10 Years Of PopCap Games: Beyond Bejeweled

Date: Jan 04 2011 08:15:57 Source: forbes.com
KeyWord: PopCap Games, PopCap, Bejeweled, Zuma, Plants vs. Zombies
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There's a lot of talk about the evolving business models of the game industry, but one fundamental is often overlooked: there's no substitute for good games. And there are few in the industry, particularly in the casual games genre, who can match the track record of PopCap Games when it comes to hit intellectual property. The Seattle-based casual games developer is, after all, the company behind the popular puzzle game "Bejeweled", which has sold more than 50 million copies since it launched in 2001, generating at least $300 million in sales (as of August 2008).

Now in its 10th year anniversary, PopCap has aggressive expansion in mind. The company has been profitable since inception, generated $100 million in revenue this year, and currently has 400 employees. PopCap just took its first-ever round of funding, $22.5 million, last year in October. The funding will help PopCap expand, but it will also help the company get ready for a possible public offering in the future, as early as the second half of 2011, PopCap chief Dave Roberts tells me.

"We'll look at [an IPO] for the second half of next year," Roberts says. He adds that the company is structurally putting the team and pieces together that could allow it to go public soon. The company may add up to 100 employees next year. But there isn't any urgency here, Roberts says: "There are no investors pushing for it, so we will really only look at it if the markets align."

Part of PopCap's success so far has come from its ability to create new IP that catches on with players. The company is known for its quirky and innovative titles, casual games that are popular with those who don't consider themselves gamers. The "Bejeweled" franchise was the company's first game and first hit. But PopCap has been able to create hit after hit since then, with popular franchises like "Zuma", "Peggle" and "Plants vs. Zombies". Rare, in fact, is the complete dud for PopCap.

But it is PopCap's diversification away from its core platform and demographic that tells the story of where the company is headed. One part of that diversification has been PopCap's expansion onto other platforms. When the company started a decade ago, its games were primarily available for the PC and Mac. In 2000, desktop game sales made up 85% of the company's revenue, while "online" sales made up a mere 15%.

PopCap's percentage of revenue by platform, via PopCap

A decade's passing shows big changes to PopCap's revenue split. For the first time this year, desktop sales did not make up the majority of total revenue - they only accounted for 40% of the pie. A growing sector for PopCap is mobile, which now makes up 30% of total revenue. Online (i.e. "Bejeweled Blitz" on Facebook and other social games) and console (i.e. Xbox Live Arcade) each respectively accounted for 15% of sales. Roberts says PopCap's titles translate well for smartphones, and the numbers support his assertion. It had two titles, "Bejeweled 2 + Blitz" and "Plants vs. Zombies", in the Top-Selling Paid iPhone/iPod Touch Games for 2010, according to Apple, the only game publisher to have two entries in the top 10. "Plants vs. Zombies" is also a top 10 top-selling and grossing iPad game.

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