Social Gaming Summit: User-Generated Games in Social Networks

I've been at the Social Gaming Summit all day, but my laptoppower cord stayed at the hotel. The panels have been pretty interesting (especially the one I moderated), though I haven't had the chance to sit and blog through an entire one yet. I couldn't make it through this entire panel before my battery died, but I did get most of the way in. Regardless, with so much talk around the subject of social networks, virtual worlds, and casual games, it's interesting to hear about how users are creating their own activities.

Daniel James, CEO from Three Rings, Jeremy Monroe Director of Business Development from Sulake in North America, Ted Rheingold, Founder of Dogster and Catser, and Cary Rosenzweig, CEO for IMVU, discussed their perspectives. That ranges from Habbos creating their own  pretend shops to IMVU's emphasis on user-created content--Rosenzweig says that almost 100% of its 1.6 million items are user-created, seeing its top ten developers raking in $100,000 over the last year--to Three Rings' Whirled, which encourages users to build their own games from the ground up.

The big question, of course, is how to monetize that content. In IMVU, said  Rosenzweig, creators "do what they do because it's cool, but they like making credits" by selling the items in world. That can then be cashed out through IMVU, which leads to 90% of its revenue, taking a cut while transfering IMVU credits to real world dollars. That user attitude is true of Dogster and Catster as well--users don't get a cut of the money generated by creating games around their items and boosting activity. They just enjoy creating and sharing. For Whirled, Three Rings is still experimenting with its business model for sharing and creating content.

It's becoming increasingly easier to get users to create content as well. IMVU keeps 2 members on its staff to teach users how to create models and create, but there's an increasing acceptance and interest in amateur creation as well. James points out that when he was a child, the first thing you did when you got a computer was to learn how to program. That tendency--and the idea that anyone could code--vanished for a time, but with more and more social applications like Facebook promoting user-created content, the DIY attitude is returning.

When asked if there's an ideal age for creation, Rheingold pointed to an older user base, though it leads to younger users elsewhere. In IMVU,   Rosenzweig pointed to an emerging group that peaks in the late teens, learning how to use some content creation tools for the first time all the way through an older audience that is learning in the same way.

At the far end of success, what does user-created content and user-created games mean? What would it take to overrun the games industry, asked moderator Dean Takahashi.

"Lots and lots of players," said James. "Is it going to disrupt the games industry? Yes I think it will. But it's sort of like asking if YouTube will make movies go away. It's a better question, I think, to ask if you YouTube and its game successors will be a bigger phenomenon than the traditional games industry in terms of users and monetization. That's the area I think is interesting."

Comments

[Cary Rosenzweig]

Thank you for writing about IMVU at the Social Gaming Summit. Please allow me to clarify one comment regarding IMVU revenue. IMVU earns almost all its revenue from its members by selling IMVU credits. Members use those credits to buy virtual goods from IMVU's catalog. Since the items in the catalog are 99.9% user-generated, our user/developers (called "content creators") get credits in exchange for selling the digital items. Once in possession of these credits, they have a choice about what to do with the credits. Many content creators simply use the credits to purchase items in the online catalog (the world's largest for 3D items) for themselves. Others trade these credits to IMVU members for real money. We support this activity, though we have no control over the terms (i.e., price) of the trade.

[Joey Seiler]

Gotcha. Thanks very much for the clarification, Cary.