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I wanted to pass on my thoughts from my first Mobile World Congress. A few things this week particularly struck me.
The mobile sector is much larger than the game sector
As I mentioned, this is my first Mobile World Congress and I was expecting something comparable to E3 or GDC. What I got instead is a tradeshow an order of magnitude larger. Without looking at “official” numbers from either show (and I don’t much credence in those numbers), MWC is probably 2-5 times larger in terms of attendees and probably 10X larger in terms of floor space. This shows that mobile industry is huge (GSMA estimates a US$3.5 trillion mobile industry by 2020), dwarfing the game industry. Takeaway: The sheer size of the mobile space will make it a key, if not the key, future platform for social games (sorry Facebook and Google +).
The big buzz word is “cloud”
Cloud solutions are the greatest driver of buzz and activity in the mobile space. It was hard to go more than ten meters without seeing a service or product tied to the mobile cloud. It was by far the most talked about new “technology.” It was so prevalent I could swear I saw at the snack stand cloud donuts and coke cloud zero. Takeaway: Say cloud at least ten times during your next investor pitch.
The dead buzz phrase is “augmented reality”
While the cloud was everywhere, augmented reality generated virtually no interest. I think at the entire show, spanning eight halls, I saw at most three exhibits that even touched augmented reality. Takeaway: If you are seeking investment based on an augmented reality offering or building a product around it, pivot as soon as possible.
Microsoft and Nokia are giving Windows Mobile a fighting chance
I have always been a fan of Windows Mobile and love my Samsung Focus Flash, so I probably am a little biased but it is clear here that Microsoft and Nokia are throwing their substantial resources at making Windows a relevant mobile platform (and keeping Nokia a relevant handset manufacturer). Not only does Nokia have the largest exhibit at the show with presentation after presentation but you can’t go two feet without seeing a banner for a Windows Phone device. That said, almost everyone I talked to is dubious at best about the chances of Windows Phone becoming a relevant platform. I have not met a company yet making money on the platform. More importantly, Nokia’s decision to position its phone with a 41 megapixel (the Lumia 9000) at the forefront of its MWC publicity campaign shows a lack of understanding of the smartphone market. Virtually no consumer wants a phone with that powerful a camera, they want apps.Takeway: Keep Windows Phone on your radar but don’t bet the company on it.
Facebook is not the force in the mobile space
Given Facebook’s expected valuation and the fact it had two key executives speak at Mobile World Congress, I expected Facebook to be more top of mind and incorporated in other offerings. Instead, it was virtually non-existent. You can argue that since it did not exhibit here its presence was muted but Apple did not have an official presence and iOS was omnipresent. Takeaway: Do not assume Facebook will be as dominant in the mobile world as it is in the web world. For social game companies, you may need to find new ways to make your games social and generate virality.
The tablet market will become increasingly fragmented
The number of tablet offerings is exploding, with different features, sizes and form factors. Although none will probably come close to overtaking Apple individually, I expect they will continue to erode the iPad’s share. It reminds me of an interesting theme from Chris Anderson’s book The Long Tail, the big hit initially will never be replicated (while people always predict that if X sold 1 million units, the next X will sell two million) because there will be more niche offerings that have strong appeal to certain sectors. I have seen this in the game space repeatedly, with Bejeweled in the casual sector and Farmville in the social space (yes, I know Cityville had more DAU, but that was inflated by marketing and my guess is never approached Farmville’s profitability). Takeaway: If you are developing social games for tablets, at some point it is not going to make sense only to focus on the iPad despite the costs of optimizing for multiple devices and OSs.
The mobile industry is more global than the game industry
I am amazed at how international Mobile World Congress is, much more so than the traditional game industry. On a bus, I was chatting with someone from Gambia, and I have run into people from everywhere, including Nigeria, Egypt, Israel, Malaysia, New Zealand, UAE and scores of other countries. You might think this is because I am at a European show, but I have been to Gamescon (and previously Games Convention), Milia, Tokyo Game Show, ECTS, Casual Connect, etc., and none of these shows had the same breadth of nationalities; they usually were dominated by two or three markets. There is also buzz that the smartphone market will become increasingly important in emerging markets once there is a $50 product. Takeaway: While international markets have always been a great opportunity for social game companies (the original topic of this blog), it is even more important in the mobile social gaming space. Rather than potentially being 50% of your revenue, eventually I could see non-US revenue exceeding 75 percent.