[At the IGDA Leadership Forum, where our own Christian Nutt is in attendance, a fascinating talk by PopCap co-founder John Vechey recounts when the company turned down a $60 million buyout offer in 2004, and how it's a bad idea to try to "out-Zynga Zynga."]

As casual gaming powerhouse PopCap (Bejeweled, Plants Vs. Zombies, Peggle) enters its 10th year, co-founder John Vechey sees the company profoundly changing as the industry itself goes through seismic changes in platforms and business models.

Speaking as part of the International Game Developers Association Leadership Forum in San Francisco, Vechey delivered a keynote on the evolving nature of the industry.

Recapping the company's history, he said that in late 2004, the company got a 60 million dollar offer to sell -- that the founders walked away from. It helped them realize why they founded the company in the first place. "This was pretty crazy because we didn't make PopCap to make millions of dollars. We made PopCap to make games."

"We turned it down because we didn't think it was a very good offer in terms of how they valued what we created and how they thought about our IP in terms of games. When you walk away from an offer like that... you really have to look at 'Why are we doing that?'"

"We needed to stay independent, we needed to grow, we needed to change." This was the first huge change for the company -- the founders hired a CEO, and enriched the business side of the organization, allowing tremendous growth.

And at this point, said Vechey, "We have over 375 employees, which is kind of obscene and grotesque on one hand and awesome on the other. We get to control our destiny."

"We could have lost our ideals through that transition... We could have possibly even lost some founders who got frustrated," he reflects. But "Without those changes, Peggle would not have existed. Peggle would not have been able to be worked on as long as we did. Neither would Plants vs Zombies."

The Next Big Change

"Now, I think we're at another large transition point. At the first one, I didn't realize the company was changing. But this time I was thinking... We're in the middle of a gigantic change."

In last two years, said Vechey, "everything has changed for PopCap and everything is changing for other companies, whether you're casual or hardcore."

Though they were once the cornerstone of the company's business, "Downloadable [PC] games are irrelevant. We only work on them because they work well to go to other platforms."

"iPhone didn't exist two years ago. There was no App Store. There was no Facebook platform. We need to look at new games and make them in different ways. And what makes one of our games 'one of our games' is really changing."

And though the company has already begun to change fundamentally in its thinking and structure, he says, "I think PopCap soon -- in two or three years -- is going to be very different" yet again.

The first major change is, of course, the rise of social gaming. While the era of "cheap, free, easy traffic" is gone, the item-buy business model was "first really accepted in a broad way in Western markets" thanks to Facebook. And the Social Graph, "the ease of interacting with your friends" is tremendously relevant.

"If you take advantage of the Social Graph, then every single game will be made better," says Vechey. Take, for example, Minecraft, he says. "It may be one of the most important games of the decade. Minecraft would be better if it had the Social Graph inside of it. I don't fault them for not doing this, they're indies. World of Warcraft would be better with the Social Graph from Facebook."

That's because interacting with your friends through games makes them more fun. Vechey recounted how he didn't realize his friend was playing League of Legends for months because of the lack of Social Graph interaction, and when he did, he felt cheated out of fun experiences playing together he could have had.

"Peggle would be better with the Social Graph, even if you play through the single player experience, to see your friends' best shots, their best scores," says Vechey.

"We have Bejeweled Blitz on Facebook... But we're looking at all of our other games across all of our platforms and they could made better with social relevance. And it's not that every game would be FarmVille. I'd probably kill myself and stop playing games."

Another major change, says Vechey, is games being connected persistently to the internet. "Online games and MMOs have been living in this world a lot more. The fact that it's easier to update the game on two of the major platforms, the web and Apple platforms... It is a lot easier to have an ongoing relationship with your customer."

In Vechey's eyes, in fact, it's not the ease of updating alone -- it's how you interact with your customer in the context of it. For this, he loves Steam, but everybody on PC does not use it. However, he says, "There will be technology that gets easier and cheaper."


"If you look at the successful [iPhone] developers they are constantly updating their games," he says, calling out titles Angry Birds and Doodle Jump. "A lot of [that updating] is how they interact with their customers."


The Meaning Of "Connected"

And that kind of relationship is set to evolve to the next plateau. "Take that to the next extension of what connected means... I know who that customer is, if you go from the iPhone to the PC, it saved my game for me... Or unlocked a special plant for me" in Plants Versus Zombies, theoretically, he says. And it will get even more complex. "The Bejeweled player can get a high score and unlock something in Plants Versus Zombies."

"You can do some cool things, but I don't know how we're going to do it. I can wave my hands and describe this cool world, but it's harder from a technology standpoint, user interface, game design, but it's important. And the companies that figure it out will be more successful," he says.

The model is "whenever you're interacting with a PopCap game it's like an MMO... Constantly being rewarded for the investment you make over the long haul."

And of course, the next seismic change is microtransactions. Vechey is a big fan of this model. "Generally speaking, it's a better business model... than $60 downloads, than $20 downloads. It's a good business model."

He notes that he's "probably spent about $400 on League of Legends."

"How do we get the right customer to spend the money? It's better to say 'customer, I respect you enough to let you play the game for free,'" says Vechey. Buying a game for $60, particularly at retail, is "no fun", he says. But when you add microtransactions, "you can make purchasing your game fun. You can make it part of the game."

And this is broadly relevant -- even though designers are resisting it. "There are some art games and I respect them and I'm glad they exist, but 99 percent of the people in this room are in business. It's a fusion of art and business"


While he admits that Bejeweled Blitz is a retrofit for the model, Zuma Blitz, which is soon to enter beta, "is super cool" in its integration of the business model. "There are all these extra ways people can consume the game, and pay us as developers, and it's more fun. It's more fun for the free players and more fun for the paying players."

And though PopCap has always been strong on supporting multiple platforms, the nature of multiplatform development and the explosion of varied platforms is another huge change for the industry, Vechey argues.

"Mindbogglingly Complicated"

"You really have to step back and say that it's a whole new challenge," he says, in the context of this new world of social interaction and monetization. "It's just mindbogglingly complicated. ... I have yet to see a technology problem that hasn't been solved by smart engineers, but from a design standpoint, how we make our games, it's now complicated," he says.

At PopCap developers used to be siloed by their target platform. "Let's say there's some theoretical world in which we're working on PVZ2, and in that world we are working on a PVZ social game. How are we supposed to keep them both great games, and worked on by the same designers, and that they exist on a number of platforms, connected to each other, and are somehow related? It's not easy."

And it's a challenge driven by player desires. "As we keep making games, I as a consumer want to interact with Halo on my iPhone as I do on my Xbox," says Vechey. "These changes that we're going through now, we're in the middle. Some of them are further along than others, but they're all-encompassing to PopCap. Our organizational structure has changed. The amount of money we spend on games has changed."

And in the future, he says, "in some ways PopCap is going to be unrecognizable."

Suddenly, he says, "Jason [Kapalka, PopCap cofounder and creative director] is thinking about, does he need to learn about backend server technology? That's a waste of his time, but yet [he might need to.] We need different types of people who speak different languages in the company." 


"I do believe that all of these changes will affect the whole game industry to some extent. And they will make it better. It will make it harder to make games on one hand, but it will make the end result better," said Vechey.

And these changes do not mean that the fundamental direction of the company needs to change. Social games do not have to be bad games. "We are all about fun and it will be part of our process," he says, to launch a fun social game.

Out-Zynga Zynga

"I often talk to people who are doing social games, and they do really derivative social games, and I tell them, they're not going to out-Zynga Zynga. They're very good at what they do," he says.

"I've felt empathy for my friends in the company who just don't understand [these changes] or whose lives have become more complicated... At the same time I look at the millions of people who play Bejewled Blitz... And I look at how Zuma Blitz uses the social context," he says. Change is inevitable and rewarding.

And while these new platforms do offer demographic challenges, and offer a lot more audiences access across different types of players, the company hasn't considered that too actively, he says. "For PopCap, we've never made games for demographics. Plants vs. Zombies is an extremely broad range of people."

"I do see more blurring of demographics, though. FarmVille's great for this room. It has got a huge number of people who did not play games, and didn't know they could play games, to play a game. Games should be as big as movies. 100 percent of the population should have a favorite game. The idea of making a game for a demographic will become less important."

And though some developers just don't get social gaming yet, he doesn't see a need to cast them aside in this revolution. They'll learn by example. "At PopCap we have a really patient attitude with people. Step one is being really honest." The management shows them why it's relevant to the company and how it will still let the game be fun -- and people will get it.

"As we do a game like Zuma Blitz, we can prove that the only game that's going to succeed is not Mafia Wars, or a farming game. We'll prove that it's not the only way to succeed. And people like George [Fan], the Plants vs. Zombies creator" -- who dislikes social games at present -- "will see the way to go is social," says Vechey.

Even if some developers never come on board, he says, "we'll never say no to really great games, and they'll continue to make games with limited audience and limited revenue potential. And it'll be cool."