It’s easy to see why Seattle’s Big Fish Games is bullish on the streaming service it unveiled last week.
More than a year in development, the new Big Fish Unlimited offering gives players unlimited access to a catalog of casual video games on smartphones, tablets, traditional computers, and even some connected TVs.
And at $7.99 for an all-you-can-play monthly subscription, the service could deliver a healthy new stream of revenue for Big Fish, which is already growing and profitable after reporting more than $180 million in sales last year.
But there’s another big reason that Big Fish embraced a streaming service: international expansion.
Like other streaming game services, Big Fish Unlimited actually “plays” the game on a remote server. The player at the end of the line is seeing a streaming video of the on-screen action, and their connected device sends mouse clicks or finger swipes back to the cloud-based game.
That means there’s no code being sent down the line, just pictures—which also means that would-be pirates won’t have any way of cracking into the game and spreading it illegally.
That’s a major concern in overseas markets, particularly the huge markets in countries like China and Korea. At last week’s Casual Connect conference, the point was made several times: China is atop the markets for raw game downloads, but much farther down the ladder in terms of sales. Game developers can build a big audience in many parts of Asia, but they simply can’t get paid.
While Big Fish officials didn’t highlight the international piracy angle in their on-stage announcement of Big Fish Streaming at Casual Connect, the company made it clear that secure streaming for Korea and China in particular is a huge opportunity.
In an interview, founder and CEO Paul Thelen said Big Fish has been spending the last year localizing its games for the Chinese and Korean markets, and hopes to enter those countries in 2013 or 2014.
“Two of the four largest game markets in the world have always been off limits to us. That’s no longer true,” Thelen says. “We think it’s a massive opportunity. It’s a huge addressable market for us.”
Wanda Meloni, president of M2 Research, notes that Big Fish isn’t the first company to tackle a streaming service. Cloud gaming companies like OnLive and Gaikai (recently acquired by Sony) are in this arena, along with established players such as longtime brick-and-mortar retailer GameStop, which acquired streaming technology company Spawn Labs.
But there’s still plenty of territory left to explore within the streaming model. Thelen notes that Asian markets have been strong spots for genres such as social games, the type popularized in the U.S. by Facebook-based game makers such as Zynga.
The kind of casual games that Big Fish makes cover a much broader range, from puzzles and adventure titles to detective-style games where a player seeks out objects hidden in the landscape.
“Asia doesn’t have the type of content that we have on our service,” Thelen says. “There’s not a lot of casual games that are ported and localized to Chinese and Korean. This service allows us to enter those markets with zero piracy.”
Can it work? In digital media of all kinds, streaming has long been a favorite answer of producers and distributors who are looking to thwart illegal copying and sharing. And there is some evidence that it works—giving credence to the theory that many people (at least in the U.S.) want to get content legally, but are thwarted by retrograde distribution strategies from the big, incumbent media companies.
The other question is whether casual gamers will adopt the Netflix-like monthly subscription fee for unlimited use, which is the core of Big Fish Unlimited’s monetization strategy (some games will be available for free on a rotating basis to advertise the service).
Big Fish has traditionally made its money on the paid-download model popularized in the PC gaming heyday, but casual game publishers are increasingly looking to the “freemium” model in mobile and social games—giving away the game for free to get a huge user base, thereby capturing more of the still-rare players who will fork over money for extra powers and goodies to enhance their game.
Amazon’s experience as a nascent digital media distributor could offer some insights. In his own presentation at Casual Connect, Amazon Appstore director Aaron Rubenson said the company was finding good performance for magazine publishers who offered subscription pricing—high rates of renewal and low “churn” of customers opting out of the paid service.
“I would be excited to see that extended into other market segments that have not traditionally used subscriptions,” Rubenson told the crowd of game developers.
Big Fish already has experience with a subscription model through its Game Club program, a premium membership that gives customers credits toward free downloads and other goodies for $6.99 per month.
Big Fish has been using its cash to expand in many directions lately, including the purchase of social game studio Self Aware Games and additional moves into the freemium pricing model.
The new streaming service, however, looks like a relatively major bet for Big Fish. O’Brien told me the company has about 100 of its more than 550 worldwide employees dedicated to the effort.
“We had a choice,” he says. “We’ve got 2,500 games. Do we continue to port thousands of games to every platform? How do we reach new customers?”
“Streaming and cloud as distribution platforms will greatly assist the entire industry against piracy,” says Meloni, the industry analyst. “We still have a ways to go, but with more big players like Big Fish Games making it a major strategic focus, it is definitely a fantastic move for them.”
