“In the mobile gaming industry, consumer awareness lags behind technological advancements,” said Yuanzhe (Michael) Cai, Director, Broadband and Gaming, Parks Associates. “New 3D and multiplayer mobile games look great in demos, but casual games are where the money is and will be for the next few years.”
Here's the relevant table, take from their web version of the report
“This is more of a playpen than an office,” says Rob Small as he welcomes us into Miniclip’s headquarters. He’s not joking. The floor of the übertrendy Hoxton office is littered with games consoles, radio-controlled toys, Action Men figures and electric guitars. Taking pride of place in the middle of the office is a pool table.
Small is quick to explain these toys aren’t distractions: they’re market research. “Miniclip has one of the biggest ‘tween’ audiences in the world. If you want to think like a 12-year-old, you have to play like one.”
His dedication is paying off. Miniclip boasts 35 million users, and half of all broadband users in northern Europe have visited the site. “We pump out 100 terabytes a day, half the bandwidth of YouTube,” reveals Small.
The site isn’t exactly Web 2.0. It’s a games site: simple, easy-to-play, hard-to-master games. All the games are played through a browser – simply log on and you’re off. There’s something for everyone: shoot-’em-up fans play Commando and table tennis addicts fl ex their skills on the virtual table. There are more than 350 games, and you can play them all for free.
Small was fresh out of university when he founded the company with Tihan Presbie in 2001. The pair had seen the phenomenal growth in internet businesses and wanted a slice of the pie. The gaming angle presented itself when they stumbled across a nifty program called Macromedia Flash. Small was an avid gamer and saw the potential in creating online games with smaller file sizes that could be easily run through a browser.
The site launched with a bang: Miniclip’s first creation was a dancing game featuring George Bush as a 1970s-style disco dancer. Dancing Bush enabled gamers to put the US president through his paces to the title track from Saturday Night Fever. “I filmed Tihan dancing in the kitchen,” says Small, “opened the Teach Yourself to Code Flash manual at page one, and stuck on George Bush’s head.”
Gamers could choose the dance moves, from a jive boogie to the splits. Small and Presbie sent it to 4,000 users, family, friends, and a few folk who’d signed up to the site out of curiosity. The game spread like wildfire. Within two months, two million people had seen the clip, and Fox News was sniffing around to find out why a 24-year-old Englishman was making satirical games about the US president.
Miniclip primarily targets 10- to 18-year-olds. These tweens are an extremely valuable user-base, with the biggest spending power of any demographic – twice as much as 20- to 30-year-olds. Miniclip makes most of its revenue from advertisers, eager to tug on tweens’ purse strings – or rather, those of their parents.
Advertisers that want to target this audience have increasingly limited opportunities. Kids are spending less time watching TV and more time online, but sites such as MySpace and YouTube, stalwarts of tween traffic, pose a risky proposition for advertisers. A company promoting a new doll will not want the banner to appear next to Goth-babe’s MySpace “Page of Sin”, and certainly not beside footage of a car crash on YouTube.
There is a market squeeze, and Miniclip is doing the squeezing by providing advertising space next to consistently suitable content. And with gamers spending more time on every page while they try to better their high scores, kids are staring at the ads for longer.
Miniclip is a buzz-generator. The Pirates of the Caribbean: Dead Man’s Chest game was released on the site to coincide with its general release. The Chicken Little game had 16 million plays in three weeks. “What better time to connect with your target audience than when they’re having fun?” says Small.
From homepage takeovers to “advergames”, Miniclip has pulled out all the stops to help advertisers part with their cash, totting up a £12m turnover last year, with a profit margin of 32 per cent.
Embrace the pirates
Piracy doesn’t affect the site. Far from it: Small encourages sharing. The games are browser-based, so users can pinch the code for their own webpages or blogs. “We knew that people were going to take content from the site. They were taking music, films etc.
The upshot of this decision was that when users enjoyed a game, and decided to stick it on a webpage, their friends would see it and become Miniclip users themselves. Viral marketing strikes again â“ and Miniclip is a pioneer of this kind of content dissemination. “We were letting users distribute our content way before YouTube was allowing people to copy and paste the little embed code,” says Small. “There are now around 300,000 websites that use our content, from Tommy’s little homepage on Geocities through to FHM.”
Most of Miniclip’s gamers are regulars, coming back several times a month. The challenge, with more than 100 million visits a month, is to keep coming up with new games.
That’s why Small fills the office with kids’ toys; it helps the developers to empathise with their target audience. Miniclip releases a couple of games every week, and each is around three months in the making.
After a quick headcount and some elementary maths, it’s obvious that with 11 staff in the office, the numbers don’t tally. So who’s writing the games? “We only co-ordinate things from here. There’s a vast network of developers across the globe writing games for us, from small companies to bedroom coders,” says Small. “I’ve never met the majority of my employees face to face, we just communicate over instant messenger and I either buy the copyright or license the games from them. This is a modern way to do business.”
Tween rivalry
There are precious few contenders vying directly for supremacy of the tween. The likes of MSN and Yahoo!, with their dedicated gaming channels, pose more of a threat. But Small is disdainful. “Yahoo! and MSN have a large number of users in their games sections, or claim to, because they move users from various other channels on their sites. They are very large destination websites. The majority of traffic comes in to check their mail; the games products are cross-pollinated within that traffic.”
Bandwidth is a far bigger issue for the game boy. “It’s by far our biggest overhead,” Small says. Bandwidth constraints have plagued the company since its inception. “It’s so frustrating when you’ve got content on your website that people want to access, but they can’t. A lot of the hosting companies con you by promising unlimited bandwidth. What they actually mean is ‘you can use a bit of bandwidth but when it becomes too much, we’re going to shut the valve’. And that’s what they do.” To combat the problem, Miniclip now serves the website from two dedicated data centres, in Miami and Madrid, containing hundreds of servers.
Intriguingly, Miniclip is only scratching the surface here. Small forecasts growth from 35 million to 55 million users by December. Will Miniclip turn our youth into antisocial robots? “Rubbish!” says Small. “I think the games encourage more interaction. In fact, networking and gaming are gradually merging into one. Some of our users got together and organised a convention in Las Vegas not long ago. Kids in school talk about the games they’ve played. The games on Miniclip are casual, they’re not like World of Warcraft where people will sit for ten hours a day playing frantically.”
Plane sailing
Opportunities abound for the company. In fact, the sky’s the limit. Literally. “The games you get on planes are diabolical,” sniffs Small. “The system is a glorified PC under your seat. They cost millions of pounds to fit and they’re out of date within a few years. We’re hoping to have our games embedded into a handheld device that can be easily updated, Nintendo DS-style.”
Small has also been trying his hand at educational games. He’s been spurred on by the popularity of Anagramatic, an anagram-solving game. “Kids are playing our games anyway, so they might as well learn something at the same time.”
If Miniclip, already popular with pupils, gets further endorsement from teachers for its learning games, thousands more schools will catch the bug. “Once a kid in school sees the site, the next thing you know, the whole school’s playing on it. Our challenge is to attract that one kid.”
Since his dalliances with George Bush â“ Dancing Bush was swiftly followed by Bush Shoot-Out and Bush Aerobics â“ Small has hung up his coding manual to concentrate on running the company. Not that he is complaining: “This job is a boy’s dream. I have friends who are bankers, solicitors... they dread going into the office every day. Sunday-night blues is not something I’ve ever had â“ I look forward to Monday morning.”
His love for the company has made him skittish about outside investment â“ “I didn’t want investors dragging on our coat-tails asking us why we’re doing stuff” â“ and Miniclip is one of the few remaining top websites under private ownership.
It’s hard to imagine the polished, articulate Small at a loss about anything. He airs his opinions with conviction: there definitely won’t be another dotcom crash, conference addicts who gas on podiums about their companies generally protest too much. This is the attitude required to keep an online business going for six years â“ “we’re old hands in this industry” â“ especially when your target audience keeps growing up.
Small looks strangely ageless, as though his passion for games will keep him eternally young. His favourite is Golf Ace, but there’s little chance of practising his swing in real life â“ “I’m permanently strapped to my laptop”.
We take one last look at the gaming paradise and Small sends us on our way with his potted history of online trends: “A couple of years ago, it was the year of social networking. Last year, with the YouTube deal, it was the year of video.” No prizes for guessing the Big Woo for 2007: “It’s all about online gaming.”
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