Making Serious Money From Casual Games: King.com CEO Riccardo Zacconi (Part 3)

SM: What was the investment thesis for King?

RZ: At that time in Europe, portals were paying for sticky content for their pages. The thesis was to have a product that not only would they not have to pay for, but they could make money with. I called all my fold friends from Spray, who by then had left the company and joined various portals around the continent. I told them my idea for the product and that we wanted to simply share the revenue as our business model.

We started testing. One of the first partners was in Germany. After a few months we knew the conversion rates and understood the lifetime values. We then started to convert our first revenue share deals into guarantee deals.

SM: Who were the users of King? What kind of traffic were you attracting?

RZ: I would say that it was more or less same traffic we are attracting now, mainly females.

SM: What were they coming to King.com for?

RZ: We learned more and more about that over time. The first reason they come is for the games.

SM: You had a collection of games?

RZ: Yes. We started with 10 casual games.

SM: In 2002, the way we understood the market, people did not assume that women would be playing a lot of games. Were you surprised that you attracted women?

RZ: I think it was a bit of a surprise. We did not plan to have women playing. We found out very quickly that our primary audience was women over 25.

SM: That is very interesting. What did you do with that knowledge?

RZ: We started doing customer service and checked out what was playing on the site.

SM: Were your games free?

RZ: The model was similar to what we do now; we just had fewer games. The games were free, and you could play them with no problems. If you wanted to compete against other players for prizes then you had to make a deposit. At the time we were much more restrictive. If you were not depositing, we would not allow you to play free beyond a specific number of games.

SM: It was free to a point, and then you added a premium subscription?

RZ: Exactly. First we had a pure revenue share model. The second step was to give guarantees from our site in terms of getting traffic guarantees from our partner. The third step was better guarantees, which involved exclusivity agreements. We were able to take the third step after we had a better understanding of the financials and our partners were not allowed to close similar contracts with competitors.

This segment is part 3 in the series : Making Serious Money From Casual Games: King.com CEO Riccardo Zacconi
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