toy story pixar

Pixar.com

Voices


“WTF, are you serious? How does RockYou still have cash?”

That was one of the more entertaining Twitter responses after news broke last month that we had acquired three games from Disney Interactive/Playdom. But it’s been years since the top social game publishers were regularly ballyhooed in the tech press, so it wasn’t a surprising question. Since then, as many prominent Facebook games saw waning growth, Silicon Valley and the game industry have largely turned their attention away from the social network as a platform, instead focusing on mobile and mobile’s top publishers.

That’s understandable, but in the transition, my fear is that the industry is overlooking a key point: If we only focus on megahit games, publishers and platforms, we are doomed to an endless cycle of disappointment — and in the process, abandon vast fortunes in potential revenue.

Here’s what I mean:

Mobile is just as hit-driven, if not more so, than online

Top mobile publishers like King and SuperCell deserve a lot of praise for their fortunes, but their high revenue often blinds industry observers to the fact that very, very few games will ever come close to the profits of a Clash of Clans or Candy Crush — even those made by the publishers of megahits. Blessed by an alchemy of art, talent and timing, a handful of games can indeed become blockbusters — but so far, when it comes to maintaining a long-term track record, there is no Pixar of games (see Rovio’s Angry Birds versus Rovio’s follow-up, Amazing Alex). What’s worse, even the megahits decline over time, once continued spend to support new user acquisition becomes unsustainable.

Which takes me to my next point:

Millions of players — and dollars — are left on the table

During the peak hype around Facebook games, we saw the hugest hits exceed 100 million players. This inflated the industry’s expectations around revenue — and the industry’s disappointment, when these usage numbers proved unsustainable once ad spend became unprofitable.

But years after Silicon Valley looked away, a funny thing was happening:

By the millions, the players of these games kept playing them. And all too often, as Facebook publishers desperately pivoted to mobile in search of more revenue and users, they underestimated the value of their existing player base, and the passion they have for the games they’ve loved for years. Consequently, rather than work on solutions to create sustainable revenue models on Facebook — or for that matter, games on the Web, which also maintain large user bases — the industry has largely shifted to mobile.

While the allure of mobile is easy to understand, I can’t overstate how much money has been left on the table for those that understand how to harvest a title. Millions of active but under-monetized Facebook and Web gamers potentially translates into hundreds of millions of missed dollars in yearly revenue for the industry.

Moving past the megahit mindset

With top mobile publishers taking a hit on the stock market recently, we now see the social game cycle repeating itself. If past history is a guide, building a hit will become even harder as discovery becomes more expensive. In contrast, there are many established mobile franchises that will sustain profitable user bases for years — just look at the Diner Dash franchise from PlayFirst. Glu Mobile acquired a brand that is years old, still drives revenue, and maintains a very large and loyal U.S. user base that can be leveraged to extend the franchise.

So, as we realize we are seeing the same movie, I want to make a case for some collective soul-searching about who we are as an industry:

We can no longer be solely about our megahits, nor justify our existence to the market on these black swans. If Hollywood and TV studios depended only on their occasional blockbusters, they’d have been out of business decades ago. Instead, we must invest not just on making the next megahits, but bring as much creativity and capital to fostering new revenue solutions for our existing games — not just for months, but for years after launching. “The Mary Tyler Moore Show” is more than 40 years old, and still enjoys a tidy trickle of ad dollars on Hulu. Shouldn’t we expect at least as much longevity from Facebook games that aren’t even five years old?

Oh, and to answer that Twitter question up top: We’re doing fine, thanks for asking. And thanks to a new model, we’ve actually been very profitable since last year. But then again, that’s probably true of many other companies that got their start in social gaming. The question is when the rest of the industry will take the time to notice — and instead of chasing after a new audience, shift its attention back to the fans it already has.

Lisa Marino is CEO of RockYou, home to the largest and best-monetized cross-platform video ad network for classic games. Reach her at lisa@rockyou.com.



4 comments
ASmitt
ASmitt

Maysam, whilst I appreciate your point and I'm sure you feel like Rockyou are providing something positive to gaming, they're not. Having a 'loyal fanbase' is not an indicator of the quality of your games. I have given you the benefit of the doubt and actually played two of them, Army Attack and Zoo World 2, I stand by my statement. Buying up the husks of formally popular web games may suit RockYou for now, but sadly you're squeezing the last few drops of milk from a dying cow. 


Only time will tell I guess. 


Also, could you please point out for me where Ken Levine says he's a fan of Army Attack? All I've been able to find is a blog post where someone says he saw Ken Levine in a game when it first launched 3 years ago. 

Maysam Sadeghi
Maysam Sadeghi

Hi, I run RockYou's game division, and wanted to briefly address some reader comments that aren't quite accurate: As Lisa suggests in her post, we only work with high quality games that continue to have a passionate fanbase years after launching. To take just one example, we recently acquired Army Attack, a turn-based strategy game which was nominated as best social game of the year by AIAS and counts fans like BioShock creator Ken Levine. We're really proud of all our games and the communities who love them. In fact, when we announced adding three games from Playdom/Disney Interactive, our blog was inundated by fans of those games and others, which was hugely gratifying -- check out the comment thread of this post here: http://rockyou.com/players-of-gardens-of-time-words-of-wonder-and-city-girl-welcome-to-the-rockyou-community/

colinrobertson
colinrobertson

While I think there's something to be said about getting away from the mega-hit mindset in gaming (it's not sustainable anymore), I have to agree with ASmitt, Facebook games are not the answer.

Unless the platform for these kind of games radically changes, they will never be anything more than what they are now. No one wants to spend money on them, and many find them to be nothing more than a nuisance. Also, what self-respecting developer wants to spend time making this junk?

What we should be focused on is making games for less money and making being a game developer a more sustainable career.

ASmitt
ASmitt

This argument sounds completely self-serving. Social web games as a whole are dreadfully designed junk. Their entire reason for being is to ensure players come back and not the actual experience itself. 


The reason they were short-lived is because once the virtual currency driven, awful game mechanics are exposed, people tire of them and move on. 


To compare the Mary Tyler Moore Show to Mafia Wars is outright foolish. We already have a real equivalent. It's Super Mario World which is still beloved and still gets a steady stream of revenue through Nintendo's E-Shop. It's thoughtful, player first, incredibly crafted levels gave it a long tail.


I think the reason that person on Twitter was surprised that RockYou exists is less through disbelief but more through hope. We need less Zyngas, Kings and Gameduells and more real game developers like those currently in the indie scene.


Sorry Lisa, for those who love gaming, the slow rot of social web games is a good thing. Make hay while you can.

Follow

Get every new post delivered to your Inbox.

Join 287,081 other followers