Big Fish Games plays social networking card to lure and keep customers

Web-only video game developer and merchant Big Fish Games posted $24.1 million in sales for 2006, up 180% from $8.6 million in 2005. 2006 sales growth came from a combination of aggressively exploring new ideas – such as social networking -- and then adding its own spin.

Big Fish’s sales increase for 2006 is a combination of explosive growth in new buyers and careful nurturing of existing customers and affiliates, says Paul Thelen, founder and CEO of the Seattle-based e-retailer, which is No. 271 in the Internet Retailer Top 500 Guide. Success on both fronts can be traced to the September launch of the company’s My Game Space social networking site. “A lot of our 2006 growth came in the last four months of the year. Without My Game Space it would have been noticeably less,” Thelen says.

Registered customers can use My Game Space to set up a web site – which they can personalize – and interact with other online gamers, write reviews and build favorite game lists. Customers, in turn, have shown they like Big Fish Games. The company says it serves more than 500,000 casual gaming customers daily at BigFishGames.com, where it offers more than 400 interactive and regular game titles. Customers have access to online and downloadable games accessible by subscription.

Big Fish’s foray into social networking results from its business model. “Big Fish has a hardcore focus on analytics-based marketing,” Thelen says. “Every month we have 15 or 20 different ways to spend money, then once we’ve invested in some we analyze how the projects returned on the investment. If they produce, we expand them aggressively. If not then we either change them or cut them out completely,” he adds.

Big Fish was mesmerized by the success of social networking sites such as MySpace and YouTube. “They were really taking off with almost no money spent as far as generating traffic,” Thelen says. But after conducting surveys and focus groups, Big Fish executives were shocked to find that their customers had a very different view of social networking than adolescents who like to see their own pictures online. For starters, Big Fish gamers rigidly oppose posting their photos online. “Almost 0% of our users participate in MySpace and YouTube. In our demographic 75% are over age 35 and 75% are female. They are not the MySpace crowd,” Thelen says.

Big Fish customers said they like keeping in touch with their friends and sharing their passion for casual video games, however, so the company decided to establish an online forum for exchanging such information. The project took 14 months to develop and since September, more than 250,000 customers have created their own online sites. And they have invited more than 1.3 million new customers to Big Fish Games, Thelen adds, more than half of which came in March and April.