Investors look for the “Holy Grail” of casual gaming is an interesting article over at Ars Technica, about a talk at the Casual Games Association’s conference last week, given by a managing director at an investment bank. Basically, he outlines the key things that investors are looking for in the space:
- diverse portfolio, but not mere aggregators: “companies that offer game portals, in-game advertising, and casual MMOs”
- not hardcore: “lasting appeal and a strong casual base along with a strong monetization potential”
- ad-friendly: “in-game and on-site with banners”
- Web 2.0-ish: “user-created content, and a simplicity of design that allows making and inviting friends a painless process”
Why the interest? Because it looks like these are games that draw recurring revenue from mass audiences, as opposed to drawing recurring revenue from hardcore audiences or no revenue from mass audiences. And costs are low. He specifically says that the Holy Grail is not World of Warcraft, because it’s too small and based on subscriptions.
Heydon’s slides are available here (PDF). One slide claims that in 2007 there were over $135m raised for this sort of project, and he lists some of the ones that raised the most money. Even scarier, he projects almost a half a billion dollars in acquisitions happening in 2007. Yikes.
So what’s the Holy Grail in his opinion?
MySpace + YouTube + Maple Story + Skype + Habbo Hotel = 100 million users.