Enough With The Shoot-'Em-Ups

Skunk's Margaret Wallace develops `casual games.' Turns out the market for them is huge

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Margaret Wallace, CEO of video game developer Skunk Studios, represents the kinder, gentler face of her industry. With her vivid dyed hair and hip wardrobe, Wallace looks anything but the typical corporate CEO. That's no accident: Skunk's four male co-founders chose her to be in charge in part because Wallace, 39, represented the demographic that they were trying to reach. Her company's so-called casual games, with their simple graphics and short learning curves, are more akin to early PacMan than to today's violent, complex shoot-em-ups. "For so long, developers and designers focused only on one segment of players," says Wallace. "It's as if Hollywood only made action movies. It's fun to make video games for the rest of us."

So while Grand Theft Auto and other celebrations of bad behavior make headlines, Skunk's 15 employees turn out titles based on pastimes such as tennis and mah-jong. Skunk's most popular title is Gutterball 2, a cartoony bowling game with alleys set in the Arctic and in jungles. At about $20 a pop, it's been downloaded 128,000 times from the Skunk site alone.

In September, gaming news Web site Next Generation listed Wallace as one of the most influential women in video games--proof that the $10.5 billion industry has taken notice of the $2 million company. "Having a woman in charge can help make sure there's a more diverse group of people making games for newer audiences, says Eric Zimmerman, CEO of gameLab, another casual-game developer.

Developing casual online titles can be much less risky than trying to create a game that runs on a console such as an XBox. Casual games typically cost less than $200,000 to produce, and production cycles are only six months to a year. There's no shelf space, packaging, or CD production to pay for. Best, says Wallace, "there's more room for innovation."

Wallace is hardly new to casual games. In the late 1990s, then a digital designer, she worked with artists Jason Calderone and Thomas Estess and programmers Kalle Wik and Joseph Walters at Shockwave.com, an online game developer. The quintet shared a vision of writing games for families. The key would be to produce titles that weren't violent and didn't require an expensive console. They got their chance in 1999, when all five were laid off.

NO BOYS CLUB

Skunk has made good on its goal of reaching out to a different demographic. Some 60% to 70% of players of Skunk's games are women in their 30s and 40s. Wallace and her co-founders are in an industry sweet spot: The average age of frequent purchasers of all computer games is now 40, and women gamers over 18 far outnumber boy gamers under 17, according to the Entertainment Software Assn.

Grabbing and maintaining that turf has required some savvy moves. When Skunk started, it was one of the first small, independent casual-game makers. Now its facing competition both from the industry giants--Electronic Arts (ERTS ), Microsoft (MSFT ), Yahoo! (YHOO )--and growing independents, such as PopCap Games Inc. and Sandlot Studios. To boost visibility, Skunk partnered with RealNetworks in 2004, allowing Skunk to offer casual games from other developers on its own site. The goal was to turn Skunk's site into a hub for casual gamers and to increase awareness of its titles. The strategy has boosted downloads of Skunk's titles by 565%.

Then there's the matter of protecting Skunk's intellectual property--an especially formidable challenge in the game industry, where competitors often rip off one another's characters and promote them with bigger marketing budgets or simply riff on a popular concept, like Skunk's Arctic bowling. Wallace starts with a simple e-mail. If that doesn't work, she calls the offender herself. "I try to reach out warmly," she says, "because these game developers might one day be colleagues." If all else fails, it's time for a cease-and-desist letter. Every now and then, even the kinder face of video games needs to call in the big guns.

By Reena Jana

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