Days of Wonder CEO explains how iPad Ticket to Ride boosted sales of the real thing
Eric Hautemont is the founder and CEO of Days of Wonder, the board game company that launched Small World, Ticket to Ride, and a selection of other popular games. He made a rhetorical bet with me: if I invited a group of people over to my house to play Ticket to Ride, at least a few of them would have a good time playing the game and would then go out and buy their own copy to play with their spouse, children, or other groups of friends. He also said that if he were to simply give a copy of Ticket to Ride to the same person, the game would most likely remain in its shrink wrap for years, unloved in a closet. “People enjoy playing board games a great deal, but they do not enjoy learning a new board game by themselves,” Hautemont told the Penny Arcade Report. The challenge is to create players that will teach their friends the rules, thus spreading the reach of the games Days of Wonder releases. Many game companies do this by hosting events or showing off their games in toy stores or hobby shops, but Days of Wonder had a background in software development… and loftier ambitions. To explain all this, we have to start at the beginning. Days of Wonder is the result of someone deciding they cared less about money, and more about their legacy.
What good is money if the product doesn’t last?
Eric Hautemont began a 3D graphics company called Ray Dream, and later sold that company for approximately $50 million. Years later he was invited to re-purchase his technology for a symbolic dollar. He had money and success, but that dollar taught him a lesson about the tech business: it’s very hard to create a product that people love, or a company that endures. “High tech is always run, run, run, run, you don’t have the time to ever stop because the competition is always so intense,” he said. “And there’s only a handful of technologies that can endure and be lasting businesses.” He thought of Hasbro, a company which is run by the founder's great-grandson. He stressed that he didn’t want to push his children into any particular business, yet the idea of a company that could stay in a family for that long was appealing. “I wanted to build a business that maybe wouldn’t grow as fast, but could stand the test of time,” he explained, and he already had a respect for board games. Days of Wonder was born in 2002 with the goal of creating board games that people would love for years. Hautemont wanted to create a company that would be known for quality and fun. The pace of the board game business was glacial compared to the tech business, but it was a trick of perspective; other companies in board gaming thought Days of Wonder moved at lightning speed due to its years in the tech sector. The company was nothing if not ambitious, and they began to wonder why the market was still dominated by 70 year-old games. “Monopoly was still the most popular game, and we started wondering why that was the case,” Hautemont said. They decided Monopoly remained popular because people grew up with it; it was taught to them as children. It’s rare to find board game enthusiasts or designers with kind words for Monopoly, but the game’s momentum seemed unstoppable. People bought it because they knew how to play it. There had to be a way to create an army of people who knew how to play Days of Wonder games, and to share those games with friends the way Monopoly was shared. The solution to this problem, oddly enough, came from Steve Jobs.
If you love the game, you’ll buy it… over and over
Hautemont stressed that his business strategies only work when you begin with a good game; everything relies on the product itself to be fun for the players. Days of Wonder had already found success in the board game market and had a number of great games, but now the challenge was to “ensure the largest amount of people at the lowest possible cost in the shortest possible time get to know the games and understand how to play them.” Days of Wonder had already realized the strengths of digital gaming by the time the iPad was released. Digital versions of board games removed the challenges of distribution, since people could just download the program. You ensured that people learned how to play the right way, since the computer wouldn’t let players make the wrong move. The program could explain each turn as it happened. You also removed the fear that players will embarrass themselves by not knowing how to play or that they may appear foolish in front of a large group. With a digital copy of a game, you can sit by yourself and master the game’s rules. Days of Wonder released a free browser-based version of Ticket to Ride, which became a monstrous success. People began playing as many as 40 hours a week, and the company realized that while they were giving the product away as a promotion and a teaching tool, the possibility was there to make a profit from the product. By selling the program they could pay for the servers running the game, and offer a more refined and user-friendly experience. They continued to improve the browser-based version of the game while thinking these issues over, and then Steve Jobs introduced the iPad. “With the iPad, the one thing people didn’t pay attention to during [the announcement], was that the beauty of the device is that you could forget about it. Meaning that when you put an iPad between two players, the screen is so well done that you almost forget there are electronics behind that.” The touch screen was just as intuitive as playing a standard board game, Hautemont explained, and provided a much better experience than two people sitting in front of a computer. With a board game on the iPad, you can share the hardware on a couch between two or more players and it became much more natural and convenient. Days of Wonder knew it had to have a version of one of its games available for the product’s launch. They settled on the first game quickly. Small World was graphically rich, and there was almost no hidden information that would require multiple screens, making it a good fit for people to play together using an iPad. Days of Wonder began developing the game without the benefit of an iPad for testing; they used an iMac resting on its back to try to simulate the look and feel of the iPad’s screen. Small World on the iPad was developed in-house, by the people who understood what made the original special. The game launched at $6.99 when the iPad was released, and both the device and the game became instant successes. Days of Wonder had found a way to create its army of evangelists. The game was already profitable for Days of Wonder at $6.99, but the company wasn’t aiming only for profit. The goal was to push sales of the physical product by teaching people to play the game on their iPad. Once gamers learned the rules, fell in love with the game, and became comfortable playing, they may decide to buy the physical board game at a much higher price. Days of Wonder differs from most other board game manufacturers in that the company uses a sophisticated system to track the shipments and sales of its games worldwide, and they watched this data closely after the launch of Small World. The impact of the game was hard to deny: in a few short weeks sales of the physical game increased by approximately 40 percent. The company followed Small World with a digital version of Ticket to Ride, released early last year. The game was once again developed in-house, with the graphics and presentation being treated with great care, and the $6.99 app quickly became another huge success. Sales of the board game jumped 30 percent. The model doesn’t end there, as Days of Wonder then released a version of the game for the iPhone. This version sold for only $0.99. In a surprise twist, the release of the iPhone version of the game caused sales of the more expensive iPad version of the game to quadruple. So gamers were making an impulse buy of the iPhone game, liking it enough to want the $7 iPad version, and they would then decide they wanted to own a copy of the actual board game to play with their friends. By the time the iPhone version of Ticket to Ride was released, Days of Wonder saw an astounding 70 percent jump in sales of the physical board game. Hautemont laughed when I described this system as an inverted funnel, sucking people up at the lowest possible price point and guiding them to the more expensive board game. “It works both ways!” he exclaimed in glee. Gamers that have purchased the physical board game are much more likely to buy a version of the game for their iPad, and then want an even more portable version for their iPhone. Players tend to buy multiple copies of the game for their home and portable devices, and that works whether the board game or the digital version is their point of entry. The way Days of Wonder has managed to close the loop of digital sales is incredibly savvy. The company already enjoyed a huge installed base of players who were hungry for a portable version when Ticket to Ride launched on the App Store, and that allowed the company to post impressive day-one sales of the app and climb up the charts, which then made it easier for others to find the game, fall in love with it, and then ultimately buy the physical board game. Ticket to Ride was the third most popular game on the US App Store upon launch, and soon Apple made the game the App of the Week. Ticket to Ride has stayed consistently in the top 100 apps in the United States, and has proven to be immensely profitable for Days of Wonder. Another plus is the ease of upgrading the game: for a small cost you can add more content to the game through in-app purchases, instead of having to drive to your local game store to buy the expansion for the board game. While the app may sell for $6.99, Hautemont estimates that many players will spend as much as $15 after purchasing additional content. The designer of the game even created a digital-only expansion called Ticket to Ride Switzerland as a bonus to the fans of the iPad game, but the content ended up being printed as a physical expansion for the board game due to demands for the content from fans of the board game. “We became so popular on the iPad because we started with such a large installed base of the board game, and because we’re so popular on the iPad, we can increase the speed of the sell-through on the board game side. Those two things snowball together,” Hautemont explained. He said that they offer a link to the board game through the app, and he understands that Apple won’t sell anything that’s out of their control in terms of physical fulfillment, but he dreams of a time when gamers could buy the game the same way they buy expansions: by using their credit card on file with Apple. Hautemont knows the power of the games Days of Wonder sells, and he knows that the easier they make it to buy the physical game while people are playing the digital version, the more units they’d move. “I think we could give Apple its usual 30 percent on the sales of the physical board game, and we’d still sell even more,” he told the Penny Arcade Report. Again, this only works with great games: Days of Wonder bet on digital because the company understood that once gamers saw and understood the fun they could have with their games, no matter the medium, they’d want to invest in the permanence of a physical board and pieces. And those games will remain in the houses of happy gamers for years, finally giving Hautemont the legacy that he craved.