Why do most international casual games struggle in the US? It’s a particularly relevant question given the tremendous growth in the market today. PricewaterhouseCoopers recently predicted the worldwide market for online video games will be worth $14.4 billion by 2012, up from $6.6 billion last year. Large numbers of international publishers continue to enter the U.S. market with the goal of cashing in, but with few standout performers one has to ask, “what’s missing?” It’s a complicated question but I have a few answers.

1. Personnel
Typically those who understand and have the trust of international companies are foreign to North American culture, meaning they don't have a network of gaming/Internet industry veterans from which to hire. This means both managers and North American hires need to be trained to run an ever-evolving online entertainment business.

Most start-ups often make hiring mistakes, but in our business hiring the right people can be particularly challenging. As the mid-casual games business is relatively new in North America, it is difficult to find people with experience in or an understanding of the success drivers of online games combined with Internet B2C businesses.  Training people is also difficult if you have international management who need a cultural education when it comes to guiding a North American entertainment business.  After all, how do you define and deliver what's cool for a 13 year old vs. a 24 year old in North America if you don't have a feel for the culture?
These are just a few of the hurdles companies have to overcome as they build an engaging online gaming experience for millions of North American gamers.

2. North American gamer preferences and their familiarity with Free-to-Play online games

As gamers here are relatively new to the Free-to-play model, a big part of what we do every day involves educating players. Outspark games offer rich, immersive social experiences that are completely free to enjoy without any hidden fees or obligations. We’re all about customized entertainment—players enjoy the games on their terms with hundreds of exotic premium in-game items and new game features being released all the time. Millions of players are already enjoying Outspark’s new type of dynamic, personalized entertainment and thousands more join the community every day.

A large percentage of online gamers in North America are also much more casual than most online gamers in Asia. Because games like ours have been available in Asia for more than 10 years, Asian players know all the tips and tricks and are typically more goal-oriented (in MMORPGs, for example, they want to level up as quickly as possible). But while gamers in North America might take more time getting to know different areas of a game, they also typically want diverse gameplay sooner than many players in Asia. This seems to be true of European players too.

 3. Marketing

Although most would point out payment channels as the issue for not having World of Warcraft (WoW)-like success for casual or mid-casual games in the Free-to-Play market, I think when gamers are motivated, those issues don't seem to matter. But hits like WoW are very few and far between.

Like the movie industry—where you have few mega hits like Titanic—the game industry has only a few titles that achieve tremendous success. Game publishers must work hard to grow their user base to reach a sizable monthly revenue stream. But unlike movies, our online games have a long, fat tail. In fact, the first year is typically the most anemic as publishers and gamers work to improve the game to meet player demands. A game's 2nd and 3rd years tend to be the highest in terms of gross revenues. The following years depend on how you manage your focus to make sure a knock-off or next-generation title doesn't address all the shortcomings of your game. You reap what you sow!

Regarding marketing, it's something that requires immediate results. If you don't know how to quickly do things like find out where gamers are going for anime, where teens hang out, how to track down players interested in first person shooters or those who want a shopping game, your cost of acquisition could be prohibitively high. At Outspark we've maximized our marketing dollars to target relevant areas via various channels and community driven approaches, in so doing achieving one of the lowest user acquisition costs in the industry.  We’re flexible enough to reach the most valuable groups of users (due to geographic or other demographic targeting) without incurring significant additional marketing costs. This comes from a team with a great deal of both Internet portal marketing experience and game publishing experience that's constantly fine-tuned based on performance.  Otherwise, copious marketing dollars would have been wasted—as many international publishers have found.
Lastly are partnerships with top tier U.S. media companies and Internet portals. These folks are seeking partners with similar North American Internet and games market expertise to ensure best practices related to strategy and consumer offerings.

While it’s easy to layout what publishers may be missing, there are no blueprints for what makes one game succeed and another one fail. A lot of the reasons for success fall on the habits of the audience, and with market size growing it’s more important than ever to find quality and relevant titles to bring to them.  Just listening to your audience and giving them the tools to provide you feedback are invaluable, which we at Outspark, and other publishers, have taken seriously. Because in the end no matter the quality of the game without an audience playing it doesn’t matter, now does it?

Biography of Susan Choe
Prior to founding Outspark, Susan recently served as COO at NHN USA, where she led the US game market entry for Asia's flagship game portal, NHN/Hangame. As director of international operations she supported Yahoo's 25 international operations, as international director of Yahoo! Games, where she defined and implemented premium games growth strategy, and as director of Corporate Development, where she led investments and acquisitions efforts across games, communities and music.

Susan also spent seven years in financial services, working as global Corporate Development lead for CSFBDIRECT's online division, brokering partnerships in U.K., Japan and Hong Kong, Merrill Lynch's research group, and also on American Express' first online business management team.