How a small company is capturing a big audience in the casual gaming market.
It's a geek's dream come true. John Vechey dropped out of college in 1997 to work on a computer game with his pal Brian Fiete. This year, their Seattle-based game company, PopCap, which they founded in 2000 with Jason Kapalka, is on track to bring in $100 million. PopCap employs more than 300 and has offices in Shanghai, Seoul, and Dublin, with studios in San Francisco; Chicago; and Vancouver, British Columbia. The company's first of 35 games, Bejeweled, has sold more than 50 million units. PopCap's secret: Build games so accessible that anyone can play.
I grew up in Wisconsin. My dad's family worked in steel, but my parents were hippies. My dad taught me that it's not worth doing things you don't want to do -- he never worked more than a part-time job. For him, spending time with his friends, family, and women was more important than making money. He had priorities.
My parents got divorced when I was young. I lived with my mom and then moved to Indiana to live with my dad. I've had seven stepdads. My two half-siblings, though, are on my dad's side from his second marriage. He divorced again, and moved into my building in Seattle with my 16-year-old half-brother, who is at my place playing Xbox all the time. He plays all of our games before they're released.
I grew up pretty poor. I bond with anyone who has ever eaten government cheese. I never did extracurricular activities, because I always had a job. When I went to Purdue University, I met Brian Fiete in a programming class. I never had a computer growing up, but I wanted to be a computer engineer. Brian was always the first person done in class, and I was always second. I suggested we make a game together. It evolved into an online game we named ARC, based on an arcade version of paintball. At the time, my GPA was 1.67. I had to choose between working on this game or failing out of college. So I put all my energy into the game.
That was in 1997. People started playing our game online, and then someone named Warpig logged on and said, "Let's chat." That was Jason Kapalka, our third co-founder. He worked at a game company and wanted to license ARC.
We made $45,000, which, when you're 19 and from Indiana, feels like a million bucks. Meanwhile, some friends of the family were next-door neighbors with the founders of Sierra, a gaming company in Seattle. Someone at Sierra called us for an interview, and next thing we knew, Brian and I both left Indiana to work on games for Sierra. After we sold ARC to Sierra for $100,000, we left the company and used the money to start our own business with Jason.
It was not well thought out; more like, Let's live off ramen noodles, play games, and see what happens. We called our company Sexy Action Cool because we thought it was funny; plus, we thought we were going to develop games, not sell directly to the public. Jason and I were working on an animated PG-13 strip-poker game called Foxy Poker that had no nudity but was a really good game. We approached Strip-Poker.com, a porn site, and said, "Why don't you give us a bunch of money and sell our game?" They laughed and said no.
Then we created Bejeweled. I was in Indiana visiting family when I saw this simple solitaire game online -- no animation or graphics, but I thought it was cool. So I sent an e-mail to Brian and Jason with an idea for a game, which Brian created the next day using different colored circles. Jason sent a bunch of gem graphics on Day Three, and by Day Four, Bejeweled -- a really simple game where you match gems -- was done.
We tried to sell it to Pogo, the online gaming site. Yahoo didn't want it, either. We wound up making a flat-rate deal with Microsoft. It became phenomenally successful for MSN, with 60,000 users a day. But we were making only $1,500 a month.
Back then, in 2000, fans started asking for a downloadable version, because everyone was still using dial-up modems and didn't want to tie up their phone lines. So we made one, with better graphics and sound -- and charged for it. I had to convince Yahoo, MSN, and so on that people would play the free version on their sites and then download a better version for $20. And then we'd split the sale 50-50 with the host site. It was a new business model.
We launched in 2001 and made $35,000 the first month. The next month, we made $40,000. We were like, Holy crap! We're finally making money, but it won't last. So Brian and I hang out in Argentina and drink wine for four months. When Yahoo signed on, we moved back.
We didn't know anything about business, so we hired consultants who said, "We'll fix all your problems -- just pay us $100,000 and give us 3 percent of your company." That pissed us off -- if you don't play games, don't give advice on how to make games. They did get us to hire a comptroller. Before that, my aunt was doing the bookkeeping.
We decided from the start to make our games incredibly fun and easy so that they appeal to everyone. We currently have 35. We never think we have the magic formula or assume a hit. And yet every game we've done has made money. It took us three years to perfect Plants Vs. Zombies. We don't track the resources that go into each game. If it's a great game, it's worth a lot of money. If it's a B+ game, it's essentially worth zero.
In 2004, we had 15 employees and turned down a $60 million offer to buy our company. We knew we had to start taking the business side more seriously. So we hired David Roberts, our CEO. He had worked for Apple and Adobe, and he understood we wanted him to grow the business but leave the creative side alone.
When Dave started, we were focused on creating new games instead of supporting revenue streams from each game. Dave changed that. More than 30 percent of our annual revenue comes from Bejeweled, because it can be played on all these different platforms: PC/Mac, Xbox, PlayStation, Wii, DS, PalmPilot, iPhone, iPad, in-flight entertainment.
Jason and I interact a lot, and Jason and Brian interact a lot. Brian's working on a game with Jason, and Jason is also involved with the creative direction of the company. There's a power to three -- there's a constant rejiggering and shifting of opinions.
Facebook didn't even exist when we started the company. The iPhone didn't exist. We've adapted and changed and rolled with everything that's come our way. We've constantly integrated our approach to games. We're never perfect. We're always pretty good, but we're always trying to be better.
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