BF: We've come a long way from Atari which was 25 years ago and you have been in the gaming industry for quite some time. You started Xfire back in 2003. Six years ago, it was a completely different world. What was the video gaming market like back then?
DF: When we started Xfire, the gaming world was very, very different. So back in 2003, World Of Warcraft, Guitar Hero, and even Facebook didn't exist. Online gaming was predominantly played on a PC. Consoles weren't online back then.
BF: But Xbox existed then, right?
DF: You had Xbox, but it was just getting going. It wasn't that popular at the time. And so, the gaming world, as it relates to playing with other people, was about playing games like Counter-Strike, certain hardcore games.
BF: Playing against the computer, right? Not against each other?
DF: No, actually it was multi-player, which started back in 1994, which was when I first started getting into games. I was around 15 years old. The audience tended to be more male dominated and techIe type of people. So we built Xfire as a tool to help those type of gamers play together. So Xfire was an instant messenger designed for these type of gamers.
BF: So when they downloaded the game, they could just email or instant message each other.
DF: Well, the big challenge at the time was that PC games were full-screen applications that run in a window. You get the entire full screen experience. The problem is that if you have the AOL Instant messenger, when you got a message, it would blink, and then it would crash your game. So that is why we built Xfire. Initially, it was built because when you play games, you want an alter ego. My handle was Thrush. So, when I'm logged in as my alter ego, I'd log into Xfire. For other instant messages, I'd log into a regular IM.
BF: That was successful. You sold it for $100 million. So what is the environment like today, given all of these new applications that are out here like Facebook?
DF: So one of the big changes that has happened over the years is that gaming has become much more mainstream. Frankly, it was a little mainstream, but it felt a little underground. Whereas now you probably won't find anyone under 18 that doesn't play these games. Kids start an early age and continue to play. Partly because of the things like the Wii, which is in every household now, to the Xbox which makes it a lot easier to play games because PC games in general require you to be somewhat tech savvy. Every PC is different, so you always have to download drivers, whereas Xbox, you can throw a game in and start playing right away. Then of course things like Facebook and social gaming, and flash games, are really lightweight casual games that anyone can get into because it is one big virtual world. As a result, gaming has become much more mainstream. And, as a result, Xfire, which is the heart and soul of the uber-PC gamer didn't really quite evolve with the times. So part of the reason why I created Raptr is to address "gaming 2.0," the new, more social games.
BF: So it's allowing the casual gamers to connect, communicate, and recommend games to one another.
DF: So at the heart, gaming is social. I think that's a misconception with many people.
BF: I play Solitaire by myself.
DF: Well, outside of Solitaire you may be playing alone in a room on your computer, but you are playing with hundreds of people and typically, it would be with friends. So these games are social and even single player games are social. Because if people get a high score in a game, they want to share that with their friends because they want to compare their scores with one another.
BF: We already see that you can play with multiple people and several are on social networks now. Is there anything else that you see such as a change in the way people are playing games?
DF: One of the things social gaming has done, such as Zynga and SGN, is that they have hooked in directly into the existing social graph. Whereas, a game of World of Warcraft, you have to recreate your social graph. In many ways, what Raptr does is we are trying to bridge those two worlds where you have these traditional games that are still played by millions of people. World of Warcraft has more than 15 million people playing globally that pay $15 a month, or $60 to buy the game off the shelf. We're trying to tie the social graph on social networks with the social networks for the traditional games.
BF: That is one ambitious goal and that is why you have raised $12 millon. So, stick around for the second part of this interview where we'll talk about how Raptr is going to make money and give its investors a return on their investment.