when compared to English. And Arabic is typically about 25% longer than English. As a general rule, English is at the lower end of the language-length spectrum.

In terms of tongues requiring less space, Japanese and Chinese generally consume less room, but it really does vary quite a lot as the writing system is completely different to English.

From a game design perspective, this has massive implications. Dropdown lists, menus and other textual elements will require the necessary space to grow or shrink depending on the language, without worrying whether it will overlap a graphic or if it will in some way be displayed incorrectly.

In the design phase, enough space should be allowed for translated text, including any text-boxes for user-input, menus and buttons. Where feasible, try to avoid ‘static sizing’ and if some elements do require strings of a set size, include a comment to this effect so that translators know the limitations during the translation process.

Another point worth considering is that the layouts on many international keyboards differ, so this should be taken into account with hotkey mapping.

Cultural considerations

Culture plays a massive part in how someone perceives a computer game. In Japan, for example, games have a tendency to be rather linear, whereas in the US, UK and across Europe, games have gravitated towards a more ‘sandbox’ style of game.

Social games are typically ‘horizontal’ applications – in that many social games are the sort of games that everyone enjoys playing, from your friends to your mum to your boss. The ‘vertical’ industry in social gaming – i.e. games designed to appeal to a specific demographic – is still developing.

However, even with ‘horizontal’ social games, it’s important to take into account cultural considerations when undertaking the localization of a game. Zynga, which can lay claim to the two most popular social games on Facebook – FarmVille and CityVille – has recently localized both games for international audiences, and while CityVille has seen only localization for European languages, FarmVille has been localized for China, which involved rebuilding the game from the ground up.

This localization process involved taking into account cultural considerations including changing the color palette to be brighter and increasing the size of the farm plots, to appeal to Chinese aesthetics and cultural experience.

With a fairly innocuous game such as FarmVille, you can imagine that the cultural considerations in localization would have been fairly mild, but with a more controversial social game such as Mafia Wars, which involves such nefarious dealings as violence, swearing and drug dealing, the cultural considerations for localization would be significantly larger, especially for a country such as China, where the government has declared increased regulation of online games.

Beyond cultural considerations such as the appropriateness of references to sex, drugs and violence, however, you should also be careful of gestures/icons you use in your game, as meanings can vary across the globe. To illustrate this point, a ‘thumbs-up’ means ‘OK’ or ‘fine’ in the west. However, in other regions of the world a ‘thumbs-up’ hand gesture can be offensive.

Other considerations

So, it’s clear that app and game localization involves more than simply getting the language right. Other considerations include getting formats correct with dates, numbers, currencies, weights and measures.

Whilst the UK is technically metric, ‘miles’ and ‘pounds’ are still widely used and understood, so a US developer would probably be fine leaving such units of measurement in place. But when localizing for elsewhere in Europe then unit conversion would be necessary.

And if user input is required anywhere, then forms should be flexible enough to cater for subtle regional nuances, such as zip codes/post codes and address formats of a specific country or region.

With that in mind, it can be useful to plan well in advance. Even if you have no immediate intention of localizing a game for other markets, it may be worth thinking what countries you would like to target, and factor this into the original game/app design.

As a game developer, you probably won’t be able to cater for all cultural tastes, and it will often be too impractical or expensive to completely overhaul your game for other audiences – some games will simply be more successful in some countries than others. But thorough planning will help maximize the chances of cross-cultural success.

Going local: costs?

Of course, proper localization will probably cost you at least some money – how much depends on how much is required and how professional you want it.

If you’ve followed all the steps above and it’s literally just a case of localizing the text for other languages, then the charges will more or less be the translation costs. Again, these vary from language-to-language and by company, but here are some ball-park figures for translation – and always check that they include full project management costs:

· English to French, Italian, German and Spanish: $160-$275 per 1,000 words (depending on the type of text and the expertise required from the translator)
· English to: Danish, Dutch, Finnish, Icelandic, Japanese, Korean, Norwegian and Swedish: $190-$325 (same conditions as above)

Other languages are in a similar ballpark to the languages above and the price will vary depending on the exact language combination (e.g. translations between two unusual languages, one of which isn’t English, may cost a bit more).

In addition to the translation costs, there may be associated file-management and DTP costs attached, these are normally charged per-hour. Again, depending on the nature of the technical requirements, these could be anywhere between $75 and $150 per hour.

Christian Arno is the founder and Managing Director of global translations service Lingo24, specialists in website translation and creative localization. Launched in 2001, Lingo24 now has over 150 employees across three continents and clients in over sixty countries.

[Editor's note: This is a guest post by Brice Morrison, former CrowdStar designer and editor of The Game Prodigy, a new site for game designers.]

“No no, you don’t understand. Most players don’t even get to level 22. Most of them drop out before then. We need to release the feature earlier.”

“That’s not true! A lot of our players are at that level, which is why we need to focus on more gameplay at that stage.”

I can’t tell you how many design discussions I’ve been in during my career. Discussions over what players want, what is the best way to spend our engineering and art resources, and what the spirit of our game is. When working on consoles and retail PC titles, we only had only limited feedback available to make decisions. Playtests, surveys, and playing the game ourselves before it was on the shelf were really the only ways to back up claims. And once the discs were out the door, then it was all said and done.

With social games however, it is a much different world. On Facebook or MySpace, the launch of a game title is just the beginning. Today the amount of data that developers are able to mine and manipulate is massive. How many players are at each level today. How much money players spend on what items. How long they play, when they play, and what they all do when they’re playing. Whereas other platforms require developers to adopt a “set it and forget it” attitude towards their games, social games spew mountains of feedback to their developers from launch day, allowing them to tweak and improve their social games based on player behavior.

Developers who understand and know how to make use of this data will have incredible perception into the behavior of their players and a leg up over their competitors. Let’s look at some of the advantages that data mining can provide.

Better Researched Decisions

For years, “classically trained” game designers in the industry have relied on their gut instincts to make decisions as to what players want. Much of this was based on intuition, imagining that yes, of course players would enjoy attacking other spaceships more than building and upgrading their own. Or a whiteboard discussion revolving around how long an average session is – a few minutes, for an hour, or for hours at a time. Or maybe an argument about player’s play styles – do they prefer to level up in order to improve stats, or do they like to spend money on items?

In the past, discussions and arguments like this are usually resolved by whichever designer can make the best points and steer the conversation towards their personal conclusion. While this approach is often effective if the development team is a talented one, it is often faulty and can produce decisions that don’t reflect player’s actual behavior.

By being able to pull live data from a game, arguments like this can be resolved almost instantly. In the middle of a shouting match on whether or not players like to upgrade their buildings every time they log in, someone can say, “Hey, guys, I looked it up, and yes, actually players level 1-30 upgrade 4 buildings on average every time they log in.” Everyone nods their head, makes the decision, and moves on. Or in a heated discussion of whether or not players need to be given more money in the game, someone can say, “Hey everyone, here is a graph showing the amounts of soft currency that people have right now. You can see that actually, most players have three times too much.” Income is slashed, expensive items are put on the market, and the job is done.

Sometimes knowing a key stat is just what the doctor ordered. By filling in the blanks as to what players are actually doing (not just what it seems like they’re doing), developers can learn to back up their decisions with data.

Experimenting

One of the best capabilities of data and instant user feedback is the ability it gives social game designers to experiment. There are often many options for the next feature that could be implemented in a game, and the right choice as to which will lift DAU, increase monetization, or improve retention to the greatest degree is not always clear.

By being able to get feedback quickly, developers can see how players react and change, tweak, or can the feature in no time flat. Releasing a new upgrade system that will give an advantage to paying users? No problem, let’s try it out on a few, watch them, and see how it affects their games. Wondering whether the unicorn fountain would sell better as a constructable viral item or a Facebook Credit purchase? Do an A/B test and look at the results tomorrow. Designing an experiment, putting it out into the wild, and then looking at the results is the best way to rapidly develop a hit title.

Experimenting is especially important in social games, where many of the designs that are now standard in the industry didn’t even exist several years ago. As Facebook and other social platforms have exploded in popularity, new designs needed to be created, tested, and discarded in darwinian fashion in order for companies to succeed. Without being able to look at the numbers quickly and decide what is and isn’t working, it would have been unlikely that the industry would have matured as quickly as it has.

Optimizing Where It Counts

Few game platforms have the luxury of being able to tweak their game to perfection. Sometimes just a few simple tweaks, a few numbers changed, or a few tuning values moved is all it takes to go from an also-ran to a blockbuster hit. There are so many numbers in social games that it can be overwhelming: the amount of XP to get to level 5. The amount of daily income that players receive at level 3. The cost of the in-game car. The exchange rate of 200 coins to Facebook Credits. It can be intimidating to realize that setting those numbers to 120, 17, 700 and 10 could result in $100 in revenue, while setting them to 115, 12, 900 and 12 could result in 10x that amount for your company.

Luckily, by being able to tweak different numbers endlessly and monitor the results, social game developers are able to optimize the tuning of their game until it’s nearly perfect. If players are making too little money, then the developer can just tick up their income a bit and see the results. If players are going too slowly, then they can increase the XP given or give out a bonus to see the effects. Watching these metrics and measuring them against the lifetime value indicators for players is one of the primary uses of massive data.

While these are all wonderful advantages to being able to mine massive data from players in real time, there are also many dangerous pitfalls. Teams who are suddenly blessed with being able to look at their players activity in detail without the experience of how to handle it can run into trouble. Let’s look at some of the common missteps that data can cause for social game teams.

Data Paralysis

Data is great for helping social game developers to make optimizations. However, game development isn’t just about making small optimizations. Sometimes for games that are doing mediocre or downright poorly, what’s really needed is a large new feature, a fundamental design change, or a reboot that better captures the essence of the game.

For example, let’s say we know that players consistently log in to get money from their city buildings twice a day, but we also see that the city building gameplay is causing long term problems, such as players becoming fatigued, racking up huge amounts of currency, or dropping out. This puts us in a tough spot: the right thing to do is to remove the feature from the game and try something else. But then what if they just stop logging in altogether? We have the data, and the data is telling us that is a bad idea. The downside is clear; the upside is fuzzy.

Changes like this aren’t easily quantified. But if DAU or ARPU are dropping like a rock, then something needs to be done. In cases like these, dependency on data can lead to paralysis, with designers not knowing what to do either way. They are able to easily quantify the problem but not the solution.

In cases like these the remedy is to use other traditional tools of the game development trade. It’s important to have someone on the team with a strong vision, an understanding of what players want backed up by playtests, surveys, and focus groups, and the leadership capabilities to lead the team into unknown territory. By not being completely dependent on data to make decisions, experienced developers will understand that sometimes the numbers aren’t there to help make the decision, but a decision will still need to be made. Having a robust system beyond data for making the best decision can help keep the team going.

Vanity Metrics

In social games, there is such a thing as too much information. When the numbers are something that you care about, then everyone likes looking at a graph. Any graph. A graph showing how many cultural exchanges players lost versus the week before. A graph showing the trend of raspberries farmed on average by level 55 players. A graph that shows the percentage increase of 25+ day users who built a chop shop week over week.

Ok, that sounds interesting, but what can we do with that? Does any of that actually matter? Does knowing it actually increase our bottom line, our DAU, or our players’ lifetime value?

Graphs are pretty, they make you feel like you know something, and they give you a concrete number to hold onto, giving the impression that you know and understand your game very well. However, not all numbers, graphs, or tables are actionable. I like to call these “vanity metrics”. They’re cool to have, and developers are willing to spend enormous amounts of time mining, producing, and debating them, but they don’t provide truly useful action items.

A good test for whether something is a vanity metric is for developers to ask themselves this question: if this number was radically different, would we act any differently? If the answer is no, then the data is useless and focus should be shifted to more important matters.

Vanity metrics are dangerous for two reasons. One, by spending time analyzing data that is actually useless, it takes away from time that could be spent developing features or improving the business. Second, by constantly sinking time into numbers that don’t matter, teams may begin to lose faith in data all together, eventually missing out on the metrics that do matter.

So when going to mine massive amounts of data, teams need to make sure that they know what they would do with the data first. Drowning in numbers is no way to improve your decision making.

Another Tool in the Toolbelt

Being able to pull instant data from games is a wonderful tool for developers to have in their belts. Flying blind may have worked in the past, but today the bar is higher than ever before, and if a game is designed or tuned poorly, there are plenty of high-quality competitors to flee to, competitors who have studied player behavior and chiseled the experience for maximum enjoyment. It’s important to remember that massive data on player behavior is a supplement to good design practices, not a replacement. But when used well, data can give invaluable insights into a company’s players and game.

A game designer who has worked at EA and CrowdStar, Brice Morrison is the editor of game design website The Game Prodigy and has been with teams for major titles like The Sims 3, Happy Aquarium, and It Girl. You can find more resources on game design from Brice and other industry designers at http://thegameprodigy.com/.

[Editor's note: Brenda Brathwaite is a game designer with over 20 years of experience and credits on classic titles like Jagged Alliance and the Wizardry series. She is currently creative director at social game developer LOLapps, and a regular Inside Social Games contributor.]

Getting players to post to the viral channel is a challenge every game designer faces when he or she is making Facebook games. It’s known that players are most likely to post when they’ve just started a game, but what motivates returning players?

Four things:

• It helps me. There is a particular item or objective that is core to the progression of my game with which I need your help. Typically, the game allows you to buy your way out of the “Ask Friends For Help” option. But if I need your help to progress, rather than paying cash, I’ll probably post it.
• I know it helps you. It’s key here that it actually does help other players. I am likely to post something to my feed if it gives you something I would want for myself. I understand the item’s value and scarcity. It’s also important to consider that over the lifetime of a game as well as the curve of player progression, the value and scarcity of an object may change. What I care about in an early game may not mean anything to me later on. Does that mean the viral messages should change? Not always, but catering to player’s needs and a player’s perceived value is critical. I have seen messages in feeds which offer stuff I have absolutely no desire for. There is just no reason I would click. Other times, I am prompted to post a feed which will give my friends something that I know has no value. Likewise, I am not likely to post through.
• It helps us both. Parody though it may be, Cow Clicker suggests players post a message to their feed. Anyone who clicks on the viral message not only gets “mooney” with which they can buy “clicks” to add to their “click” total, but also gives the original poster “mooney” as well. It is an example of a mutually beneficial viral which trades in the only thing that matters in the game — “clicks”.
• Pride. I will post if I am actually proud of what I have achieved, be it a quest, an item or something else. Generally, I am proud of this because I want to show off the great thing that I have done. Recently, I posted that I’d leveled to 17 in a game, because it took me quite a while. When I finish building the epic chapel I am working on in another game, I can assure you I’ll post about that, too.

Does this mean we should only include virals which fit the above themes? No. What makes one player proud could make another feel frustrated at the conclusion. For instance, an epic quest to gather a lot of materials could challenge and excite one player but irritate another. Likewise, some players abhor all forms of feed messages, while others are happy to click through a wide variety of virals.

In fact, there is a whole class of player for whom “playing the feeds” has become a pleasant meta-game to the game it supports. Of course, we also don’t want to limit a player’s viral opportunities, particularly when our games depend on it, nor do we want to overdo it.

Ultimately, your only defense against subpar virals is playing your own game. Do you actually feel motivated to click your own viral message? If not, why do you think others will? Are you aware of the click through? Have you investigated the good ones vs. the lame ducks to understand what hooks they’re using? Are you watching your competitors like a hawk? Remember, though, that you are only one player in your game. Watch how others play, too, particularly if their play style is different than yours.

Analyzing your own play, feeling the hooks in the game and watching the results via metrics offers the best chance of creating compelling virals that players feel motivated to click through.

[Editor's note: Below, game veteran and industry thinker Tadhg Kelly shares his ruminations on the nature of social gaming mechanics, and similarities they have to that arcade classic, pinball.]

I once thought of social games as being very similar to slot machines, but I now think a better analogy is pinball. The art of great pinball is not the skill (which tends to put off more people than it attracts) but rather the rewards. While social games are clearly very different from pinball in many ways, the two share some surprising similarities.

Pinball Wizards

Great pinball navigates the middle ground between agency and luck by giving the player fast-paced activity (repeatedly hitting balls with bats and hoping for the best) that is rewarded with prizes, color and sound. The game has no overarching strategic elements beyond achieving sets of bonuses, and so it is very much a game of the moment. In the engagement hierarchy, pinball is an amusement for most players.

The main game dynamic is the warding off of gravity to achieve scores. Shooting the ball creates a variable loop with many possible reactions, some pleasing, some not. There are bonuses and multipliers to achieve, but there is also failure: Most pinball games have side chutes into which the ball can fall, which the player cannot prevent. Also, the space between the bats in the center is usually just a tiny bit wider than the diameter of the ball, also a source of unpreventable failure.

This means that pinball is a self-limiting activity for most players. When they insert their coins and shoot their balls, it is implicit that the activity will only last a few minutes before more coins are required. But the reward in those few minutes will be (if done well) exciting and engaging.

Social Sorcerers

Social games are sort of similar. They lack the need for physical skill, but what they have in common is the deliberate use of timed play, coupled with an easy but bright reward structure.

Successful social games serve activities, such as objects to collect, things to build, friends to visit, etc. All are delivered in what feels like a basic game, but the objective of the game design is not formal victories and big wins. Instead it is focused on small wins, things to do, little rewards to earn, and happy bonuses. The joy of these games is the endless colorful achievements, payoffs and unlocking more of the same.

Where social games differ from more traditional sim or role-playing games is a lack of overarching goals. There is creative appeal, but very little by way of interdependencies and complex effects to understand. Long term objectives and deep game-play are toned down on purpose, as with pinball, to create simple task/completion scenarios.

The result is that players visit little and often, performing a few tasks, collecting a few rewards, achieving some small goals and occasionally being awarded a level or a lucky item drop. A social game permits the player a certain quantity of energy or activity (which savvy players learn how to maximize) which means that the game is self-limiting. Somewhat like pinball really.

Why Pinball Is A Better Analogy

Playing a game on Facebook is like standing in an amusement arcade. Pinball is primarily available at arcades, and each pinball machine has to fight for its right to be seen and heard by being louder, more visual and more immediately fun than its competitors. Other people and games are constantly in your peripheral vision, and the sounds and distractions that they create drain your attention.

Just as there is no room for an absorbing game like The Legend of Zelda at the arcades, the environment of social games restricts their ability to be deep. What social game makers have realized is that Facebook is so loaded with distraction that deep gameplay is almost impossible to achieve. So the game you are playing has to keep things light, fast and fun because the rest of the player’s social graph is only a Notification Request away.

More serious games are better at achieving depth simply because they exist in full screen rather than browser windows. If I’m playing Starcraft 2, all I can see on my monitor is that game. It blanks out the rest of my desktop and browser, and so I am completely enclosed in the Starcraft universe. On the other hand, if I’m playing CityVille I might also have FarmVille, Twitter, Google Reader,Facebook and BBC iPlayer open on different tabs.

Distraction rules the Web, so about the best that social game makers can hope to achieve is the delivery of great amusement. Like pinball, the secret to social game design is thus to be quick and simple, obvious and unconcerned about grander ideals. Keeping things simple (to the point of lame) is a good fit for the Facebook platform because the rest of the world really is only a click away, and as humans we are notoriously bad at paying attention unless all distractions are removed.

Environment Matters

It’s important for any game designer to realize what environment he is working in, in order to avoid fooling himself. Like a pinball designer, you have to understand not only what the game that you are making is, but the environment in which it will sit.

There’s no point trying to build quest elements into family sports games on Kinect, for example, because the environment is fast-paced as the family members jostle to take their turns. By the same token, there’s little value in introducing artificial mini-games into single-player explorations that are intended to be played for 100 hours. They feel oddly out of place.

What pinball knows, and social games have learned, is that environment plays far more of a factor in how engaging a game can really be than we sometimes realize.

An Irish lead designer and producer living in London, Tadhg Kelly is the author of a challenging book about, as he describes it, “Reclaiming games as an art, craft and industry on its own terms” titled What Games Are. The blog for the book is whatgamesare.com. You can also follow his tweets on Twitter (@tiedtiger).

[Editor's note: Hussein Fazal is CEO of AdParlor, an ad management company for Facebook campaigns with social gaming clients including Ubisoft, PlayFirst and Five Minutes.]

One of the most frequent questions we are asked is ‘How much will it cost to acquire users for my Facebook game?’ The answer to this question depends on many factors.

A brand new casual game targeting both genders and all ages in Indonesia can pick up tens of thousands of users very quickly, for pennies per user. On the flip side, a poker application with a large existing user base and a laundry-list of permissions, targeting 40-year old American males, can pay several dollars per user. Important background information on the many factors that affect pricing is discussed in our longer white paper – this post instead examines an interesting sub-topic around user acquisition. We dig deep into the rising cost of user acquisition over the length of a campaign, and why this occurs.

On average, for every 100,000 users you attract to your application via Facebook Ads, you can expect your cost of user acquisition to increase by 10%. Before examining why this happens, we’ll first take a closer look at click-through rates (CTR) and how Facebook makes money on a cost-per-click ad campaign.

CTR and its value to Facebook

If you were to bid and be charged $1 per click with a CTR of 0.01%, you then have an effective cost per thousand users, or CPM, of $0.10 to Facebook. For every 1,000 times Facebook shows your ad, they are only making 10 cents.

If you can double that CTR to 0.02%, your ads will have the same value to Facebook, even if you’re paying only $0.50 per click. By increasing your CTR, your ads can be much more valuable to Facebook, allowing you to significantly drop your bid.

The screenshots below highlight a target market in the US and compare the suggested bid for a new ad versus a proven high CTR ad. In the case of the high CTR ad, we can get a fair amount of clicks even at $0.10!

Why does the cost of user acquisition increase over time?

Once we look at why the cost of user acquisition increases over time, you’ll understand why we started by examining CTR. But first, remember that user acquisition pricing and volume goals go hand-in-hand. For the same application, you may be able to acquire users for $0.30 or $3.00. For the purpose of this discussion, we’re going to assume that the daily volume desired stays consistent – while other factors need to be changed to sustain this volume.

Let’s say we build a brand new city-building game on Facebook application and decide to launch a Facebook Ads campaign. We have several good things going for us. There are a ton of users who are ‘low-hanging fruit’ which we can go after – the subset of hard core Facebook game players who are constantly looking for the hottest new game to play. We can also leverage interest targeting and go after players who are fans of other city-building games. The game and the creative in the ads are brand new, and hopefully spark interest in those users you’re targeting.

Given these favourable conditions, a click-through-rate (CTR) of 0.15% and a conversion rate (CVR) of 65% is very achievable. If you’re willing to pay $0.50 per user given these metrics, you should be able to bring in 15,000 users per day in the prime English speaking countries – US/CA/GB/AU. The question now is, how long can this last?

As you continue your advertising campaigns, a few things are happening. Users are starting to get tired of your ads, despite an attempt to keep refreshing new images and copy. More importantly, the most hard core game players are starting to dry up.

The market of active targetable users who are interested in other city games is starting to diminish, and in order to keep the volume of users up without increasing the rate, we must open up keyword targeting on the users. While these other keywords / interests also work well, the CTR will not be as high as when specifically targeting city-building games. Gradually there’s a drop in CTR across the campaign. (Click the image below for a higher resolution.)

From the anecdote above, we saw the effect a drop in CTR can have on the value of that ad to Facebook. On an aggregate level across our ads, we’re now getting fewer impressions for our same CPC bid. Additionally, the conversion rate (CVR), or the percent of users who end up clicking on allow and entering the game post-click, also begins to drop, having a direct effect on our cost of user acquisition.

As CTR and CVR gradually declines, and if we want to maintain a consistent volume of new users, we eventually have no choice but to increase the price we’re willing to pay per user. Our cost of user acquisition begins to rise roughly at the rate mentioned above – 10% for every 100,000 users we bring on.

Is this always the case?

Every application is different in terms of its appeal and the size of its target market – hence, the speed of its CTR and CVR erosion. With constant refreshing of creatives, an appealing application, and a commitment to finding the target markets that work on a granular level, it’s quite possible to fight off the rising cost of user acquisition. We’ve worked with applications that were able to drive half a million US users at $0.50 within a relatively short period of time, without having to increase the CPI rate. But even in these cases, the market forces eventually win, and in order to sustain volume CPI rates must be increased.

NOTE: Please join me on January 25th at Inside Social Apps for a lunchtime roundtable discussion “Purchasing Facebook Ads – user acquisition pricing & strategies” and provide your feedback on this article in person. Look forward to the open discussion.

[Editor's note: Brenda Brathwaite is a game designer with over 20 years of experience and credits on classic titles like Jagged Alliance and the Wizardry series. She is currently creative director at social game developer LOLapps.]

The most exclusive game on Facebook is also the most lucrative and intense: the game design of the games themselves. For designers in the space, particularly those from the traditional game industry, game design has become its own game, complete with a leaderboard.

“Every night at midnight, I check AppData,” says John Romero, a veteran video game designer, consultant and lead designer of Ravenwood Fair. The site has become a de facto leaderboard for many developers, backed up by weekly top games lists.

Imbued by a deep love of game play, many designers view social game design, and the competition it creates with other designers, as a real-time strategy game, complete with in-depth stats and armies composed of coders, artists, animators and product managers. Indeed, our ability to respond to the current state of the game — both the actual game on Facebook and the larger meta game of game design — is critical.

Don Daglow, another veteran game designer, watches the numbers like a general. “Social game design is unique,” he says, “because you get a score for every facet of your performance every day. It’s like SEO on speed. How many first-time players came back the next day after the latest tutorial tweaks? What’s our DAU? How is monetization changing since we adjusted item prices? Did the test players like the new gorilla suit costume? All of business is a game, but the social games business has 24-hour scoreboards on every corner.”

As much as we respond to the player behavior in our games, game designers also must respond to the other “players” in the meta game of design, too. If one player makes a move, invents a particularly clever tactic or introduces a new mechanic or theme, the other “players” respond accordingly by trying out the move themselves, watching their ARPU or doing recon behind enemy lines. The mass proliferation of games about farming, cooking, and running resorts serve as perfect examples.

The idea of game design as a game in itself first occurred to me in an active, front-of-the-brain kind of way when I was on stage at this year’s Game Developer’s Conference in San Francisco with fellow game designers Steve Meretzky, VP of game design at Playdom, Brian Reynolds, chief game designer at Zynga, and Noah Falstein, president of The Inspiracy. We were there to talk as video game veterans who had entered the social game space. As the room began to fill, we talked of the things we’ve talked of for the decades we’ve known one another, but there was something else there, too: a new gamestate between us.

Brian was the obvious current leader at Zynga, and every day, his numbers just kept rising. As we talked of the games we were working on, our numbers and, in a veiled way, our future plans, it quickly became apparent that our conversation had all the earmarks of hardcore board game players yapping about their current gamestate while keeping their next move carefully guarded. That we four actually do regularly play board games together made the comparison all the more obvious, amusing and interesting. “Finally, game design is a game,” I said to the audience. It was promptly tweeted and retweeted dozens of times.

Says Falstein, “I look at my design job partly as a social status issue with my fellow designers. I want to improve the best of their games’ features while adding my own innovations, thereby earning status points at our next board game party, as well as earning RMT equivalents for my client – and therefore, me too.” Meretzky even jokingly alluded to the resource management that happens behind closed doors. “I beg my co-workers for resources. After asking four or five times, I often have everything I need to complete a task!” The rush and instant feedback is particularly exciting for game designers entering the space after years in the traditional AAA console game industry.

“Good games have regular feedback loops and social game development has these in spades,” says John Passfield, creative director at 3 Blokes Studios. “The majority of time in traditional game development is spent building a game behind closed doors which is more like training for the Olympics. Whereas social game development puts you smack in the middle of a full season where you’re constantly adjusting your game by listening to your coach (product manager), watching the other team and playing to the fans. It’s about being in the moment, not preparing for the moment.”

That moment, that hour and that day, each allows for iteration and tweaking of the meta-game state and a hopeful resultant climb in DAU. Quick to compare it to his own game, Reynolds said, “Every week I  harvest my features and plant some more, and then we run around collecting all the doobers!”

From a game designer’s perspective, it is a wonderful, exciting time to be a “player” in the game of game design. The play space feels wide open, like a game of Civilization Revolution only a few minutes in, with lots of room to explore and many things to discover. Games are being made with small teams about unique topics for new audiences, and in many ways, say the game industry vets, it feels like 1981 again. It is good, too, that we remember 1983, the year of the North American video game crash, and can adjust our strategy accordingly.

[Editor's note: Vijay Chittoor is CEO of Mertado, a startup that offers real-world merchandise within social games. He was previously director of product management at Kosmix, and worked as a consultant for McKinsey.]

By all estimates, U.S. social gaming revenues are growing robustly and are expected to reach $1.25 billion by 2011. However, individual game developers still monetize an average of only one to three percent of their audience through virtual goods.

As a result, alternative monetization techniques have been developed for non-paying users — primarily advertisements and promotions linked to virtual currency (including offers, surveys, cross-promoting other apps, etc.). But these have historically come at the expense of reduced user engagement.

All of these traditional methods involve clicking on an ad or an offer to go to a third party website or app, taking users away from the game experience. The best offers have a conversion rate of around five percent, i.e. 95 percent of offer clicks take users away from the game without adding to revenues.

How can game developers enhance their monetization beyond direct payments without losing their users? A few recent solutions have started bridging the gap between game engagement and monetization. These solutions not only keep the user within the game, but also add to engagement by speaking the language of the game:

• Branded virtual goods: McDonald’s recently sponsored Farmville’s first branded farm, which users could simply click to earn virtual currency. This provided instant gratification for the user, great branding for McDonald’s and, most importantly, a great new way for Farmville to engage and monetize its user base. A report by Viximo shows that branded virtual goods are currently a small fraction of game revenues, but projects the number will grow to $150 million in 2013. Not only do branded virtual goods attract 10 times the click-through rates of non-branded goods, they are also proven to increase brand awareness and purchase intent. Companies like Virtual Greats, Viximo and Playspan are starting to distribute these branded virtual goods inside games.  I see a couple of different forms of branded virtual goods today:

1.      Branded goods linked to real-world items: Some marketers are looking to drive sales through virtual goods, and to do so they often link the virtual good to the purchase of a real world item. In another deal, 7-Eleven partnered with Zynga to offer branded virtual goods that get unlocked after users make a purchase at a retail location.  Another example is Old Navy’s recent Black Friday integration with Crowdstar’s It-Girl.

2.      Branded goods linked to brand awareness: Other marketers are not looking for increased brand awareness instead of sales, and in this case, the branded good is not directly linked to any purchase. An example is the McDonald’s farm mentioned above, or Volvo’s campaign around the use of virtual goods to create a “naughty” branding for the newly launched S60.

• Videos: Branded video content, distributed through offerings like RockYou’s Deal of the Day, is another form of brand advertising that can be particularly effective in monetizing games. The key idea behind these is to deliver the ad message though a video that can be embedded within the game, instead of taking users to a landing page outside the game.
• Contests within a game: While one way of increasing monetization is to get more users to become direct paying customers, an attractive alternative is to get the current set of paying customers to engage and spend more. BringIt’s platform for running contests within a game aims to do precisely that, acting as an additional currency sink inside the game. The entire contest experience is delivered in-game, and the contests can even act as a hook to bring users back to the game.

It’s clear that this trend toward monetizing games without taking the user away from the experience will eventually be paramount in successful social game monetization strategies.

There are also a few newer, more experimental monetization techniques. At Mertado, we recently launched an Embedded Shopping unit that offers a new way for game developers to monetize through e-commerce inside the game. Game users are presented with an offer to earn virtual currency or goods if they purchase the deal of the day inside the game; before they buy, they can view a video about the deal, read product details and complete the transaction, all within the game.

The merchandise inside the embedded shops can be customized to the game to some extent; for instance, if your game is themed around baking, the merchandise selection may include products like a cupcake maker, or if the game appeals to a fashion conscious audience, the merchandise can revolve around apparel and accessories. Post purchase, the embedded shops can also suggest ideas for users to spend their freshly earned currency within the game.

In the future, I expect that we will see even more methods of monetization that add to the engagement within the game:

• Bundling of real and virtual goods:  Role-playing games and virtual worlds mirror many aspects of the real world, and that provides a great opportunity for marketing products that are contextually relevant to the game. In the future, I expect that we will see integrations where bundles of real and virtual goods are sold together to users: e.g., buy a real Wine Cooler to earn a virtual one in your game.
• Adding game context to offers: Today’s offer walls display the same offers to everyone. What if offers got unlocked only for players who have reached a certain level of game-play? For gamers this would be a great way to get recognition for higher levels of engagement. For brands and marketers, this would be a great way of connecting with a highly engaged audience and adding to the brand’s story.
• Users as brand ambassadors: Through the use of branded virtual goods, gamers would be in a position to act as brand ambassadors within their circle of friends. Games can reap rich rewards in engagement and monetization by enabling these interactions.

All of these methods will continue to make it easier for developers to create amazing gaming experiences that also monetize very well.  By adding these new options for monetization, developers can potentially expect to double the percentage of monetizing users.

A lot of this analysis has focused on the U.S. market, and I am curious to see how these trends play out internationally.  China is one of the biggest virtual goods markets, and it’s interesting to compare advertising spend in China to the amount of money spent on virtual goods. China’s online advertising market is estimated to be $3.7 billion, which is smaller than its virtual goods market at $5 billion. This is in stark contrast to the United States, where the virtual goods market is much smaller than the online advertising market size of $25.8 billion.

Because of this difference, direct methods of monetizing gaming users might continue to prevail in markets like China over methods that rely on brand advertising or direct response for real goods/services. I would be very interested to hear readers’ opinions on whether some of the new monetization trends emerging in the U.S. will become relevant in China and other international markets.

[Editor's note: Brenda Brathwaite is an accomplished game designer with credits on classic titles like Jagged Alliance and the Wizardry series. She is currently Creative Director at social game developer LOLapps. This post previously appeared on her blog, Applied Game Design.]

The player of a social game needs to feel closure.  The principle of closure is so important that without it, a game will struggle with low retention and all the problems inherent therein.

What is “closure?”

I will define closure as the ability to leave the game with a feeling of certainty that one has done all one can do and that things will be okay until one returns so long as the player abides by known rules. It’s all wrapped up — or knowingly left unwrapped (e.g. the player runs out of energy) — and the player perceives that she understands the complete game state.

In any Facebook game, closure exists if:

• I understand the primary grind of the game.
• I know when I need to come back to tend to the primary grind of the game.
• I know precisely what will happen if I fail to come back either because the game tells me what will happen or an implicit mental model exists.
• I know the things that can modify this stability (being whacked or assisted by another player, for instance).
• I have a means to protect my game state or enact revenge for things happening in my game which I perceive are beyond my control (and returning in time is within my control).

If players are unable to achieve a state of closure, they leave the game feeling confused at best or failed at worst. Typically, failure to achieve a state of closure results in players feeling uncertain in their decisions or uncomfortable with what they perceive will happen while they are away. Players who leave feeling something in this range are less likely, then, to come back. Why come back for more “confused” or “failed” or “uncomfortable”?

Closure is a tricky thing to identify, too, and it’s closely tied to a word I’ve used several times — perceive. The player’s perception of the game state is more important than the actual game state.

For instance, during the development of Ravenwood Fair, there were multiple times where I perceived the game state was doing something when, in fact, it wasn’t moving along those lines (though I am a designer on the game, I didn’t design the creature AI, so I was free to perceive whatever I wanted). The Fair is surrounded by a scary forest, so I felt uncomfortable leaving them there, fearing something would go very wrong. I needed to know they were safe while I was away, otherwise, I didn’t feel good leaving.

Interestingly enough, when I was assured my perceptions were false, it didn’t actually make me feel much better. My perceptions about the way I thought the game was working and my buy-in of the perception (and the mental model upon which it was based) were too strong. So, instead of saying, “Okay, cool”, I struggled with how I thought the game should behave and felt a strong need to see it rectified. It was an odd moment of dissonance for me, but the resultant design solution gave me closure. The “Protectors” system you see in the game today was designer John Romero’s effective solution to the problem.

It’s worth going into this a little deeper on two points:

1. It was a gendered problem.
2. It couldn’t be a gendered solution.

Not all problems of closure are gendered, meaning that one gender feels a much stronger need for something than the other, but this one clearly was. It was something that genuinely affected how I felt when I left the game (and therefore affected my likelihood to return to it). Researching the issue, I found it was a feeling shared by other female players, but the male players seemed completely unscathed by the issue. As its lead designer, Romero worked to fully understand the root of the problem, but his design solution needed to do more than solve my issue — it needed to be fun for all game players. Otherwise, it risked appearing like a Band-Aid on an otherwise tight system. For those interested in gendered issues in game design, I recommend Sheri Graner Ray’s Gender Inclusive Game Design.

So, closure.  In the social space where the player has absolutely zero investment, it’s critical. I must leave feeling that I know what happened, what will happen, and what role I am expected to play in it. I need to know (not merely feel) that everything has gone right. I need to know I have maxed my gameplay session. If I don’t understand your grind, the role of various components in the grind, or what my role is in some part of it, you’ve lost me (and some part of your DAU, too).

Closure allows players to comfortably leave the game with a plan, and that means they are much more likely to return.

[Editor's note: James Zhang is CEO of Concept Art House, a high-end art service provider based in San Francisco and Shanghai, China. CAH has done visual development work for top social and mobile game companies including Zynga, Crowdstar, Rockyou, Kabam, LOLapps, Openfeint, and Ngmoco.]

When asked if high quality art matters in social games, developers’ responses vary widely. To some, art is absolutely critical, while others treat it as an after-thought of game design.  To quantitatively answer such a subjective question, let’s look at some ways that high quality visuals might directly affect the success of a game.

• Increase retention on initial install: On average, over 50% of initial Facebook installs are lost after the first minute of gameplay, for one of three reasons:  the UI is too complicated, the game is not what the player expected, or the ‘intro’ experience wasn’t appealing enough. Art can drastically improve the last of these elements. Consider console games or movies, which often rely on a trailer or intro to bring the player into the story. A new book may need a great cover for an unfamiliar reader to pick it up. While art may not matter as much for players already engaged in a game, it is extremely important in converting new players.  As the saying in the comic book industry goes: The artwork sells the first book, the story sells the series.
• Better monetization: Virtual goods are, by nature, digital art assets. Vanity purchases for premium items that simply make your virtual farm/city/ville/kingdom more beautiful are often based on the aesthetic or ‘cuteness’ of the art asset alone, and more appeal equals more buys at higher prices. Additionally, if friendly competition is a draw for aggressively building your space, then the trophy “check out what I got” assets should look like something worth grinding or paying for. Therefore, high quality art not only command higher prices and more buys, it can also prolong the duration of gameplay.
• Competition is stiff: Social games are highly visual mediums. As competition increases in this industry, players have ever more options for where to spend their time and money. Having ‘better’ art than a competing game can mean the difference in winning a player over a competitor, especially when combined with the short attention spans of the casual gamer/web-surfer. On close examination, almost all top games on mobile and social platforms have cohesive, appealing art styles, even if graphics are not the primary reason for a product’s success in the market.

To examine further, we can look at what social games are heavily art dependent and which are not.

Puzzle Games

The value of art is not as high for a puzzle game, as it is for a resource management game (more on these below). For a Bejeweled-style game, the gameplay experience will be largely similar whether the moving assets are jewels, fruits, or beach balls. The experience is about the problem solving and accomplishment, not to dazzle neighbors or feed hungry customers.

The exception to this rule is a title like the Aurora Feint series, a puzzle game for which the developers took extra care to build up a background fantasy world with creatures and magic out of a dark fairy tale. The added screen size of the iPad also allows more creative graphic additions to the standard puzzle game.

Resource Management Games

Although a resource management game like Diner Dash is played by making good game decisions, the game is made compelling by Flo and her story. Here, the art quality needs to be good enough to engage the player in the game activity while still gently reminding him or her that Flo is a young woman trying to succeed as a young entrepreneur. While the developer may not need a full team of Disney animators to pull of these graphics, the visuals need to be strong, coherent, and reinforce a brand every time the game is fired up.

Text-Based RPGs

For text-based RPG titles such as Mafia Wars and Castle Age or illustration heavy games such as Kingdoms of Camelot, the art is extremely important.  Simply put, without the key illustrations to propel the experience forward, the player is left staring at a complex menu of text and numbers, with no game immersion or bad art as payoff.

Players look forward to being rewarded by banner art saying “here’s your new sports car,” after succeeding in a series of hard-fought battles. As with the resource management style of gaming, even if the player rarely looks at their avatar, the gritty style of the Mafia Wars title becomes the brand that gets reinforced through visual elements from the dark colors to the story panels of fast cars, tough mobsters, and seedy alleys.

In collaboration with 5th Planet Games, we released a text-based RPG game called Legacy of a Thousand Suns earlier this week. Our focus was to bring a cinematic, console quality experience into a Facebook game. In a sub-genre of Facebook games that’s focused on ‘do quest’ button clicking, we knew that artwork, storytelling, music, can make or break an otherwise monotonous experience.

Our process included multiple rounds of concept art, an opening cinematic, and an advanced UI system that was still simple to use. While it’s still early to say whether the high production value translates into MAUs and DAUs, the early fan and consumer reviews have been very vocal about how much they love the art.

Decoration Management Games

Despite fewer new releases in 2010, the largest market share of on Facebook still goes to decoration management games like FarmVille and Happy Aquarium. The monetization of virtual goods in these games can be dependent on how visually desirable an asset is. While some players only look at statistical benefits (earn more money, faster cool-downs), other players (such as my girlfriend) will buy anything cute or anything Unicorn. In the latter case, art drives monetization, whether through the number of items sold or the amount they’re sold for.

The successful games in this genre have done so with either stand-out visuals or by expanding to a variety of gameplay. Happy Element’s My Kingdom (above) adopted a bright and colorful 3D look which makes each building asset look like a collectable miniature toy.  LOLapps’ Ravenwood Fair (below) has received considerable praise for their look which is reminiscent of Arthur Rackham or Brian Froud’s fantasy illustrations.

These 2 games used quality artwork to distinguish their game from Zynga’s ‘ville’ series or Playdom’s pastel colored social city game titles. For games such as Crime City and Mall World, decoration is still a core motivator to raise levels in order to improve your ‘hoods’ or store. However, there are plenty of other things to do to keep you busy such as robbing record stores or buying a puppy.

Games that rely heavily on decorations as the key drivers in the game (such as Ravenwood Fair and My Kingdom), graphics become extremely important.  Where decorations are a supporting feature, the emphasis on premium visuals is less so.

Summary

Despite the above examples, great graphics remain a subjective factor for social game developers. To help further refine the argument that it is valuable, I consider three areas related to those discussed above: retaining initial installs of new players, better monetization of virtual goods, and extending game-play durations. These areas all play a large part in a games’ success or failure in an increasingly competitive market.  The question then becomes not whether high quality is important, but the level or value of that importance.

Average Facebook game development costs (excluding marketing) range from $200,000 to $400,000, with 20 to 35 percent dedicated to art and graphics. My own company has seen significant increases in overall art budgets as more companies seek production values on the level of console games. Comparing 2009 to 2010, this year we’re seeing more requests for game intros, fully painted ‘matte painting’ quality backgrounds, and long preproduction cycles for R&D, game style development, and character explorations. For 2011, I fully expect the trend to continue to ever-higher budgets and higher caliber art direction.

[Editor's note: Stewart Putney is CEO of Moblyng, a company that specializes in HTML5 development and publishing.]

Zynga’s recent acquisition of HTML5 game engine developer Dextrose AG could be viewed, on the surface, as just another purchase in a slew of buys they’ve made this year. In fact, it’s a clear statement that HTML5 is the future of social game development — particularly for mobile.

Why is this acquisition so important? With the capabilities of HTML5, developers will be able to create richer, higher-quality games that will engage existing users while bringing on new ones. Dextrose AG built a product called the Aves Engine — a scalable HTML5 engine for isometric-view games like Farmville or Café World. Using this engine, Zynga can extend their existing isometric games, or build new titles using HTML5. There are already multiple companies that use HTML5 apps for mobile. But with the potential addition of Zynga isometric titles, we may begin to see all major genres of social games developed in HTML5.

The advantage for developers in using HTML5 is the ability to leverage their code across multiple platforms. All major smartphone platforms support a different type of native code, but the one commonality is HTML5. The iPhone, Android, WebOS, Backberry 6.0, Bada and Nokia’s Symbian and Meego all support HTML5 apps. Even Windows Phone 7 will roll out support in the next year. As smartphones become the largest but also most fragmented market for games, developers must leverage technology that maximizes reach but minimizes cost — HTML5.

And allowing players to take their desktop games to mobile without compromising user experience is a game-changer. We’re talking about more apps, with richer features, on more platforms, ultimately resulting in more engagement and a significant increase in users. Of course, revenues will grow as well.

Right about now you may have some questions:

• Don’t native apps work better and use more features of the phone? Quite simply, no. All major smartphone platforms allow a developer to build native apps that include a browser instance. At Moblyng we build very thin native app layers that talk to the OS and also use a browser window inside the app. We then build the app in HTML5. The app can talk with the OS through the native layer for full access to OS features. Companies like PhoneGap and Appcelerator provide similar tools, and thousands of apps have been built using this architecture. Developers have the additional benefit of being able to deploy their app directly into the browser when the technology or business case requires it.

• What about performance? We (and our partners) have benchmarked our apps’ startup and response times against numerous social games and our games perform equal to, or better, than competitor’s products. Using tools like Canvas, CSS animations, local storage and web sockets, developers have all the tools they need to build great titles. HTML5 is mature enough that the main factor in game performance is the quality of the development team, not native vs. HTML5. Check out Playdom’s Sorority Life for Android, Moblyng’s Dungeon Quest and Rovio’s Angry Birds for WebOS and see for yourself.

• What can’t HTML5 do? Right now, HTML5 is not the best way to build “fast-twitch” 3D games like shooters and many high-fidelity driving games. These games do require a level of fidelity that will not be supported by HTML5, at least until WebGL matures. But as Zynga’s acquisition of Dextrose AG suggests, HTML5 is more than ready for social and casual games.

• What about Flash? While Flash is an option, the current reality is that Flash does not present the same cross-platform solution as HTML5. On iOS, support is still limited both for technology and business reasons. On Android and WebOS, there are well-documented issues with Flash performance and impact on battery life. Looking forward, as desktop browsers (read: IE9) move towards uniform support of HTML5, we expect to see HTML5 eclipse Flash on all platforms, as developers will be able to build truly cross-platforms games with incredible reach.

It’s important to remember that a huge component of a social game’s success is its reach. You can build the greatest game known to man, but if users don’t have easy access to it, it won’t be a hit. Making users install a Flash plug-in isn’t exactly easy access, and we all know how Flash performs on most mobile phones — it simply doesn’t.

With HTML5, developers can’t do everything just yet, but they have a browser-based technology that allows them to build great games that can reach hundreds of millions of users, with less time and cost. Zynga’s Dextrose AG acquisition is one more signal that developing games in HTML5 is truly a game-changer.