Does it pay to be nice? Winster.com, a San Mateo-based social gaming website that encourages players to help each other win and build strong social relationships, is betting on it.
“Whenever you deliver value there is always a way to monetize that,” says veteran entrepreneur and Winster CEO Jerry Kaplan.
Winster's customers are a group that is least likely to come to mind when we talk online games: they are mostly older women, many of them socially isolated or incapacitated and looking for friends to hang out with.
“For some people it's very casual but for others it's a lifeline to a community of supportive people who help get them through difficult challenges and times,” says Kaplan.
It all started a decade ago when Winster.com's co-founder and Kaplan's wife Michelle Kaplan, took breaks from her child-care duties to play a game of double solitaire online. As much as she enjoyed the competitive spirit, the constant swearing and intimidation put her off.
“I just wanted to have a nice time,” recalls Michelle, who is also the game site's mascot and narrative in her online avatar as Winnie Winster.
In her desire for a friendly online game, Kaplan – wised by a string of spectacular entrepreneurial successes and failures – envisioned his next start-up: an online gaming site that allows for all its players to be winners. And so, in 2004, Winster.com was born.
Today, Winster.com offers 10 social games that allow players to help each other win points and redeem them for prizes like Amazon or Walmart gift cards, Fandango movie tickets and magazine subscriptions, even as they simultaneously chat with each other and make friends.
For Michelle, Winster games became a combination of what she liked most during her home-bound days: a good online game and a forum to chat with people going through similar experiences in life. “It is pretty much exactly what I would have wanted at that time,” says Michelle.
A New Market
When Winster.com launched, Kaplan had expected the site to attract players like his wife: middle-aged home-bound women looking to play fun games sans the vituperation. The market took Winster there and further: Fifty percent of Winster users are over 50 years of age and 80 percent of all players are female.
Many of Winster's players have limited mobility or opportunity to socialize either due to age, illness or social circumstances, making the site's social side a perfect hangout. To accommodate its clientele, Winster allows for its players to drop in and out of games easily and without penalty, says Kaplan.
Winster, then, is going for the demography that would most benefit from social games: women and the elderly. Studies of online gaming behavior reveal that more women than men play to socialize, and they are likely to be middle-aged or older women.
While many such social gaming companies – like Zynga and Wooga, who are raking in millions in venture cap funding and user base– largely rely on social networking sites like Facebook, Winster hopes to develop a player base independent of other social networking sites and distinguish itself as the only gaming site that almost requires a player to be friendly and cooperative: swearing is likely to get you thrown out.
Winster's focus on facilitating the social aspects of the games is becoming its core attraction. Stories abound about how Winster's social network has helped its players overcome difficult and challenging phases of their lives.
“It is a wonderful escape,” says 71-year-old Judith Jewell of Lee's Summit, Missouri, of Winster games.
Jewell, a retired special education teacher, cares for her Alzheimer's-stricken mother who is now in a nursing home.
“If you get depressed, you tend to feel it most at night,” she recalls of her days when she was caring for both her sick parents.
An extrovert, she is also a night owl playing Winster games into the wee hours, but she has never played for prizes.
“This is like going into a room with people you know, but you really don't know them. I have Winster friends all over the country.”
“There is a social good there. That is actually a bit different,” says Pat Kenealy of San Francisco-based venture capital firm IDG Ventures, which invested about $3 million in Winster.com last year.
He says the company's success lies in understanding its unique clientele better than anybody else.
“It is trying to prove out a brand new market of audience.”
If done right, Winster games could go the way for women as poker did for men online. “It's not always about the money. It's an excuse to chat,” he says of games like poker and bingo.
Easy games pose curious challenges
“The simpler we made the games, the happier the audience was,” says Kaplan.
Slot Social, an online variation of a slot machine, is one of Winster's most popular games. But creating a social game where players are constantly interacting with each other real time poses a tough technical challenge, says Kaplan.
Unlike a lot of other social games that are turn-based, Winster games are meant to be synchronous, where more than one player may try to do the same thing at the same time.
Kaplan says he was surprised how hard it was to simulate a face-to-face interaction online.
Just as tough as trying to explain the concept to potential customers. So Winster started looking for other things that potential users likely to enjoy Winster games, also like.
For example, says Kaplan, “It turns out that our audience likes cats with bow ties so we'll have a picture of a cat with a bow tie and we'll say come play with me and they'll click over and we'll get our audience.”
Small is beautiful
Winster's figures are modest compared with the multi-millions other social gaming are raking in: It has three million registered users and has raised under $5 million in funding so far (US Venture Partners were Winster's first funders in 2007 with about $1.5 million).
The company is occasionally profitable and depends on advertising, club membership fees (which are under $10 a month) and virtual goods sales for its revenues.
But Kaplan says a site like Winster.com doesn't need a whole lot of money to run, and its audience is loyal. “We have members dating back 2007. It is a very sticky site.”
Winster.com is also planning to organize brand-sponsored online events, so players get some free play and sponsoring companies get their eyeballs.
Learning from his past entrepreneurial experiences with GO Corp., OnSale.com and Egghead.com, Kaplan, this time around, plans to keep it lean. Winster's modest San Mateo office is home to all of 11 employees.
“There is only one rule that is a constant in starting a company and this is don't run out of cash...And we've done a good job of that.”