Interview: Lessons from Faketown

We reported yesterday that Faketown had closed due to bankruptcy and was now up for auction. With the current boom in youth-oriented virtual worlds, not all are going to make it. It looked like Faketown had a shot, though. The virtual world drew some praise when it launched in 2006, but that wasn't enough to ever get to a self-sustaining operational level. "We were never really able to get off the ground as a result of not getting appropriate funding," Bart Yeary, Co-Founder and Chief Creative Officer told Virtual Worlds News. "We’ve been at this for 8 years."

"Aside from all the dirt, we were targeting the demographic, primarily 16+, but the fact that we were kind of going off a demographic that might be interested in something a little more irreverent or risqué than a Habbo Hotel or Club Penguin, we weren’t able to monetize those seers as well as those sites just in terms of marketing to parents," explained Yeary. "A lot of what we were doing was pushing the boundaries in terms of user-created content and letting users define the rules for themselves."

Faketown started off with very broad rules and the developers didn't go back to add content filtering and similar tools until 6 months into the world. With the heavy emphasis on user-generated content, though, that called for someone to devote their attention, full-time to monitoring it. And running on Amazon S3, the company had gotten hosting costs down to a minimum of $1,500, but between salaries and hosting costs, Faketown just didn't have the money to keep going.

Faketown sold coins and, before closing, had just begun to work with Alloy to sell banner advertising, but reaching a critical mass for monetization was difficult. Last summer the virtual world was drawing  35,000 monthly uniques, many of whom were "graduates from Habbo" looking for something with more control. [Ironically, some of the community has now turned back to using privately run Habbo clones.]

Yeary is optimistic that if someone buys Faketown and can market it, the world could take off. If they could have advertised, things might have been different. They needed funding, which wasn't forthcoming.

"We had outstanding debts, though, and that really ate into our ability to make money," said Yeary. "A lot of that was tied to the inability to raise funds. We did the VC dance for a while and had two VCs come with term sheets. We spent a little too much time with that and it fell through due to a previous investor who kind of roadblocked that because he wasn’t willing to dilute his shares. He was, well, an irrational individual who wanted to call the shots and tried to force that position. VCs just didn’t like that.  If there’s a moral to the story, it’s be careful who your first investor is."

Beyond early investors, Yeary recommends that, as in all startups, developers be careful of who they work with. More specifically for the virtual worlds industry, he says, it's key to stay on at the forefront of the technology.

"[The virtual worlds industry] is still a place where technology really informs it," said Yeary. "I think we’re going to see a big influx of 3D worlds as Papervision really take holds. I think it’s important for artists to be ready for that as COLLADA becomes more prominent and we’re creating 3D spaces in Flash."

One other issue facing startups in the virtual worlds space--especially when targeting youth--is that it's the one place the industry has really taken off. That's great in terms of approaching the audience. It just also means there are already established virtual worlds--and heavyweights like Disney, Mattel, and Viacom have taken notice. Yeary says that may make it harder, but he still thinks there's more room for the independents.

"If the offering is unique enough, definitely," he said. "But, again, if you cant’t get the word out about it, even if it’s the best product in the world, well…. But building content around licensed IP or a brand is really the best way to build an audience and bring in people who have never experienced this. It’s a challenge to get people to think, ‘I’ll come and play in this virtual world that has all these connotations of geekiness.’ Well, it takes someone with a lot of balls to take a new property and idea and build a virtual world and try to get people to sign up. I think if you don’t have an affinity group, you have to make it incredibly accessible and interesting. That was our goal."

Anyone interested in taking over where Faketown left off can contact the trustee,  Timothy J. Yoo of Robinson, Diamant & Wolkowitz, APC, for more information.

As for the team behind Faketown, everyone is still independently involved as consultants or working on other projects in the online gaming and virtual world space. Yeary himself, along with several others from Faketown, is working on a stealth MMO.

"I’m optimistic that a new project will come along that’s just as inspiring," said Yeary, "but Faketown was my baby, and it’s sad to see it go."

Comments

[moucle]

:( i hope faketown runs again :( everyone misses it. :'(

[moucle]

:( i hope faketown runs again :( everyone misses it. :'(

[moucle]

If anyone is intrested in buying Faketown its worth it;). there are hunderds and thousands of People that PLAY. Everyone still calls it the Next Habbo ;). if anyone is intrested in any questions, post a comment, :)
-Jessica Kennedy

[Simon Newstead]

Thx, good interview and advice - wish these guys well in their next endeavor.

[Chris Evans]

Very enlightening interview.

My name is Chris Evans, I also head a small independent company that runs a browser-based virtual world called SocioTown.

Our game has only been live for about 4 months and we've shown some impressive revenue and growth compared to some of the highly funded virtual worlds. But we're definitely under the radar. We haven't gotten much press coverage at all.

If you don't have an established brand it is tough to break through the noise. So it's very important to monetize the traffic you do get. We've been successfully in having strong subscription retention and monetizing the subscriber base further with micro-transactions.

Investors and distribution partners like to see this and it's why things are starting to pick up for us.

I know I'm a little late in posting this, but good luck Bart in your future endeavors!

[Fresh Prince of FT]

How Much Does FT Cost Lolz I Love That Game!

[Dracolis]

Bring it back! It's too cool to not be online anymore.

[BaronAxis2009]

Faketown was my favorite place to go. Not even Habbo was as good as faketown. It definitely needs to be brought back.

[Caffienater]

If faketown ever opens back up i'll play it again.

I signed up the day after faketown 2.0 opened and kinda stopped playing as much when they started faketown club or whatever when i suggested they do it, expecting they would give it to me for free.

anyway.
aim is caffienarooni if u wanna contact me

[bananaman34]

I was bananaman34 one of the more well known fakers, i have a little insight. the reason they couldn't get enough people was not only the lack of things to do, but it was also the Players. remember the SPAM? "selling fake i.d's!" a lot of people got spammed and scammed. I prided myself in having every single Fake I.d including the Contest ones. when it closed i was deeply sorrowed. bananaman out.

[fliper]

please somebody buy FT!
i miss my newspaper(faketown photo's) cause i take pictures in FT

[Samantha]

When is faketown coming back!?

[bombkitten]

My faketown name was bombkitten. I have to say that when in comes to virtual reality faketown can simply not be out done. The user customization and, the simplistic nature of the game is just not obtained by any other game. I truly hope the creators of faketown make another mind-blowing effort at virtual reality.

[chelsey]

hey this winhechel again for any off mi peeps out their wanna contact me i have a habbo account friend search me mi name is lucyhellobabe :] kk bye oh p.s reopen faketown i comand u! or i will beat u wit a dirty sock!

[emily]

''fake town was my baby''

aw, it was everyone's baby too (:
my screenname was supergirlem, it's nice to see everyone stil google's faketown to check for updates. just proves how much we loved it (:

[Collussus]

http://fakertown.com

hum dee dum