Big Fish Games Bets on Freemium Games, Streaming Service

When Paul Thelen started Big Fish Games—“just in my bedroom, coding games,” he says—the Internet was just beginning to transform the way people got their entertainment. And it was a very big deal: Instead of heading to the store and forking over a few $20s for a disc in a colorful box, you could test a game out and download it straight from the Internet.

In the decade since, Big Fish has matured into a steady success story. The privately held casual game company has been profitable for years, recently reporting more than $180 million in revenue for 2011, a 30 percent growth. It smartly embraced the mobile revolution in gaming, becoming a publisher and distributor of top games on Apple’s iOS platform. And these days, with nearly 600 employees worldwide, Seattle-based Big Fish occupies the kind of nameplate-adorned waterfront headquarters usually reserved for big public companies.

“It goes fast, you know? It seems like just yesterday, but it’s been a fun ride,” Thelen says from his spacious office at Big Fish, where he serves as chief of strategy. “I was having fun building games, and some of them even started getting successful and I started hiring people. And here we are.”

Paul Thelen

There should be plenty more in store. On the eve of its 10th birthday, Big Fish is placing key bets on the newest changes roiling the video game industry, a sector that is often on the front edge of new technologies and ways of doing business.

After years of dedication to the traditional pay-to-play model, Big Fish is making a major push into the “freemium” consumer market—games that are free to play, but make money by charging for premium perks.

The company also is getting ready to unveil a cloud-based gaming system that will make game play faster and available almost anywhere there’s an Internet connection and a screen, a move that will open up its considerable library of PC and Mac-based games to new sales.

On top of all that, Big Fish has placed a big bet on social gaming for the first time, acquiring San Francisco-area studio Self Aware Games, which created a high-grossing gambling game for iOS and is preparing for a major move to Facebook.

These moves all come at a heady time for the video game industry, which has seen exploding businesses on the Web and social networks create fast-rising public companies and overnight multimillionaires, even as revenues have plummeted on other fronts, such as console gaming. You wouldn’t, however, mistake Big Fish for a frenzied participant in the latest gold rush.

The company, as CEO Jeremy Lewis told VentureBeat last year, is typically methodical and analytical about the moves it makes. That has parallels in the company’s core games business, too. Big Fish produces its own titles in-house, but also serves as a marketplace for other game developers to sell their wares. Big Fish has perfected its data-driven sales and marketing … Next Page »

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