Virtual Worlds News Interview: GoPets' Erik Bethke and Erin Hoffman

Last week we spoke to Areae President Raph Koster about his plans for Metaplace, the difference (or lack thereof) between virtual worlds and MMOGs, and his take on microtransactions. After watching him on a panel with GoPets CEO Erik Bethke, both fervently arguing for non-subscription-based revenue streams, we thought it'd be nice to follow up with Bethke. We're lucky this time to present a twofer, an informal email Q&A with both Bethke and Erin Hoffman, who, according to Bethke,  "works on blurred areas between game design and online marketing and points in between at GoPets." Both share their take on virtual worlds growth, community, and casual online worlds. "We're a hybrid between a social networking service, an online games portal, and a virtual pet game," said Bethke. "We have all the features that a Facebook or a Myspace might have, but on top of that we're really the best virtual pet simulation on the market, because our pets are actually alive, responsive, mobile, and full of their own initiatives."

Virtual Worlds News: I'd like to talk about the Avatar Bill of Rights and why  you've decided to move in that direction.

Erik Bethke: As I said in my talk at Casual Connect, I really think that the  virtual world space is currently limited by its attitude toward user  rights. And I'm not alone in reaching that conclusion -- there's actually a virtual worlds bill of rights that predates my separate  theory. A lot of what we're doing with GoPets is looking forward into  the future of technology and how people interact online, and this is  another big step in that direction, really just being realistic about  what's happened in the past and what people naturally do when they become invested in a space, whether that's virtual or physical. If we can be aware of those desires and user motivations, we can do better business and make people happier at the same time.

VWN: You've been an outspoken proponent of real-money transactions. Based on your conversation from the AGDC, could you explain why?

Erin Hoffman: This year at GDC I talked to a roundtable of developers about item-based transactions and specifically real-money transactions. The item-based economy roundtables are always full to overflowing, but almost all the casual games groups were opposed to the idea of being realistic about currency with players. But I think in terms of a virtual world, and with women especially, being up front about real-life currency actually establishes trust with the player. Daniel James brought up a great point that iTunes is an item-based economy and deals in real-money transactions, yet is hugely popular, and you're still basically just getting ones and zeroes.

VWN: On a different note, could you talk about partnering with Windows Live Messenger. That's a really interesting way to look at distributing the virtual world, and I'd love to hear more about how users are taking to it.

EB: The users are really supportive and excited about this new  opportunity we have to reach a much wider audience. One of the best things about GoPets is the welcoming, friendly community that's grown up around the service, something that's been able to grow during our years of quiet development, and they're excited about making that community even bigger and more wide-reaching. Because we're a social network as well as a virtual pet service, the MSN partnership is a great fit, since users now chatting online via Messenger can get the visual reward of their own little piece of the virtual world, and their pet, which connects to the person they're chatting with.

VWN: What is unique about GoPets when it comes to offerings and value to your customers, advertisers and partners?

EB: We're a hybrid between a social networking service, an online games portal, and a virtual pet game . We have all the features that a Facebook or a Myspace might have, but on top of that we're really the best virtual pet simulation on the market, because our pets are actually alive, responsive, mobile, and full of their own initiatives. If you're looking at your online land in the game, and your pet gets tired, it's just going to curl up and go to sleep -- and if it gets bored, it's going to leave your space and go visit some other user, possibly introducing you to another user in the process. No other service offers something like this. It's really about freedom, and the natural next step to that is of course the virtual bill of rights.

VWN: Who are your customers? What sort of demographic are you drawing?

EB: The majority of our users are women ages 13-40, I'd say about 80%. But virtual worlds are a lot more comprehensive in demographic coverage than standard products are used to addressing, we're about to launch a new questing and achievement system that we think will play very well to male audiences.

VWN: Can you describe your business model and why you opted to go in that direction?

EB: The company started three years ago and really is just now entering a faster-paced business development phase, initiated with the Microsoft partnership and continuing into the future. Microsoft is calling GoPets a "virtual dog park", which is really pretty accurate for part of what we do -- and if you can imagine your virtual dog park not only getting you and your pet interacting with other owners and their pets, but in endless spaces created by those other owners and yourself, you'd have something close to what we're doing. Add to that our focus on online casual games and you've got a thriving virtual world with a unique angle on the casual market, through the pets. This is exciting for our customers and for us because it creates such a positive online space, which in turn is exciting for partners because it provides a platform for them to present their real-life goods in a context where players will actively desire them -- instead of just tolerating them like they do most advertising -- and integrate with the item-based
distribution.

VWN: How many active members do you have and how much time and money do they spend on average in world? 

EH: Right now we have over 750,000 users, and it's growing daily. The thing about the item-based economy space is that you get a wide spread of users, from people who spend $1200 across a summer to those that are spending $10 a month since our launch, and it comes and goes depending on the events going on in the service, or what's being launched. But in particular we have a very active customization community, and now a big and growing crafting and farming community, and we're focusing in on those fun things players like to do and looking to create more of them.

VWN: Where do you go from here? Can you reveal something about GoPets that's not too widely known?

EB: Most recently we've been putting a lot of energy and effort behind GoDance, which we sneak peeked at AnimeExpo 07. GoDance is a competitive multiplayer dancing game where you'll connect with other users over the internet and dance competitively using your pet avatars. We'll be rolling out a number of GoDance events and based on the response at AnimeExpo are very excited about how that's going to catch on. Crafting and farming has also been a big hit, and we've got more to roll out with those systems -- all towards the goal of having a completely player-driven economy. Where before you'd have to purchase food from a store to feed your pet, we're working to where players will create all the food in the game, which, in addition to feeding pets directly, will also factor into our other pet-based minigames, such as GoDance.

VWN: What do you see as the major applications customers are looking for in a virtual world?

EH: It depends on which of the online markets you're targeting, but generally, customers in the causal space want something that's visually and aurally rewarding, easy to learn, and a challenge to master, with rewards for achieving that mastery. They want a community where they can interact and play with other users, either cooperatively or competitively, and they want fresh content, usually in particular favorite categories -- board games, build-your-own-business games like Diner Dash 2, word games, or "physical" style games like basketball.

VWN: Which applications have you seen as successful, and what do you think will change with that in the future?

EB: I think that modern online users are really hungry for services that will give them credit and ownership for the things that they create. We've seen this big boom in online worlds, starting years ago with the first growth of the MMO side of the industry, and now we have a lot of people experienced with online game space -- it isn't a novelty anymore -- so there's a rise in services, like Second Life to start, that let them take an active role in actually creating these online environments and expressing themselves through them. I think in the future you're going to see that extended in the successful virtual spaces where users are given the right to keep what they buy, so that there's a feeling of persistence and investment.

VWN: Where are you seeing growth? Obviously Second Life is a leader, but what other platforms do you see as particularly viable?

EH: Second Life is definitely a phenomenon, but there are a lot of contenders now growing in the online space, and a lot of flow between virtual spaces as users find aspects of the community or service they're not interested in, or aspects of another community that they are interested in. One of the things we're trying to home in on with the virtual bill of rights is what would keep those users in one place, what would really make them feel ownership and investment in the world they're participating in building. In terms of access points, we'll soon have a game on the Nintendo DS, which operates more in the Club Penguin space of a safe online environment accessed via Nintendo Wifi Connection -- and we're working on mobile deployments as well.

EB: Obviously a lot of the buzz these days is around Club Penguin, with the recent Disney purchase, and it's an indicator that the virtual world market is expanding into other demographics. When you're talking about virtual worlds, World of Warcraft is still king, and then in the casual space you have PopCap, Real, and others still going strong.

VWN: Who do you see as the big players in the near future? What about the far future?

EB: I think we're just currently on the edge of the big wave that's taking casual gaming and virtual worlds into the mainstream. You see it with Nintendo targeting casual markets like crazy -- older players, the non-hardcore -- but there's really still a lot of untapped potential in the virtual world space, and soon there will be a lot of likely very similar products competing for that potential market space. It's a great time for a new independent, and I think the future offers a lot of opportunity to smaller growing developers, and certainly a bigger field for gamers of all kinds.

VWN: Are you seeing growth on the business side of things? What sort of companies are interested?

EB: We're seeing a lot of growth and a lot of interest, with new partnerships we'll be announcing very soon. With MSN having found us, and not vice versa, you can see the level of interest even from big players in the online space, and right now the toughest thing we're juggling is which of these great opportunities to follow up on.

VWN: What are the most important issues facing your customers right now?

EH: The MSN launch did impact the community, but they stepped right up and started helping out the new users. The great thing about a service like this is how much people want to help each other. Even though ultimately there's a very big entrepreneurial spirit -- because so many of them are online businesspeople selling goods and creating goods -- they realize that creating a bigger community is good for everyone. So there's this great spirit of generosity, because the thing you want to do most with digital property is share it.

VWN: What are the most important issues facing you? What keeps you up at night?

EB: It's a very exciting time in the life of the company and the service, so the big challenge is thinking about all of the possibilities - and yet stay on focus to deliver what really matters to our customers now - and how we can move to really innovate and do things no one else
has done before.

VWN: Where does the growth curve go from here? Is the surge of interest a spike? Will we see a plateau soon?

EB: Eventually it's got to plateau, it's just how business works, but I think right now we're still far away from that point. Games in general haven't stopped evolving, haven't really even slowed down, and you've got to see some of that slowdown before you can predict a plateau. Right now it's still up, up, and more up.