Justin Waldron and Michael Carter lay out a plan to unite the audiences of the big social platforms around the same multiplayer games
The rise of mobile gaming changed the industry in myriad ways. Among the lesser of those outcomes is its fetishisation of massive numbers.
In the space of a few years, the games business went from one where ten million players represented a rare level of success, to one where tens of millions of players was commonplace. Franchises like Outfit7's Talking Tom have racked up as many downloads as there are people in existence, and even console publishers are now more inclined to communicate success in terms of hours played and bullets fired than copies sold -- all the better for framing a hit in terms of hundreds of millions rather than a measly five or ten.
The press has become understandably wary of these vast numbers, and so it was with one eyebrow prominently arched that we greeted Playco, a startup announced alongside several extremely big numbers -- $100 million in Series A funding, at a $1 billion valuation, and a stated goal of creating the first game to be played by "billions" of people. For a company that has yet to reach its first birthday, it is a dizzying level of ambition. From the point of view of its investors, it is a tremendous display of trust.
At least some of that trust is down to its founding team. Justin Waldron, Takeshi Otsuka, Teddy Cross and Michael Carter have all held senior or executive positions at major games companies, with Waldron particularly notable for having been a co-founder of Zynga and its senior vice president of product. Indeed, in terms of how Playco aims to change the perspective on how popular games can be, there are similarities to the instant virality of early social titles like FarmVille and Words With Friends.
"People are connecting with their friends in many different ways, and they're looking for ways to deepen the connection"
"It's something we've been thinking about for a very long time," Waldron says of the company's founding team, who first met each other ten years ago. "There is a lot more availability of different ways to connect [now] than there have been in the past. People are connecting with their friends in many different ways, and they're looking for ways to deepen the connection they make on those networks. We see that as the opportunity."
The networks in question are the messaging and social apps a great many of the people in the world use every day -- WhatsApp, Snapchat, Instagram, TikTok, Facebook Messenger, on and on -- a few of which have shown rising levels of interest in how they can bring games to their audiences. Using a HTML5 engine acquired from Game Closure -- which was founded in 2011 by Michael Carter, who is now Playco's CEO -- the company's strategy is to make games that can run inside those applications, and in some cases allow their disparate audiences to play together.
If it works, Playco will answer the same questions that Waldron was asking even before he co-founded Zynga: "How do you get people together to play more simply, with less friction?"
"Mobile web technology had to get to the point where you could create an experience that would rival the quality that people expect from the native game experience on the App Store," Waldron says, adding that he and Carter laid out what had to change for a company like Playco to exist almost a decade ago.
"There's just the technical capability on the browser side to make that possible, and then there's the investment in creating a game engine using that browser technology -- which we had to build -- to enable that kind of experience. That has taken quite a while, in terms of the browser standards progressing, and to build up the expertise to create that kind of content."
Justin Waldron
Another vital development was to reach a point where multiple social platforms could healthily co-exist -- very different to the heyday of Facebook, when the emergence of smartphones effectively killed it as a gaming platform in the space of a few years. Today, there are multiple platforms that are as big as Facebook was back then, each satisfying different demographics, with varying levels of market penetration across geographies. It is a much healthier environment in which to build a gaming business.
"They all have different interests," Waldron continues. "Figuring out how to create this kind of platform, while also satisfying everybody's interests and aligning everybody is a separate problem that has taken some time to figure out. We've been able to make much more progress there."
While the company is reluctant to share precise details of its early products at this stage, it is clear about the problem they are being created to solve. As Carter explains, the idea of games attached to messaging apps is far from new, with companies like Kakao in Korea and Line in Japan building huge success around those products.
"From the technology side and the user experience side, it was not a very good experience," Carter says. "You'd get this invite, and then you'd be sent over to an app store, and maybe it wasn't working on iOS but it was working on Android -- or vice versa. You go through the install process, and maybe you have to connect to Wifi to download the size of that game. And then on the home screen you'd have to re-authenticate with Kakao... Then you go through permissions and find your friends.
"In the grand scheme of things, that's not an incredible amount of friction -- buying a PlayStation for $500 is a lot more friction than downloading an app -- but nevertheless, there's a lot of steps in there. But what if you put the game right inside of Kakao? You never leave; you just tap the message and play it. That removes so much friction. The kind of social play that can enable is pretty incredible.
"KakaoTalk was a precursor... a small tremor compared to what I think is actually possible"
"Kakao was a precursor. I don't know what they call a small earthquake before the earthquake, but it's a small tremor compared to what I think is actually possible."
A great deal of Playco's potential -- to reach that many players, and to justify that huge valuation -- rests on just how powerful removing that friction will be. According to Waldron, it is more about "cognitive load" on the part of the player than the ever increasing capability of mobile phone hardware. In simple terms, people don't need much encouragement to decide against moving from a social platform to a separate mobile app, and there is abundant data to back this up.
"It's a decision point, and in practice about 90% of people don't make it through that step," Waldron says. "It's much more substantial than you'd expect.
"It's one thing from a marketing funnel standpoint; it's a shame that you spend this money on advertising to someone who is excited, but when they get there has changed their mind -- that's not great. But if you're my friend and I want to play with you, and there's a greater than 50% chance you're not going to make it through that [step], how many times am I going to invite my friends before I just give up?
"This is what we've all experienced over the last decade, and why we've all given up trying to play with our friends in [mobile] games... It's a really meaningful barrier for most people."
Playco's games will all prioritise being, as Carter puts it, "frictionless, instant and social" over pushing pixels -- though Carter adds that setting new benchmarks in areas like visual and aural polish for HTML5 games is definitely a "secondary concern" rather than of no concern at all. That speaks to the abiding belief that Playco's unique strength will be in creating truly social games in a space where virtually every product is designed to be played alone, while interacting with strangers.
Michael Carter
"[Playing with friends] always ends up being a very, very optional feature in the game on mobile," Waldron continues. "What we're doing is more 'all-in' on this thinking. The games will be multiplayer by default, and by removing friction, we can really bet on the idea that the person will be able to play with their friends. That ripples through the entire design of the game, and what's possible. It enables interactions that would otherwise have to be hidden or just cut altogether.
"Taking that bet, making a game where you actually need to have your friends with you to play it... If you do that in the wrong place, you guarantee that your game is a failure. That's what makes us unique. We do that in every game."
The expected use case for Playco's products, then, is a group of friends interacting on whichever social or messaging app they prefer, choosing to play a game together, and being able to do so in an instant, with no obvious difference in quality to a native mobile app. Given the number of huge social platforms, the size of the audiences for each, and the potential for any one game to be played by users from all of those platforms at the same time, and that $100 million Series A investment starts to make a lot more sense.
Which brings us back to that seemingly fanciful goal of being "the first [company] to create games that billions of people play together." In response, Carter offers the example of a game created at his previous company, Game Closure, by Playco co-founder Jimmy Griffith -- EverWing, a casual title that launched on Facebook's Instant Games platform in 2016, and reached 400 million players without any marketing budget and a modest staff.
"Even though you can say there's four billion smartphone users out there, we haven't been able to access all those people"
"If that's the first shot on goal, it tells us that we've already seen scale here that is larger than most entertainment products in the history of humanity -- out of the gates," he says. "Going from that to doubling it, and then doubling it again, it takes resources and focus, but it's not inconceivable."
Waldron's own sense of confidence in being able to reach that goal is drawn not just from an observable trend in mobile games over the last few years -- a game with hundreds of millions of players would have seemed inconceivable a decade ago, but we now have Fortnite, PUBG Mobile, Honor of Kings, and more besides -- but also what he witnessed in the early years of Zynga.
"We've had, in the past, social games that were being played by 90% of all Facebook users," he says. "At that point in time, ten years ago, Facebook only had 200 million users.
"Even though you can say there's four billion smartphone users out there, we haven't been able to access all those people. Part of that is we haven't been building the content those people want, and part of that is they didn't have the technology to reach those people. The one type of product that is at 100% penetration on smartphones is the social networking and messaging category -- it's the only killer app.
From left to right -- Takeshi Otsuka, Justin Waldron, Michael Carter and executive producer Jimmy Griffith
"We know that basically everyone likes to play games with their friends, so why is it confined to this much smaller group among people who own smartphones? We think it's because the methods of distribution have become increasingly expensive, and it's been incredibly limited and focused on advertising. Over time, that created a lot of fragmentation, but it's also narrowed what can be successful.
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"Mobile games is something like a $70 billion market, and that seems huge. And the fact that something like Fortnite has a few hundred million users also seems huge. But a few hundred million users as a proportion of four billion devices is 10%, and we know that a decade ago there was a place and a path to getting 80% or 90% of people playing -- with the right products, with the right distribution.
"The simpler way of thinking about it would be: can you make a game that 25% of people who own a smartphone played? If you look at it that way, it's not a very high bar, but it involves satisfying all of these things that are not simple to get right.
"That's why we think this is possible. That's why we're excited about it."