The Latest News on the Social Games Market in Europe and Emerging Markets


Interview with Johan Peitz of Icy Tower Developer Muskedunder

By Sebastian Sujka

Muskedunder is one of the leading European social game developers.  Their first hit game Icy Tower is a social version of a popular ten year old game which the Swedish developers brought to Facebook in September 2009. Within a couple of months Icy Tower had over 1.5 million monthly active users and 200.000 daily active users. Now they are planning new games and the expansion to other social networks. In our interview we talked to Muskedunder’s Director of Social Games Johan Peitz about problems during the launch and success factors like in-game features and distribution channels.

SocialGamesObserver: Icy Tower was an overnight success, which problems did you face during the launch?

Johan Peitz, Director of Social Games at Muskedunder

Johan Peitz: Our biggest issue when we started growing for real was the capacity of the servers. The game grew faster then we could handle and would constantly hit the performance roof faster than we could improve the backend. This lead to constant frustration and a lot of “quick fixes” that eventually would not work properly anyway. After having grown out of a couple of servers of increasing size we eventually settled with Amazon’s EC2 services. Then the game also had a number of early issues which arose from us not quite knowing how to utilize the Facebook platform which stopped some players from playing the game. These were however minor problems that could be fixed and disposed of fairly quick.

SocialGamesObserver: What are the most important competitive features in the game?

Johan Peitz: Since it is a game about beating your friends’ scores, the competitiveness revolves around knowing how good your friends actually are. In Icy Tower we try to show the player how tough the competition is as often as possible. First off is showing your friends’ results inside the actual gameplay. When players ascend the tower they will see their friends’ avatars positioned at their best results. As soon as they pass (or not pass) they will know that they were better (or worse). This is combination with weekly resets of the top lists keeps the competition fresh and engaging.

SocialGamesObserver: Icy Tower was successful a long time before it came to Facebook. Why did you adapt gameplay to be more forgiving?

Johan Peitz: We wanted to lower the barrier of entry and reach a broader market. A lot of casual players aren’t interested in the kind of humiliation playing a new game often brings along. If we could minimize that we hoped to have more players stick to the game. That said, even if the game is more forgiving it is still as challenging as ever for experienced players.

SocialGamesObserver: Individual avatar creation can increase user retention. The avatars in the wardrobe are breathing , what other features did you install to bond users to their characters?

Johan Peitz: The characters do these little animations every now and then to look alive. For instance, in the wardrobe when you try something on, the character responds with an appropriate animation. Try out a new pair of shoes and the character will lift her leg and look down on the new item. We also diversified the clothing items so that players should be able to express themselves with different styles. As we localized the game we also added nationally themed clothing items that allowed players to identify with their characters even more. Since players also see their friends’ avatars when they play and recognize them as their friends, they also make the connection that they are seen by their friends every time they play. This adds an additional layer of bonding. Finally, we choose to as often as possible display players’ characters in combination with their profile pictures, further reinforcing the identification.

SocialGamesObserver: Which distribution channels did you use to promote Icy tower?

Johan Peitz: With Icy Tower being around for so long we had quite an arsenal of promotion tools at our disposal. We started off by (more…)


European Experts on Kwedit: Risks and Benefits

By Sebastian Sujka

Kwedit’s business model raised a lot of controversy. When Kwedit launched this February TechCrunch brand marked it “the first completely unreliable payment network“. Kwedit is an innovative payment method for social games that allows users to get their virtual goods immediately if they promise to pay for it later. The user must promise to repay the amount at a local 7-Eleven store or to mail the cash in.  However, the promise is not enforceable. If a user does not repay the money as promised his “Kwedit score” will fall. When the score is very low the user will be simply blocked for the service until he restores his Kwedit score to by repaying. Another option Kwedit offers it to “pass the duck” where the user can ask friends or relatives to pay the amount for them. Again, the person asked has the right to refuse the payment.

When Kwedit launched it was absolutely uncertain how many users will repay. In March the repayment rate was 26% and 33% in May. According to Kwedit the rate will keep increasing because users who do not repay are removed and paying users are kept. Revenue increase for publishers is reported to be 5%. We talked to Ingo Lippert, CEO of MindMatics, German provider of the international mobile payment platform mopay and Magnus Alm, CEO of Swedish social game developer Muskedunder about their views on Kwedit.

Ingo Lippert, CEO of MindMatics

SocialGamesObserver: The debate about Kwedit’s concept is still going on. Do you think the concept is marketable?

Ingo Lippert: Kwedit combines micropayments with credits. Since Paypal acquired BillMeLater micro credits are a trend topic. When Kwedit launched they partnered with over 100 social games and 7-Eleven but nobody knew if the concept would work. After a couple of months Kwedit gained some experience and had to readjust several times. These are indications that the concept is still not fully marketable.

Magnus Alm: It seems to have been fairly successful so far, according to Kwedit’s own reportings. In the long term it might be a valid extra source of revenue for developers who have an audience that is hard to monetize due to lack of credit cards. So yes, why should it not be marketable? I think that Kwedit is aiming for a niche that has the potential to expand a lot.

SGO: Kwedits main target group in the US are children. Would you expect the same targeting if Kwedit came to Europe or could the service be valuable for different target grousp?

Ingo Lippert: Predominantly, Kwedit works with cash payments. That is why children are clearly the main target group. However, I would even extend the target group from 10-20 years because cash is often the only payment option for this group.

Magnus Alm, CEO of Muskedunder

SGO: Does Kwedit make sense for the European market?

Ingo Lippert: Kwedit addresses a global phenomenon: kids borrow money from their parents, grandparents, aunties, uncles etc. The concept is certainly exercisable in Europe.

Magnus Alm: Certainly, the payment market in Europe is very fragmented and the Kwedit concept makes a good additional way of payment for younger users. Kwedit is going for a much smaller piece of the pie than the biggest payment providers, but that piece may grow fast if the large publishers start using their services.

SGO: What are Kwedit’s biggest advantages and risks?

Ingo Lippert: Kwedit’s biggest advantage from the user’s perspective is that the required amount for a transaction is instantly available. The convenient use of the service needs to be paid later in combination with a relatively inconvenient trip to the next 7-Eleven or to the post office. For the publishers there are significant disadvantages. The first figures show what has been expected before the launch: the missing willingness to repay the micro loan. Being banned from Kwedit does not seem to be sufficient to pressure users to repay. The consequence is a terribly low repayment rate. The second big disadvantage is the potential cannibalization of other payment methods. Customers who own credit cards or mobile phones can use Kwedit instead of other payment methods that would be more favorable for the publisher.

SGO: Would you consider Kwedit a threat for offer-based monetization platforms?

Magnus Alm: Not so much actually. I think that offers are a great way to monetize users if you have relevant offers. I would rather say that offers are a threat to Kwedit because they are trying to upgrade users from non-paying to paying and if there are offers that appeal to the users, I think they would rather take the offers than using Kwedit.

SGO: Do you think Kwedit can create new paying users for publishers?

Ingo Lippert: Yes, I am sure Kwedit has the potential to create more paying users. However, it is important to check who those new paying users are. Kwedit addresses players who have limited access to alternative payment methods. Those users are very young and possibly have a relatively bad payment behavior. Kwedit offers a channel to increase paying user rates but publishers should be aware of the potentially low repayment rate. Of course with the disadvantages mentioned previously.

Is Kwedit a payment solution that you would consider for your games?

Magnus Alm: We have only looked at it briefly, but the idea is interesting. We would prefer to see some more developers using it and learning about their experience before trying it out ourselves though.