FLASHBACK: Club Penguin founder’s big plans for future

By now, everyone has heard about Canada's latest interactive media success story. On August 1, Kelowna BC-based Club Penguin, an avatar-driven site for preschool-aged kids up to ‘tweens, was sold to The Walt Disney Co. for US$350 million cash, plus a possible $350-million earn-out over the next two years.In this excerpted interview from November 2005 - just a month after the site's launch - co-founder Lane Merrifield talks about the things that make Club Penguin unique in his mind, including the nascent online world's sophisticated system for ensuring the safety of young participants, and its egalitarian philosophy towards membership costs.CNM: The whole idea of Club Penguin seems to be a bit like Habbo Hotel...LM: It is. One of the big departures we've done from Habbo Hotel is you actually have to buy each individual piece or item with real money. What we wanted to do was have more of an equilibrium: in real life, you've got the rich kids at school who have all the toys and all the cool stuff and nice clothes, and those who are less fortunate may not have as much, or may not be able to buy as much.We wanted something where even if someone couldn't afford the membership, they could still send their kids to hang out at Club Penguin and they'd still reap all the same rewards and benefits. So, from that perspective kids are allowed to chat and interact throughout the world and engage with other people, they're able to play all of the games free, they're able to choose the colour of their penguin and also have an igloo free of charge. And then it's only when they get into customizing their penguin or customizing their igloo that they need to become members in order to do so.What about the games? Are they all developed in-house?They are. We've created every game from scratch. Some of our games, when we first started in Flash entertainment, were licensed to other websites. Some kids have noticed that they've been on other websites - Ballistic Biscuit is one of our oldest games - so it's been used on some other sites. But all of them have been developed in-house by us.How many users do you have now?Well, we've been launched publicly for about a month, and we have in terms of activated penguins - we don't call them users - we've just topped the 22,000 mark. We're pretty pleased, considering it's purely been word of mouth, and the one press release that was released on Friday.Are they mostly Canadian?No, actually it's a pretty big variety. The majority are from the U.S., but a close second and third are children from the UK and from Canada. We really have kids from all over the world. We host in-club events - we're going to be doing a Christmas party here coming closer to Christmas. It makes it terribly confusing, because we literally have to do something for every time zone throughout the world, which is a great problem to have. We're happy that word is spreading globally on this thing.Tell me a bit about the content filtering system you use...The filter system has been built up over the last three or four years using an older version of Penguin called Penguin Chat, which is one of the first versions that was built that was licensed to some different websites. In monitoring what was said, how it was said, you start to figure out patterns of ways that people are bypassing filters, and so what we were able to do was basically learn from those patterns, stay one step ahead of it, and build in filtering systems that can catch those patterns. We've spent the majority of our R&D time on the safety aspect of it.We understand it's not going to catch everything, but we have human moderators that we hire to monitor it as well, and also to learn new methods or new techniques that might be coming out, so that we can proactively continue to expand our filtering system.The moderators are adults?Yes, they're adults who are hired based on their experience and their passion for kids. A lot of them have worked in the pre-school and daycare systems, a lot of them know a lot of the slang and a lot of the lingo, so that they're able to monitor appropriately. And, obviously, being parents ourselves we want to find people who are oftentimes parents as well: they just have a certain element of wanting to take care of kids, if they can relate them to their own children.How do you keep other adults out?The filtering and moderation system is a big part of it. The filter goes beyond swear words - it includes words like ‘address', ‘phone number', it doesn't allow them to actually put more than a certain sequence of numbers together, so they would have to be extremely creative and literally almost cryptic in order to try and exchange that type of information. The point is to make it as difficult and as frustrating as possible for anyone to try and prey on young kids. The reality is there are thousands of other websites that are far less filtered and far less moderated that they can get to more readily.It also keeps potential adults who might want to prey on young children from even being able to figure out what's getting through and what isn't. They can't test the filter to see what's breaking through. And, our moderators are able to see everything that's even being attempted to be said. So we'll oftentimes ban people or ban children who we can see are just trying to get through the filter, regardless of whether or not anything even breaks through.What's the difference between Open Chat and Easy Chat?Open Chat allows them to type in text; Easy Chat is purely menu-driven. Easy Chat we recommend for the youngest players, number one because it's the ultimate form of safety, but also just because a lot of them can't type very fast. They can read a lot faster than they can type a message, so it allows them to communicate faster without having to have the typing skills to be able to hold a conversation.What we did with Easy Chat is we basically looked at the top 150 things people were saying and chatting about, and just incorporated those into a safe, menu-driven system, similar to your Start menu on a Windows computer. You start off with broad terms like greetings, goodbyes, questions, answers, those types of things. You continue to scroll and expand out the menu to give you even more details. Under questions, for instance, you may click on questions, and then click on the question ‘What's your favorite animal?', and then that next person can click on the Easy Chat button and go on answers, choose animal, and then get a list of different animals: dog, cat, raccoon, squirrel, penguin, all come up.So it's all predefined, predetermined. People who are selected onto the Easy Chat can only see what other Easy Chatters are saying, so there's no way for them to even see what other people on Open Chat are saying. So they can still participate in games with other players, they can still participate and navigate the world with other players, but as far as they're concerned people just aren't saying all that much, other than through the Easy Chat method.Where do you see it going in 2006?We're adding a game a month right now, and we hope to be able to push that up to two games a month eventually. We come out with new furniture and igloo catalogues every month, we've got all sorts of different events running, and so from an entertainment perspective it really is changing every week, sometimes two or three times a week - we'll do different updates or elements. You don't want it to get stale or stagnant. Oftentimes parents will spend $50 or $60 on a console game, an Xbox or Playstation game, and their kids will play it and be extremely entertained for a month or two and then it ends up on a shelf somewhere. Our annual membership is at that same price point, at US$57.99 for one year and we wanted to create something that is changing frequently enough that they're going to continue to use it throughout that entire year process. So, from a value perspective it's there.Are the majority paying members?No, not the majority. The majority of sites out there, like I said, they are time-limited. You can play for three days, or you can play for seven days, or they'll tease you by giving you all the membership opportunities and then pulling them away after a certain number of days. We weren't interested in that. We allow to earn coins whether they're a member or not, within the game. We wanted them to essentially not be disciplined for not being a member - we wanted them to feel like they were still earning the coins and everything else, they just need to become a member if they choose to spend those coins on customization.We really wanted to make it affordable for those who are able to become members and choose to become members, but also practical for those who don't and still not limit people because they can't afford to become members or choose not to become members.Do you have plans to create similar communities for other demographics?We do, and we've got a few things that we've already begun looking at and doing some research on. Right now, obviously, having just launched this site most of our focus is on it, but we understand that there's a life cycle to everything, and we hope to have something in its place at some point in its life cycle to replace it or add onto it for an older demographic soon. But right now there's a lot of players in the older demographic field that are doing a great job, so we're OK with allowing them to continue doing a great job for that older demographic. For us, maybe when our kids are teenagers we'll be more focused on that, but right now our kids are younger so we wanted to create something where they feel comfortable and safe."

FLASHBACK: Club Penguin founder’s big plans for future

Broadcast | August 7, 2007

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