Weekend Feature: The How of Habbo Hotel

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Habbo.comHow did a small Finnish company create an online world which now boasts the largest current active user base in Europe and North America (about 6.5 million)*, far larger than World of Warcraft (around 4.5 million, not counting its Chinese audience)? Last week, Sulka Haro of Sulake Labs flew all the way to the Game Developer Conference in Austin, Texas to explain how the teen-oriented, Shockwave-driven Habbo Hotel has grown from a tiny 2.5D space of two rooms into a massive place that last year made an estimated $77 million in annual revenue. (Much smaller earnings than Blizzard’s WoW, to be sure, but then, Sulake has a staff of just 300 to Blizzard’s 2700.)

Gamasutra was on hand to take great notes, which is a good thing, because very few developers reportedly attended Haro’s talk. (The phenomenal success of Habbo Hotel continues to be criminally under-appreciated by the game industry.) Reading Gamasutra’s coverage, I’ve gleaned five takeaways that strike me as most valuable. [digg=http://digg.com/gaming_news/The_How_of_Habbo_Hotel]

Old School Ages Better

Originally launched in 2000 as a two room space made to promote a Finish pop group, Sulake was surprised to find the place swamped by international players who couldn’t even speak the language; they retooled and expanded as Hotel Goldfish, then re-dubbed to become Habbo Hotel. Throughout that time, Habbo has retained the same look of blocky, pixel-heavy, 2.5D graphics.

“It’s actually served us pretty well,” says Haro. “If you think about 3D games from seven years ago they look pretty terrible. And the kids who play this game don’t even know what the word ‘retro’ means. It’s just another look to them.” Upgrading to 3D graphics (the game industry assumption) would have required enormous development costs, and by requiring a better computer to run, cut out much of their audience.

More Revenue Streams, not Less

Initially launched with premium SMS as a payment model for virtual furniture, Sulake had to tweak this scheme to prevent hacking, then when they went opened in UK in 2001, where few kids had cell phones back then, changed to selling virtual currency. They’ve added “rare item” sales, external advertising, and other revenue channels, and a wide variety of ways for kids to pay. This is in marked contrast to most other MMOs, which are generally tied to a single major stream. Not a good idea, especially when dealing with an international audience. “Credit cards and prepay cards are cool — but they just don’t cut it in the global market.”

Roll with the Churn

To me, the biggest surprise is just how many Habbo accounts have been created, in relation to active users: 80 million to 7.5 million. (Parenthetical: this is roughly the adoption rate of Second Life, which is 12-15%, and I suspect most other free account-driven worlds, too.) Haro evidently didn’t address Habbo’s high churn rate at GDC, but what’s striking is that it hasn’t mattered to its popularity. My guess is that the turnover is a necessary part of it, as kids experiment with numerous different avatars, before finding the community and the identity they want to stick with.

Different Countries Mean Different Audiences

Haro mentions a fascinating demographics analysis of players according to personality types (Rebels, Creatives, Achievers, Loners, Traditionals), and unsurprisingly, these vary according to nation. (The US has a lot of Achievers, and Japan, a lot of Loners.) This suggests that content and experience should be tweaked to cater to these types, and to national expectations around them. At one point, Habbo’s Japan area was swamped by Finns, leading to “a total catastrophe — the Japanese locked up their rooms and didn’t allow people in their rooms unless they had a Japanese name.” As a result, Sulake closed off the Japan region until its users had grown large enough not to feel overwhelmed by outsiders.

Another key demographic: Habbo is 51% boys and 49% girls, a rare gender parity that’s surely crucial to its success as a social game.

Think Play Space, Not Game

Haro calls Habbo a “gameless game”, adding “I’m very proud that we have this core gameplay without going out and killing monsters.” Instead, they’ve created a number of themed rooms and let the players devise their own games around them. Habbo users have joined together to run their own roleplay areas, and the company keeps a light hand on community management, because then, “the players forget that the player-created content is the core of the world.”

The reason this has worked so well, he speculates, is because it serves a deep need for adolescents. “If you look, little kids will play for hours… but teenagers are reaching the age where that’s not socially allowed anymore. We’re providing an environment where that’s OK.” (Also a philosophy behind Gaia Online, the US-based teen MMO showing amazing growth.)

If there’s anything more interesting than the actual Habbo Hotel talk, it’s who didn’t really attend it: the game industry. GDC is the preeminent conference for both the creative and business sides of it, but according to several attendees, Haro’s presentation attracted but a tiny audience, especially compared to a re-tread presentation on WoW, which was packed. “It was downright shameful how few people were at this keynote,” veteran game designer Raph Koster moans on his blog. Koster has been the industry’s biggest advocate of merging 2.0 principles to games, but he’s still a largely solitary figure. “This was stuff that the crowd here needed to hear.”

“Most of us are slow,” fellow MMO vet designer Scott “Lum the Mad” Jennings acknowledges in his own worthy GDC wrap-up. “We obsess over what the big news was last year, much like hidebound militaries that always train to fight the war that they just got finished with.” By that logic, maybe the industry will be ready to hear about Habbo Hotel in 2008– but as I’ve argued, it’s probably way too late for them already.

* The Gamasutra post puts Habbo at 7.5 million active users; in May, it was 7.9 million, largely from the EU and North America, with about a million, interestingly enough, from Latin America. See image, from Habbo spokeswoman Susan Mills.

Image credit: Habbo.com

habbo-active-users.png

34 Comments

Hattie

Heyy, ive been playing habbo since the age of seven yerh i no i shouldnt of been LOL. but my m8 showed me it she is older than me. im still on it now. i have the 2006 christmas badge on my account. i never get bored of habbo. Its the best. You probz dont believe me but i have. If you dont search doctor-who-girl and go on the homepage. (im on http://www.habbo.co.uk not .com) Dont blame me for the name, i was onlii seven. LOL. i have a new account now so search .:=snake=:. :) ive been on for ages. i was on b4 2006. the old habbo was so much better it had like 10,000 people on every day now it has like 4,000 still a lot, but nothing compared to what it was then. It laggs and doesnt work on AOL still, i play it. :)

sacha

Hi
i have been playing habbo for 2 years nearly 3 now and i love it
i dj on habbo fansites and chat to people
its really fun
yet addictive
i spend so much money on credits
and then have to give them away for prizes wich kinda sux but seeing a listner happy is the best feeling ever
but yea im glad they made habbo
its really fun :)

fatima.girl

hay habbo is great but i think da owner should give me fatima.girl habbo name free furnis coz u can get hacked by people and then u av no funris it is no fun with out furnis bu[t habbo i

agentnice

people might say its a scam but its not. i did it 5 times a day and after one moth i had lots of coins.

agentnice

if you dont have an account make one for free then get the coins and read the info in the habbo page called new?.

agentnice

Go to habbo us and go to get more coins, then click on the cell phone. to get habbo coins call 0901 364 0030 then when she says to put your id dont put yours, put this number: 14349293. then when she says if you have permission, press 1. when the call ends you will get 10 coins for free + one furiture. do it 5 times one call straight after the other and you will get 100 coins for free + 50 furnitures.

Bart

Talk about criminally overlooked, check out http://www.faketown.com

View my profile at http://www.faketown.com/Bart

Its like Habbo but more “aged-up” with integrated social networking and user generated content (music, photos, and animations can be created in the multi-user environment using integrated tools).

Arguably more accessible and engaging, Faketown is a place where you can design your own identity in an 8-bit virtual world.

John Coate

I was ‘Brojo’ the first ‘hotel manager’ for habbo Hotel USA. I basically set it up and got it running. It’s a smart model and one that has evolved with the times. Early on community management was more controlling. There are reasons for this of course – protecting minors from abuse online is crucial. But with the popularity of MySpace they altered their approach to allowing the players even more ways to express themselves without so much adult supervision. Extemely clever. I know Sulka Haro quite well – a great guy and a brilliant programmer.

Raymond Padilla

I played with Habbo Hotel years ago–got bored and never looked at it again.

The author of the Gamasutra article is one of the best in the business.

Verbl Kint

Thanks to this article appearing on techmeme, there will probably be dozens of local copycats in many places of the world.

Dave

I sure would like to know how their $77 million in revenue breaks down. Has anyone made that sort of data public?

Martin

I registered at Habbo about seven years ago and tried it out for some weeks. Then I left and never came back. For a web service that is as old as Habbo the high number of created but inactive accounts is not very surprising since people who used it back in 2001 probably are not doing this anymore.

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