Digital Chocolate CEO outlines mobile, social attack plan

When Trip Hawkins, current CEO of Digital Chocolate and founder of Electronic Arts, tells you he’s launching something based on his own patents that he’s been working on for more than 16 years, you’re going to be interested in whatever that is. If you’re a gamer or even just a mobile phone user, you’ll especially want to listen.

Hawkin’s new service, being introduced to Facebook gamers this week is what he has dubbed “Pokemon for grown-ups,” and it could revolutionize mobile gaming next.

Pokemon, a role-playing card and online game was a big hit in the '90s, second only to Mario in Nintendo’s most successful and lucrative games. Hawkins believes that adding social features – and some more mature themes – to the concept can help it take off with a much broader audience. Specifically, what he is introducing is the idea of a virtual good, something used only in one game, and making it a viral good that can cross into new games with a personality that morphs with it.

“Instead of using one game, these virtual characters, NanoStar characters, they turn into different things in different games,” said Hawkins, who has been outlining the company’s plans in his blog. “You can take your favorite characters with you as you cross boundaries in the games. The characters come to life differently.”

NanoStar Castles and NanoStar Siege are the first games to work with the virtual currencies, but Hawkins said around 10 more are planned this year. Another Facebook game, NanoTowns, is among the social network’s growing games. In total, Digital Chocolate has reached more than 1 million users on Facebook, and its fastest growing revenue stream is already virtual goods.

Each NanoStar characters costs the player around 75 cents or $2 to $4 for a pack of cards. They can be purchased with real currency or through completing free offers in an offer-completion network. For example, a company like Netflix could offer a free trial subscription in return for the user signing up with their e-mail address. But it’s a one-time deal. Next time the user will have to pay for the feature.

“A lot of times in a social game, people are at a level of engagement in the game where they can give a credit card number,” Hawkins said. "The offer completion network is a bridging method to help people get more comfortable with moving to payment. It’s coming to mobile phones now. It’s on some iPhone products and on Android. It will very helpful.”

Before Facebook, Digital Chocolate’s games had spread virally on the Web, creating awareness of the brand but not yet monetizing it. So, instead, the company has spent the past few years making a mobile push with games on Java and Brew-based platforms, as well as the iPhone, where Digital Chocolate has achieved more than 50 million downloads. Now Hawkins said he is shifting the focus back to social games and, with monetization in mind, Facebook was the clear place to start.

If Facebook, and Hawkin’s virtual character concept, is as successful as anticipated, he believes it could bring the company’s business full circle and help drive its mobile push. His goal is for consumers to treat games they same way they would voice, texting or e-mailing and expect it to be on any device they purchase. That being said, mobile is not quite ready for a gaming onslaught, he said.

“The mobile ecosystem is nowhere near as viral as something like Facebook,” Hawkins said. “You can get some of the vitality through the Facebook SDK, but that’s only available on the iPhone.” Facebook has indicated its intentions to go across platforms but hasn’t yet launched on all mobile phones. The launch of 40+ Android phones this year should also help Digital Chocolate’s push, Hawkins said, although it hinges on Android instituting a one-touch billing solution similar to the iPhone.

“What’s exciting for us right now about social games is how we think we can build up a beachhead on Facebook,” Hawkins said. “We are excited about the mobile side as more customers in the West get true mobile devices that are comparable to the devices that people have in Japan. … In the long run, there are several billion people with mobile phones. It will be a much bigger audience for us on mobile devices.”