Building an online game platform: Startup caters to developers
The online game platform startup STOVE aims to solve the catch-22 of platform businesses by offering business assistance to its content producers, in addition to user analytics.
As platform business models go, the online game platform sets the pace for explosive growth and tough competition.
Valve Corp.'s Steam platform, home to such popular games as Counter-Strike: Global Offensive, can point to more than 100 million active user accounts globally since its launch in 2003. Electronic Arts unveiled its online game platform under the Origin brand in 2011 and surpassed 50 million active users by 2013. While those platforms appeal to PC gamers, millions of other users play on platforms built around video game consoles. Microsoft's Xbox Live and Sony's PlayStation Network rank among the prime examples in that platform category.
Against that backdrop, Smilegate, a South Korean game developer, earlier this year launched its STOVE online game platform. The platform delivers mobile games for users and also provides support and infrastructure to enable developers to create and launch new games. The company faces competition from not only mobile-only game distribution platforms such as Kakao as potential rivals, but also the mobile versions of Steam and Origin. But its fight isn't just for users; it also has to attract game developer and publisher partners who will provide games.
Indeed, the task for platform owners -- and their CIOs and CTOs -- is not only to accommodate sudden surges of gamers, but also put out the welcome mat for game developers, so users have games to flock to in the first place. To succeed, a platform must pull in external producers who create value as well as buyers eager to consume that value, according to platform experts.
Smilegate, for its part, aims to appeal to developers through a number of initiatives. Kyehan Song, CTO of Smilegate Megaport and the executive behind STOVE, said the mobile game platform will collect data on users' favorite game environments and compile gameplay stats. The latter clues developers in on usage patterns such as how much time a player spends on a particular game. Using the data, STOVE will provide developers with a detailed analysis of users' interests, which the game makers can leverage into their revenue models.
"The company is also considering the possibility of providing information that predicts user behavior patterns based on the collected data," Song said.
He said predictive analytics will contribute to developers' game promotion strategies.
Not all of a platform's attributes are strictly technical and STOVE is no different in that respect. Song said the company offers to handle the "complexity of various dimensions" of the game business for its game developer and publisher partners. The platform offers billing tools, for example. In addition, STOVE delivers key performance indicators that Song said help partners develop quality service operations.
STOVE also offers a specialized technical support team that provides consulting services based on each game's characteristics and genre.
The online game platform: Different ways to attract developers
Other gaming platforms are making similar moves, according to platform advisors and industry analysts.
Sangeet Paul Choudary
"The analytics and tools model is one of the most common ways to attract developers to gaming platforms," said Sangeet Paul Choudary, founder and CEO of Platform Thinking Labs and co-chair of the MIT Platform Strategy Group. He noted that the same model is used to attract brands to marketing platforms.
In addition, the analytics-and-tools approach doesn't fully address what Choudary refers to as the chicken-and-egg problem of platform business models: the need to get producers and consumers on board to make a two-sided business work.
"The issue is that it isn't really solving the chicken-and-egg problem as much as augmenting value once the problem gets solved, because there isn't really much value in analytics below a critical mass of usage," Choudary noted.
Choudary suggested a different strategy for gaming platforms: initially, work with, and cater to, top-tier developers to generate interest in the platform among the greater mass of developers.
"The best examples I've seen of attracting developers/publishers has been to attract marquee developers by giving them preferential treatment, using that marquee game to attract users and then using that traction to attract a larger group of game publishers," he said.
Smilegate's STOVE has sweetened the deal by offering developers business help and focused technical support in addition to analytics.
"Smilegate has put together what appears to be a nice package," said Lauren Foye, research analyst at Juniper Research.
The best examples I've seen of attracting developers or publishers has been to attract marquee developers by giving them preferential treatment, using that marquee game to attract users and then using that traction to attract a larger group of game publishers.
Sangeet Paul Choudaryfounder and CEO, Platform Thinking Labs
But she also noted that other platforms have made similar moves.
"Aspects of their service are already offered by leading players in the developer market," she noted.
Foye pointed to Google's developer program, which offers developers user analytics and provides them with the ability to create events and quests for both real-time and turn-based multiplayer games. For example, developers creating games for Android devices can use Google's events service to collect player data, which is stored in Google servers for game analytics, according to Google. The events data might shed light on how often players reach a particular level in the game. That insight could help a developer determine whether to tweak a game's degree of difficulty.
Song, meanwhile, said his organization continuously adds new features to meet the needs of the market. Smilegate manages the development and operation of the platform separately, but has a CTO of mobile operations in place to oversee both.
"Although the headquarters manage the platform operation and development separately, they are organically connected in that they both look for ways to provide support and develop the platform, as a whole, with a consistent point of view," Song said.
Email John Moore, Site Editor, SearchITChannel, or find him on Twitter @JM0ORE.
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Sangeet Paul Choudary
