Ahoy, transmedia! Warner Bros. sails into digital games (interview)

GamesBeat: Freemium — how do you guys look at what the opportunity is? I look at Activision. They’re still reluctant to give something away for free.

Ballard: Isn’t that the reason why startups have been successful against the large console companies? This is the story that you’ve written for 20 years. Large companies can’t cannibalize themselves. Smaller companies don’t give a rat’s ass. They come in and they do the things that the larger companies can’t afford to do, or culturally won’t allow themselves to do. They gain momentum and eventually become successful.

Warner, to its credit, may be a little bit late to the console business. It doesn’t have the same built-in resistance to new models. We haven’t had decades of experience with old models. We’re a bit more open-minded about doing something that is, in theory at least, threatening to the base business. We also have a new CEO at Warner who is very aggressively looking at new business models and considers innovation to be a pillar of what he wants to embrace at Warner. There’s a lot of things happening all at once at Warner that make this possible, but part of it is that we don’t have a long history like the Activisions and others that would keep us from doing this.

So to answer the question of what we think about free-to-play, everything that we have seen — and we’ve seen this at Turbine — is that you need to unleash people to spend their level of commitment to a game. Our previous efforts in mobile, though we tried not to make this the case, ended up limiting the amount of money that a real fan could spend on a game. Same problem as the console business. There’s only so much you can spend in the passion at that moment where you might spend all of your available dollars. The wonderful thing about free-to-play is that it does embrace that passion in gamers. It allows them to become as committed to a game as they want to be. That’s the essence of the model. The people who aren’t paying become valuable members of the community.

GamesBeat: What are some lessions you have already learned?

Ballard: I think that’s the biggest one. Even on the paymium side of our business, we were imposing caps on how much people could engage with our games. Frequently we saw people hitting that cap and either losing interest in the game or just not monetizing anymore. The single biggest thing that we’ve observed is that there’s a range of levels of commitment and passion about games. You want to be able to capture the economic value of all those different levels of commitment.

GamesBeat: Embrace your whales.

Ballard: [Laughs] Embrace your whales. I found out my son was a whale at one point. It’s like an expose. “My Son Was A Whale” by Greg Ballard. On my credit card. [Laughs] It’s every parent’s worst nightmare.