Zigging While Others Zag Andrew Sheppard, Chief Product Officer

March 1, 2011

Who is this guy (Andrew Sheppard)?

Who is Kabam?

• Leading developer of Massively Multiplayer Social Games

• 7.5mm monthly active users across 3 games

• Offices in San Francisco, Redwood City and Beijing

• 275 employees

How is Kabam different from Zynga?

Audience Soccer Moms Core Gamers

Game Style Casual Games Core Games

Interaction Model Asynchronous Synchronous

Design Focus Chance-Based Skill-Based

Social Model Resource Transfers/Unlocks Collaboration

Session Length 15-30 minutes 15 minutes to 3 hours

Monetization Quick, Shallow Slow, Deep

• Launched in Dec. 2009

• First massively multiplayer social game on Facebook

• Received the IGN Reader’s Choice Award for Facebook Games in 2010

• The largest strategy game on Facebook

• Currently running at 430k DAUs

"It's well worth checking out if you've been waiting for a Facebook game that involves more than farming." IGN, April 16, 2010

"I have played role playing and strategy games all my life and Kingdoms of Camelot for Facebook is as good if not better than many of the consoles games on the market.“ Gamezebo, September 12, 2010

How did a small web startup build a game that would later win an IGN Readers’ Choice Award?

Let’s start from the beginning.

The Facebook Ecosystem in 2009

• The advertising market was reeling from the economic crisis

• Facebook traffic expands to 350mm MAUs

• Zynga’s footprint rumored to be 100mm MAUs

• Facebook revenues clock in at $700mm

• Zynga revenues at $200mm

Kabam (Watercooler) in 2009

• $8.5mm raised from Betfair and Canaan Partners

• Leading developer of Fan and Entertainment Community Applications

• 26mm MAUs across 800+ applications on 6 social networks

• Fundraise used to pivot into fantasy sports and games

• 100% advertising supported revenue model

How We Selected Kingdoms of Camelot

Step 1 Believe in the Power of Facebook

Step 2 Identify the Target Audience

Step 3 Deconstruct the Competitive Set

Step 4 Anticipate the Competition

Step 5 Execute

Step 1 Believe in the Power of Facebook

Development Begins

• Social functionality redefining web services

• MySpace taught us that a social network could power content distribution

• Believed Facebook was fast approaching a tipping point in adoption

Step 2 Identify the Target Audience

• 83mm Facebook users in the U.S.

• 43% of U.S. Facebook users were Male

• 90% of U.S. Male Facebook users were

old enough to have a credit card

• Farmville was the largest application

with 62mm MAUs

• Mafia Wars was the 3rd largest

application with 26mm MAUs

Step 3 Deconstruct the Competitive Set

• Product launches driven by ‘massive’

marketing investments

• Cross promotion bars used to amplify

the optical footprint of game developers

• User interfaces designed to drive virality

• Game designs tailored for quick, short

gameplay sessions

• Monetization focused predominantly on

aesthetic virtual goods

Step 4 Anticipate the Competition

Jun Jul Aug Sep Oct Nov Dec 2009

Mar Apr May

CASUAL

CORE

Development Begins on Kingdoms of Camelot

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Step 4 Anticipate the Competition

Jun Jul Aug Sep Oct Nov Dec 2009

Mar Apr May

CASUAL

CORE

Happy Aquarium Happy

Pets Happy Island

Step 5 Execute

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100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

Blazing a new trail isn’t easy.

Biggest Challenges

• Significant uncertainty around core games on Facebook

• Doubts about mass market appeal

• Concern over team size and experience

• Worry about the next round of platform changes

• Fear of ever-climbing customer acquisition costs

We did well, but not without some hard learning along the way.

Team Formation

• A small, tight-knit cross functional team was absolutely the right way to go

• Project benefitted greatly from having core gamers on staff

• Team would have slept better with more QA and Art

Team Structure

• Executive Producer, Art Lead and Development Director are peers

• Each function is responsible for driving decisions within their area

• Producers ultimately have the tie-breaking vote

• EPs/GMs are expected to be excellent at: – Strategy Planning – Product Management – Project Management – Game Design – Creative Direction

• We have no Product Managers or Game Designers (gasp!)

Game Development

• Should have allocated more time to prototyping

• Did a good job of scoping our MVP

• Should have included more robust instrumentation in our MVP

• Did a reasonable job of balancing speed and quality

• Correctly assumed that virality would be irrelevant

Game Design

• Introduced a novel approach to managing status/progression

• Launched with a totally imbalanced resource economy

• Should have spent more time playtesting battle

• Should have prepared users for frequent, thoughtful change

• Should have planned for more PvE

Merlin

Character Illustration

City 1

City 6

Battle Reports

Service Operations (1/2)

• Listen to your users

• Be honest and transparent about mistakes

• Never underestimate the importance of staffing

• Don’t underestimate the value of experience

• Regularly establish reference points for core flows and KPIs

Service Operations (2/2)

• Use promotions to force-multiply the value of content releases

• Leverage every messaging channel possible

• Keep a close eye on cheating and abuse

• Invest in communicating business goals across the team

• Don’t underestimate the importance of community

Summary

• We learned an incredible amount from Kingdoms of Camelot

• We are incredibly excited to be the leader in MMSGs

• We look forward to pushing the envelope in 2011 – 9 games planned to launch this year

– 100% focused on massively multiplayer strategy and role-playing games

– Aggressively staffing up our San Francisco, Redwood City and Beijing offices

Thank you for your time!

http://careers.kabam.com