GamesBeat: One thing that’s harder to understand is this: These games have been around for so long — 100 years or more? — but they’ve shown a surge in popularity for the last year or two. It’s almost like the poker thing. The whole poker craze.
Walcott: These games have been around for 100 years in the brick-and-mortar world. How about this? What’s that series of hidden-object books…I Spy! The I Spy books have been around for years, but nobody brought them to the casual game market until Big Fish did it. And now that market’s skyrocketed.
Prior to Facebook, there were many stand-alone casino games, downloadable games that you could buy, that were somewhat uninspiring. You didn’t have that sense of winning and losing. You just had the experience of spinning a reel.
When you buy a downloadable game, you get a million chips. You play with them, eventually you lose them, and then it populates with another million chips again. So you don’t really have that sense of gain or loss because it’s just a fake number that keeps getting repopulated. On our site, a little bit of a difference is that every day, we’ll give you 20,000 or 50,000 chips for free when you show up. You can lose those, and then you can’t play the rest of the day. You have that sense of loss there. Or if you want to continue to play, then you can pay us as little as $3 dollars to continue to get more chips out there. You truly feel a sense of winning and losing out there, which is part of what entertainment is about.
Some of the games that we have are skill games. We’ve got the poker games that are more skill-based, blackjack is skill-based to an extent. Slots and roulette are the true games of chance out there. When I look at the games of chance, again, it’s an entertainment product. It’s like going to watch a movie, where you’re feeling the high and the low, the sadness or the excitement when you want that protagonist to win. That’s how we think of our slot machines. A lot of that plays into our math models, too. How do you make it so people get excited often enough that they’ll keep playing and want to come back?
GamesBeat: Where do you guys stand on the potential for legalization of online gambling?
Walcott: It’s funny. When I was at G2E [Global Gaming Expo conference] this year, I was supposed to be talking about social gaming. That was all the panel talked about. 100 percent. Where is legal poker going to go? I stopped and I said, look, every presentation in Vegas is about where online poker is going to go. You can speculate all day long. But let me tell you about social gaming and why you guys suck at it. And that was what I did. I walked through why they suck at social — not just social gaming but social initiatives they’ve had.
The DoubleDown Interactive team, which is 99 percent here in Seattle, is a social game company. We focus on free-to-play and virtual currency. It has nothing to do with whether or not there’s any real gambling. Our business model is not predicated on legalized gambling. We’re 100 percent focused on providing incredible game content to the social game user. IGT, our parent company, is obviously a real-world gaming company with gaming licenses in over 200 different jurisdictions. They’ve got people who understand and care about real gaming.
The latest news, I understand, about the U.S. legalizing poker puts it maybe two years down the road. For us, that’s so far in the future it’s not anywhere on our road map. We take somewhere between three months and nine months to build a game. When there’s more certainty as to what’s going to happen within that world, then we’ll spend some cycles focusing on that. Focus is one of the big things we preach in our executive team. Let’s focus on a few things and do them really well. If and when legalized gambling is something we should put within our purview, then at that point in time we will.
GamesBeat: If there’s this bubble of excitement because of your transaction and what the Justice Department is saying, how do you then stay on top of a world with 30 or 50 companies making this sort of game?
Walcott: Last I checked, there were over 100 applications on Facebook that had some sort of casino-style slant to them. You’ve got some of the best players in the gaming world. EA and PopCap Games launched their game a number of months ago, which is primarily a slot game. You’ve got WMS, which is a competitor to IGT, coming out with a co-branded slots product as well. There are a lot of companies with a lot of gaming experience and a lot of industry knowledge that are coming out on Facebook with products that compete with ours.
But none of them have been nearly as successful as we have. I think the closest one of those has maybe 200 to 250,000 DAU. It’s a hard business to be in.
We’ve got two years of learning about what works really well within our category. We’ve got a great strategy. We understand how to obtain users, and more importantly, how to retain those users. That’s not something that translates over from any game company. Our game mechanics so closely mirror — when you’re playing our slot game, the only thing that’s missing is the cocktail waitresses [laughs]. It feels like you’re in Vegas. We’ve mirrored those game mechanics very well. We have great developers, and we’re looking for tons more. We have more than 50 positions open.