Deal Radar 2009: Outspark

Deal Radar returns to social gaming with Outspark, a casual games publisher that has developed a virtual playground where online gaming and portals merge to create a new market called 3P, in which a company must be a games Publisher, operate a Portal and own and operate a Platform. Outspark.com is a “freemium” games portal combining online gaming with personalized social networking experiences to enable player to connect with friends outside each game. 

It provides users with free and premium social gaming entertainment experiences via gameplay, events, web and in-game stores, and social portals, and aims to help game developers become successful by offering them access to a flourishing MMOG paying community. The company has published games like Fiesta, Secret of the Solstice, Blackshot, Project Powder and Wind Slayer.

Susan Choe, founder and CEO of Outspark, rediscovered the fun of social gaming while doing due diligence for Kart Rider and Audition. When she found herself playing until 2 a.m., she realized that even among casual gamers like herself, online social interactions are so real that people are willing to pay real money. 

Outspark is the first virtual playground to combine rich and free online gaming with a social-networking portal. Outspark started as a PowerPoint in Choe’s living room in mid 2006 with a few months at the incubator, Plug and Play. Initially Choe provided the seed investment from her own funds, and in January 2007 when Outspark launched, it raised their Series A round. An $11 million Series B was raised in January 2008 from investors including DCM, Altos Ventures and Tencent Holdings. The company is currently speaking to a select group of investors for further funding. 

Outspark has been created in what it views as a win-win industry segment in which gamers, game developers and publishers all benefit. Game developers can do what they like, gamers get ‘just-in-time’ game content at price points they choose, and publishers can get profitable quickly. For gamers, the benefit is quality games across genres with a quality online community that is playing games, making friends and buying virtual goods at prices they want to pay. For game developers the benefit is a rich audience of MMOG players who pay and an easy way to link into Outspark’s publishing platform with simple APIs.

The number of MMOG players has been increasing and stands at about 174 million in North America and Europe. In 2008, the digital games and ads market was approximately $3 billion globally. Outspark focuses on the segment of players who want to both play games and meet friends online.

Outspark has more than 4 million registered users with the average active user spending near $50 per month. The average life of spending users is between 5-8 months and their average life spend is about $300. Some users also spend tens of thousands of dollars each. The company has 5.4 million visitors a month, with a 70:30 male:female ratio; this is a higher number of females in comparison to console gaming. Over 70% of their users are between 13 to 25 years old, with 75% living in North America, 20% in Europe and 5% in the rest of world. 

The company is a few months from breaking even, which it views as an accomplishment as its public launch was just a year back. Outspark said that its 2008 revenues are in the millions of dollars and their 2009 revenues are expected to be three times as much.

In 2009, Outspark plans to bring variety of advanced casual MMOGs to their user base through global developers. They will launch a collection of games that cater to the household of social gamers, especially ones in the 16 to 25 age group. On the portal side, the company is working to expand its social networking features to help its audience share gaming and other ‘life’ experiences and maintain its 81% active-user rate per month. The company is also looking into partnerships with global media and distribution partners to strengthen its market growth.

Recommended Reading:
MMOGs – The Parallel Universe
Casual Games – Everyone Can Play
Deal Radar 2008: Grockit

This segment is a part in the series : Deal Radar 2009