MARCH 30, 2010 • DFC has been aggressive in covering the free-to-play (F2P), games as a service business model. While that model is experiencing substantial success, the model itself can only drive revenue as long as the content provided is found compelling by consumers.

We expect that continued F2P growth will require dedicated content innovation to keep consumers happy. Which leads us to Electric Bat Interactive (EBI), a recent change in moniker from WebWars, LLC.  The developer has crafted something called Layered Reality Gaming (LRG) – the kind of innovation that can draw in consumers who might get bored with the proliferation of cute and engaging F2P games available online. In short, LRG titles use existing commercial web sites as a playground – allowing users to competitively vie for control of the page.

Austin-based EBI has two titles using the technology: Weblings and WebLords: Shattered Domains. DFC spoke with chief-executive officer Cindy Armstrong for an update on how Layered Reality is being applied, and what the prospects for the technology are moving forward.

DFC: In July WebWars/Electric Bat will have been in business for two years. Which begs the question, what was John Galt Games?  Trey Ratcliff was CEO of JGG, and until recently was listed as Futurist at Electric Bat.  What part of what was JGG is in play at EBI today?

CA: When I joined John Galt Games, in charge of business development, the company was going in many directions.  They were using a studio in the Ukraine to develop game technology.  The studio was solid, but there were communication difficulties between the two studios.  The engineers didn’t speak English and no one on the JGG team spoke Ukrainian. As you can imagine that was a ‘slight’ issue.  JGG also had a studio in Kuala Lumpur being managed from the U.S.  In short, JGG didn’t have a clear product strategy or focus.

I was asked to help evaluate the potential of the products and direction of JGG.  We determined the studio in Kuala Lumpur was not sustainable, outsourcing in the Ukraine was far from optimal, and that we needed to focus in one single direction.

Through that process, I was offered the position of CEO.  As the changes were so dramatic – including the structure of the company – we established WebWars LLC, recently renamed to Electric Bat Interactive.  From the onset the primary focus was to develop a platform from which a series of games, playable across the Internet, could be quickly created.

Trey Ratcliff has decided to pursue his photography career, having recently released a successful book, and has been on tour.  He is no longer involved in day-to-day activities of the company.

DFC: Where did the Layered Reality Gaming concept come from? We fondly remember WebWars: EVE as a John Galt Games title unveiled in 2007 that had a similar take-the-game-into-the-web concept. How has LRG evolved since then?

CA: The original concept of battling over websites was intended as a one-off game, WebWars: EVE, from John Galt Games.  The concept of Layered Reality Gaming evolved as we began putting together a business plan for WebWars, the company.  What if we could add a layer of fun to what people are doing all the time – browsing the Internet?  Whether someone is checking news or the flight status of their next trip (something I know all too well), doing research, picking their NCAA bracket – we wanted to allow people to engage on any website from a simple Gamebar instead of requiring that they go to a destination site for fun.

LRG continues to evolve as the team (designers, engineers, artists) come up with new ideas to take gaming across the web.

DFC: What happened to WebWars: EVE?  The game is not listed on your web site.  WebLords: Shattered Domains, however, sounds like a very similar concept.  Are they connected?

CA: WebWars: EVE was tabled for several reasons: The desire for character customization, which could not be done with the EVE property as we did not own the IP, conflicting views of how to maximize the IP and the desire to have a product that could easily reach the Asian market.

WebWars: EVE and WebLords: Shattered Domains are similar in the concept of battling over websites; however, with WebLords we added a fantasy RPG element that has worldwide appeal.  We introduced a hero character and a leveling system that would not have been an option with WebWars: EVE.  We believe these elements make for a game with more depth and a broader appeal than we would have been allowed working with an established IP.

DFC: What did your stint at Sony Online Entertainment (SOE) provide you that came in handy when you launched WebWars in 2008?

CA: My stint at SOE taught me many things.  The first and most important lesson was hiring good people and letting them do their jobs.  Often times as a senior executive you want to instill your views as to how a project should be run, specific design features, what you personally like, don’t like, etc.  From my experience at SOE I came to recognize this as the team’s job.  As CEO I need to ensure we’re on track, question assumptions, question business models – but at the end of the day it’s the team’s responsibility to deliver.

I also learned the value of communication – which yes, seems obvious but is not always so.  At SOE we had a weekly management meeting.  Most often I found them long, sometimes on topics that seemed irrelevant, yet now I recognize the importance and have adopted the same policy at EBI.  The weekly meetings keep the team focused on what is critical in the upcoming week, as well as what might be at risk.

Another lesson I learned is that if you want to develop a product with worldwide appeal, take that goal into consideration from the beginning. This includes art style, gameplay mechanics and allowing for territory-based code flexibility, so different markets can adjust the game to fit their own market. Assuming what is successful in one market will be successful in another is a fast path to failure.

Finally, I’m learning the hard way the benefit of a having a strong, well-known brand name like Sony.  I took this for granted, not recognizing the doors it opened or the basic level consumer confidence it instilled.  Electric Bat has very good products that I believe in very strongly, however, consumers are not as easily convinced as if I were offering these products under the Sony umbrella.

DFC: What do you feel you have learned from working with some of the Korean game companies that have a long history in these types of games?  Can U.S. based startups compete with the vast experience that companies in Korea and other parts of Asia have?

CA: First of all, I feel Korean companies will continue to lead innovation in online games. Given the competitiveness of the Korean market, companies that don’t innovate, that don’t take risks, don’t survive.  The free-to-play model came from Korea when companies recognized the need to offer something less immersive than MMOs or did not feel they could or wanted to compete against Lineage.

Among the things I’ve learned from the Korean companies is that simple, fast game play is appealing – especially today when people have so many demands on their time.  Players don’t want to feel they have to dedicate a two hour time slot to enjoy a game, but can sit down and have a good time in 5 to 10 minutes.  And if that 5-10 minutes stretches to an hour? Great!  What’s fun with our games is that a player doesn’t have to commit even 10 minutes for fun – a player can engage for as little as 60 seconds and gain satisfaction.

I definitely believe U.S. companies can compete against the companies in Korea and other parts of Asia. The key is learning from the best practices, being innovative, and not being afraid to try something new.

DFC: Describe your forays into Asia for SOE.  What was it like coming from a Western publishing and development perspective and having to come up to speed with the burgeoning free-to-play micro-transaction business model in Asia?

CAA: Dating myself a bit here, my first forays into Asia with SOE were prior to the take-off of free-to-play games.  Lineage was the most popular game and the concept of bringing EverQuest to Asia, with its strong U.S. player base, was appealing to both SOE and NCsoft.

I can barely begin to tell you how much we learned from the process, which I still use today, regardless of type of game or business model.  Localization is a great example – we spent a large amount of money to have translations done in the U.S. only to find that it would be scrapped entirely – the local-U.S. translators missed nuances or game language that only the local market knew.

The definition of open beta was probably the most eye opening.  This is changing a bit, but at the time the definition of “open beta” in the U.S. was a lifting of the NDA, however, the product was still being tweaked and there would be bugs.  The beta period was used to identify and fix before releasing into public.  In Korea this definition was a ‘live’ product – ready for broad public consumption, the only difference was gamers didn’t pay for content.  I still remember the Saturday when we first launched EverQuest – approximately 40,000 people tried to play in the first hour.  Problems arose, but we weren’t concerned as we believed this was beta – the time to find and fix bugs. NCsoft, however, knew the market and that these customers might never come back.

The last few months of my time at SOE we began looking into the FTP model.  We built a business plan and had contracts signed to license product into the U.S.  A decision was then made that this FTP, casual business was not core to SOE’s business and thus it was tabled.  Needless to say, I was surprised and delighted when SOE decided Free Realms would be a FTP game. Given the number of players who’ve registered, this was obviously the right choice.

DFC: Weblings seems like the cute and friendly kind of product that will do well in Asia.  Have you found an audience for Weblings in Asia?  If so, please detail which markets and how well the game is doing there.

CA: We have only recently begun showing the new Weblings in Asia.  Response so far has been extremely positive.  I felt the primary audience for Weblings would be the U.S. and Europe and am pleased to see the interest from Asia.  As the new version of Weblings is not yet available for testing we have yet to begin discussions on possibly licensing/partnership opportunities.  I would expect this to happen within the next couple of months.

DFC: What is your strategy for emerging markets such as Asia, Latin America and Eastern Europe?

CA: Having lived in both Europe and Asia, as well as opening emerging markets at SOE, international markets have always been a focus for me.  We are continuing to build our emerging market strategy, but expect it will be different in Asia versus Latin America or Eastern Europe.  Even in emerging markets in Asia consumers seem to be much more critical of product. It will be key to find a partner that can provide feedback for their market, obtain government approvals, and operate fairly independent of Electric Bat.

As for Eastern Europe, a strong partner is, of course, important; however, the products are more likely to be accepted as they stand with minimal, if any, modification.  The facts that the games are browser based, simple, small downloads, and have no high-end graphics cards or machine requirements are appealing in these markets.  From GDC alone we’ve seen interest from Russia, India and Turkey.  Our immediate focus is launching in the U.S., but I cannot wait to start pursuing these international opportunities.

DFC: Since its release last fall, how many users does Weblings have today after several updates?

CA: In January a decision was made to revamp Weblings – with this, the game never went beyond a soft launch stage.  We did not formally market nor did we try to build a community as we knew we would discontinue the current phase, effective the end of March.  What we did do was use this as a limited but extended open beta, learning what worked and what didn’t, and then incorporating this into the new version of Weblings.

DFC: What is your overall mobile strategy?  It seems to us that EBI games would do well on mobile platforms?

CA: We are just now building our mobile strategy.  To date the focus has been developing the platform with plans to translate that effort to mobile.  We will look at each game separately to see what might work with on the mobile platforms.

An iPhone version of WebLords will be available closely after launch of the computer version.  The iPhone game will allow players to access the same game as players using the Gamebar.  If a gamer is in the airport waiting for a flight, they can buy units, attack or defend a site from their iPhone.  Later, they can log in to the same account from a computer and access their units there as well.

As it relates to Weblings at this time we do not expect a full version of the game to be available on mobile devices; however, we are exploring ways that players might be able to care for their Weblings or show off their Webling collection.

We recognize the importance of providing cross platform content and will continue to pursue all options as resources are available.

DFC: LRG runs on Internet Explorer and Firefox.  Since Firefox is slated to be available on Android phones this year, will Android users be able to play Weblings or WebLords?  If not why not, and will that change?

CA: With the addition of Firefox, and Adobe recently announcing flash for Android, we hope to be able to offer an application for Android similar to what we are doing with the iPhone.  Of course the UI would need to change for the smaller screen. However, we hope to keep the fundamental elements of the game the same. At this time, we haven’t explored the specifics, so I can’t make any confirmation.

What we can say is that we plan to deliver the best user experience as possible.  If this means developing a separate application for the Android we will do so.

DFC: You are doing some things so that iPhone users can access your product?  Can you describe those efforts?  What do you feel about the potential to have a product be accessible across multiple platforms?

CA: As mentioned earlier, an iPhone application of WebLords will be available close to the launch of the computer version, pending Apple approval.  Players will be able to access the same functionality as the computer version, the differences mainly being the UI.

I’m very surprised at the ease of development of the iPhone version.  This is mainly due to two factors – first of all, the manner in which we developed the underlying game technology and the ease of which Apple has made the iPhone developer kits.  Our Director of Game Technology started the iPhone version on his own, during lunch breaks.  One day he came into my office and said, “I want to show you something,” after which was able to engage in a battle from the phone while I watched on screen – pretty amazing.

I believe there is huge potential in having products available on multiple platforms – this will be the wave of the future.  Consumers are not going to want to be restricted to a single means to access content.  As people are multi-tasking, on the move this will simply provide them the means to access what they like to do regardless of where they are.

DFC:  How do you expect to monetize the cost of development of EBI titles in the short- and long-term?  How much of that revenue is expected to come from advertising, versus more traditional virtual item or subscription sales?

CA: In the short-term I would expect the majority of revenue to come from virtual goods and the equivalent of a subscription, and in the long-term I look more to advertising.  As we grow our user base there will be more and more opportunities for advertising.  We have the unique capability for players to play on any website.  Our games are developed such that players are rewarded for visiting different websites, and we are able to drive traffic to specific sites.  Unlike banner ads that might get less than 0.5% of click-through, we have seen 80% of our returning players engaging in daily adventures that take them to different websites, actually engaging on a site.

DFC:  Your titles have a unique spin in terms of what they may offer advertisers and sponsors?  Can you explain how this works and the reception you are seeing from potential advertisers?

CA: Through different mechanisms we have the ability to drive traffic to websites and encourage gamers to interact with the site in a way that benefits both the player and the advertiser or sponsor.

With Weblings the primary means is a “Daily Adventure”, in which a player is given a series of three clues.  Each clue provides a hint about something specific on a website.  Once a player finds the correct site, and searches to find the correct page within the site, they must win a battle on the correct page before they are given the next clue. After successfully completing the adventure the player receives an in-game benefit.

What’s most exciting to us is that we can actually drive players to engage on the website, encouraging them to go through content to find the correct spot in which to battle.  For example, suppose the clue was to go to Kelloggs.com and battle where you can find the best savings.  A player goes to Kelloggs.com, initiates a battle and recognizes they are not on the right spot.  They then see a “promotions” sub-category– this is a way to ‘save’ money.  They try it; however, it doesn’t work. Finally they try “coupons” – they know they are on the correct spot when a battle screen appears with a different back-ground “X marks the spot”.  In this instance a player not only went to the website, but went through two sub-categories to find the right location.

Imagine instead of just receiving something in-game a player could also receive a coupon code for a discount on a Kellogg’s product or some other online offer.  This could be an extremely strong marketing tool for an advertiser or sponsor.

What’s really interesting is that in our early play tests we found on average 80% of our players returning players engaging in the “Daily Adventures”.  This compared to a click-through rate of less than 0.5% for banner ads.

A similar mechanism is available in WebLords through a quest system, which is relevant to that particular game.

DFC:  EBI is actively represented on Facebook, MySpace and Twitter.  How have those communities responded to your outreach and your titles?

CA: With limited exposure, our community response has been great.  Last year we were able to leverage the one-to-one communication afforded through sites like Facebook and Twitter to really listen to our players and fans and respond quickly to what they were saying and what they were asking for.  We expect these to take an even greater role in the future as we recognize the importance of providing content players feel is relevant as opposed to what we ‘think’ they want.  Today, players tell you, you don’t tell them.

DFC:  How well are these social networks driving users to your titles?

CA: We used Facebook last year to recruit beta testers for Weblings, and the response was fantastic.  Facebook allowed us to very narrowly define who we wanted to reach, specific age groups, what players interests were, etc.  Through this process we found an audience we did not initially expect to target.

We have only very recently launched fan pages and community sites on Facebook and Twitter for the re-release of Weblings and the upcoming summer release of WebLords.  We are gaining momentum and expect continued growth throughout the year among social networking sites.  We will be offering exclusive sneak peeks and news through those pages as we approach the official launch for both titles, as well as exclusive news and offers post-launch. For example, through our Facebook pages for both Weblings and WebLords, we will release early project concept art and stills that fans can only view there.  There certainly is a benefit for us to engage the social communities, and we want to be able to give our games’ followers benefits, as well.

DFC:  What about other networks such as Orkut, myYearbook, Tagged and hi5?  Will you include any of them in the near future?

CA: We are discussing working with both myYearbook and hi5, specifically, and we are looking into Tagged. Orkut is strong in Brazil, so we are planning to connect with them as we grow the games beyond their present English language focus.

Additionally, we are talking with niche social networks in hopes of featuring either, or both, games with them.

DFC:  WebLords entered a closed beta in early March. How has the user response been so far? What kinds of demographics has the game attracted?

CA: So far the response has been great. Many of our beta players have asked to invite their friends into the beta, which is always a positive sign. The game seems to be resonating with male players aged 18 and older, but we have female players in the beta as well.

DFC:  How are beta testers responding to WebLords?  What have you learned?  What needs to be tweaked?

CA: The beta players are giving us fantastic feedback. One of the things we learned is players came up with some interesting strategies for taking sites and building up their armies. For example, some players immediately went for the big sites like Google or Facebook, but many others took much smaller, more obscure sites. The players who took Google found themselves constantly defending the site from other players while those that took smaller sites were able to build up their resources and armies in relative safety.  What we found interesting in the very first week was that players were taking sites in France and Russia.  At first we thought we inadvertently invited players from outside the U.S. (which, for NDA reasons, we did not want to do).  However, instead players recognized these were ‘safe’ sites to own and less likely to be attacked.

Right now we’re focusing on balancing the combat, the loot and experience gain, and adding the last big feature before launch – the Empire System.

One thing I’d like to add is the importance of listening to beta testers and players.  The evolution of Weblings came about in-large part through our players and people in our office who were not playing the game regularly.  We recognized it was not as appealing to collect ‘human’ like figures and thus moved to Weblings pets.  Players also wanted to control how they collected their Weblings.  Instead of finding pieces specific to an individual Webling, players now find more generic tokens that they can spend collecting the Weblings they most want.

DFC:  How do WebLords players end up on a particular web site for combat?  Can it be random?  How is this URL selection made?

CA: Players can choose any website they want to attack and control. For the most part we’ve seen players either attack really popular sites (like Google or Facebook) or attack much smaller sites like their favorite bands or favorite blogs. The player simply enters in any URL they want to visit in their browser and then uses the Gamebar to take over the site.

Additionally, similar to the Weblings Daily Adventures, we expect to drive traffic to specific sites via the daily quests.  On a given day a higher value might be attributed to the site or even special loot item gained by owning the site.

Long-term we hope that players will be browsing the Internet, maybe bored with what they are doing, want a diversion and recognize, “hey, I should see how this site is owned or if there is a battle going on.”  They can immediately engage in battle should they see the opportunity to do so.

DFC:  In honor of the change in name to Electric Bat, what direction do the bats fly in the evening when they swoop out from under the Congress Street bridge?

CA: East, and I’m impressed you found the connection.  As you can see we’re proud of our Austin heritage.