Game Maker Stunted By Facebook Turns To Mobile

Audie Cornish talks with Peter Relan, CEO of social media gaming company CrowdStar. The social games company has stopped developing new games for Facebook and is making a strong push into the mobile gaming market.

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AUDIE CORNISH, HOST:

The dust still hasn't settled on the Facebook IPO, but people are already looking ahead to the next hurdle for the company: playing catch-up in the mobile universe. Facebook has been the big fish on the Web, but the mobile version is more limited. For instance, users can't play the same Facebook games they access on their home computer.

(SOUNDBITE OF GAME, "HAPPY AQUARIUM")

CORNISH: Like this one, called "Happy Aquarium," just the sort of virtual goods game that hooks players on colorful graphics and financial temptations as they pay real cash to keep their virtual pets happy.

The maker of this game, a company called CrowdStar, was once one of the biggest game makers for the social networking giant. But over time, it's seen its revenue from Facebook users shrink. And the company made waves when it recently announced it will no longer build new games for Facebook.

CrowdStar CEO Peter Relan told us they're looking to play in the much bigger ocean of the mobile market - with companies like Apple, Google's Android, and Facebook competitors in Asia.

PETER RELAN: The mobile market is just a very big market. Even if you think about just the Internet, today we have about 1 and a half billion users in the world that are connected to the Internet, using personal computers.

CORNISH: But 900 million of them are on Facebook. So I'm trying to figure out why a company like you would sort off - kind of move away from that.

RELAN: So the question is: How big is the mobile market, and how is Facebook going to participate in the mobile market? Because the mobile market, we believe - and I think Facebook believes - is closer to 6 billion people.

CORNISH: And that means CrowdStar will have to make a lot more games to compete.

RELAN: And that's a function of the users on mobile actually having a more "snacky" entertainment experience. If you're sitting in front of a PC, it's reasonable that you'll play a game for 20 or 30 minutes. Whereas if you're at Starbucks and you pull out your mobile phone, and you want to have a quick one-, two-minute session of gameplay, now it's a slightly different world.

And in that different world, you have more snacky entertainment, or more - what I would call short-session games. But you have to make more of those games because the games are consumed in a different way. But we also believe that the barrier to being a consumer of the games is much lower because of this model called free-to-play - which means that many of the games, you don't even have to pay 99 cents to actually get the game and play it, and enjoy it.

CORNISH: So, then, how do you make money?

RELAN: So in the free-to-play model, the idea is very much like a shopping mall. Do you - or anybody - pay to get into a store? You don't. You can go into a store; you can look at the clothing or the jewelry or the watches, or whatever it is; have fun, try things out, etc. And then when you have the impulse, when you feel this is the right thing, I want this, that's when you pay.

So gaming is actually becoming more like what everybody in the world is already used to - which is go in there, experience it. If you like it, there are things in these free-to-play games that you can buy.

CORNISH: So this is the whole world of virtual goods.

RELAN: Exactly. So we allow the consumer to choose the price point at which they want to pay for whatever psychological satisfaction they're going to get from this so-called virtual good. At the end of the day, in the world of future mobile, Internet-based consumer entertainment, videos, gaming, movies, music - these are all the choices that the consumer will have on the mobile device. And as long as the price points are low enough to lower the barrier for anybody to get that kind of entertainment, we think that's the Holy Grail in this industry - where anybody can play games.

CORNISH: Well, Peter Relan, thank you for talking with us.

RELAN: Thank you very much.

CORNISH: That's Peter Relan, CEO of game maker CrowdStar.

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