Big Fish Sells Subscriptions to Its Games on the iPad

By Adam Satariano - Nov 23, 2011 12:01 PM GMT+0700

Apple Inc. (AAPL) is letting a video-game company offer its titles by subscription on the iPad, expanding the role of a feature typically used by magazine and newspaper publishers.

Big Fish Games, a Seattle-based game publisher, won approval from Apple to become the first to offer users access to dozens of titles for $6.99 a month. Until now, games have only been available one at a time, requiring users to download individual applications.

When Apple introduced its subscription feature earlier this year, Paul Thelen, the founder of Big Fish, saw it as an opportunity to offer an “all-you-can-eat” service. That lets players jump in and out of different games without having to make a bunch of downloads. While game-subscription services have a mixed record of success, the popularity of the iPad, along with the easy payment method provided by Apple’s App Store, will make the offering attractive, Thelen said.

“This is the first time that the technology has matched the business model,” he said.

The setup is similar to Netflix Inc. (NFLX)’s streaming application for the iPad. Subscribers can get unlimited access to games such as “Mystery Case Files” and the “Mahjong Towers” series from inside the Big Fish app.

Games played through the subscription service, which are streamed to a user’s iPad from Big Fish’s data centers, will initially require Wi-Fi access to play.

Android Next?

The company has designed the application in a way that it can easily be modified to work on smartphones or tablets running Google Inc. (GOOG)’s Android operating system, as well as Internet- connected televisions, Thelen said. An Android version should be ready by the first quarter, he said.

In addition to the subscription plan, Big Fish also will offer a free version of its game service that limits play to 30 minutes a day and includes advertising. The subscription will initially cost $4.99 and will increase early next year to $6.99 after more titles are added, Thelen said. Apple collects a 30 percent commission.

Big Fish, founded in 2002, generated $140 million in sales last year, mostly from games downloaded to a personal computer or mobile device. About 75 percent of its players are women over the age of 30, Thelen said.

The company is in a position to pursue an initial public offering, he said.

“We’re at scale, have great momentum and remain in a position to pursue a public offering or any number of alternatives if the markets allow,” Thelen said.

Even so, Apple wasn’t quickly convinced that a monthly fee would work for games, he said. Tom Neumayr, a spokesman for Apple in Cupertino, California, didn’t immediately respond to a request for comment.

“It took longer than usual to be approved,” Thelen said. “They needed to be convinced there’s a reason to charge customers every month.”

To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net