Saturday, October 27, 2007

Outspark Launch Adds Weight to Micro-Transactions Trend

Outspark, a San Francisco-based casual games publisher with offices in Seoul, South Korea, launched its North American games portal yesterday. Like Nexon's South Korean-developed MapleStory, Outspark games will be free to play — in addition to advertising built into the games and the portal, the company will rely on micro-transactions of virtual goods sales to generate revenue.

Their first game, Fiesta, published by OnsOn Soft in Asia, is an MMO currently in open beta. Outspark, which secured $4 million in funding earlier this spring from Altos Ventures and Doll Capital Management, plans to work with other developers to publish community-oriented multiplayer casual games as well.

I put a few questions to CEO Susan Choe and Chief Studio Officer Nick Foster yesterday to get a better sense of the company's plans.

The micro-transaction model has been shown to be very successful in South Korea, where Outspark also has experience, but has been slow to take off in North America. Why do you think that is and why do you think it's time to launch this revenue model here?

SUSAN: The micro-transaction model was slow to gain traction in North America due to a lack of payment solutions like those readily available in Asia. The response of North American gamers, however, to this type of game and item sales model has been tremendous and forms the basis of Outspark's initial releases. Our expertise in running global portals like Yahoo (YHOO) and leading game product management at companies including EA (ERTS), Nexon, Blizzard and NHN will help us continue to deliver great results.

What demographic do you see as your primary target and how will you reach it?

NICK: Outspark's initial target demographic is the youth market, specifically those between the ages of 13 and 24. Friendly, socially driven games appeal to all ages, however, and we're attracting a diverse community of people looking for a different style of play than can be found in conventional console or hardcore games.

Your competition, in my view, is not necessarily World of Warcraft but socially rich Web 2.0 apps like Facebook and YouTube (GOOG). How will your products compete — or integrate — in that space?

SUSAN: Outspark's goal is to provide a socially active virtual playground for online gamers. By providing games that players genuinely want to spend time in and building a community around that shared experience, Outspark can be a good partner for socially rich Web 2.0 companies by providing their communities with additional engaging activities.

You talked [in the release] about Outspark as a "platform." Can you tell us more about that?

NICK: Outspark understands online gaming and the human drivers that make game communities successful. We're combining our expertise in global entertainment with an understanding of virtual item sales and good game design. Outspark's goal is to find media partners and work with them to apply this holistic "platform" approach to help build additional channels for their IP, around which online communities can grow.