I recently watched the classic World War II film Twelve O’Clock High because a former colleague, whom I respect highly, mentioned on Quora that it had better leadership lessons than any business book. The movie is about a general (Gregory Peck) who takes command of a B-17 squadron that is suffering from bad luck, low morale and high casualties. There are two fundamental principles from the movie that can be applied to leading a social game company: provide your team with autonomy and do not let your team get caught up in fear.
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One of the most telling statistics I have seen recently is that Zynga.com had 2.8 million MAU (monthly active users) in April, after a March launch. These numbers show that Zynga will not build a viable alternative to Facebook, and if Zynga cannot do it, then nobody can.
It seems that the talk of the social gaming space is about Bots and using them to manipulate the iOS charts. It started with rumors that several companies were working with a “marketing” firm that actually just used bots to create fake downloads to move games up the free charts, to more rumors that this manipulation was being done by low-wage labor to even more rumors that it was Chinese slave labor. My guess is the truth is somewhere in between but what I find humorous is the high and mighty attitude some in the industry have taken. There may be some companies that knew what was going and decided not to partake, though why they did not report it to Apple or the press confounds me (and is bad business, as it put them at a competitive disadvantage). There are probably more companies that just did not know how to move up the charts in this manner. For the record, fiveonenine’s first iOS title will come out a few weeks so we do not have to make this “choice.”
What I actually find more interesting is that Apple did not stop this practice sooner. Given how widespread everyone in the industry knows it is and more importantly how even basic analysis of the traffic (i.e. tons of downloads with zero retention), Apple had to have known what was going on. Thus, they apparently decided not to stop it until the press made an issue of the manipulation. Furthermore, given how beautifully Amazon polices its customer ratings (they very diligent about eliminating fraudulent comments or those made by people even remotely tied to a product), Apple could stop the manipulation of its charts anytime it wants to.
All that said, what really matters to mobile social game companies is that this development reinforces the need to have a robust marketing strategy (and yes, insert here the trite comment that they just need to make good games that will naturally go high in the charts). Those companies (even if they are tiny) that relied on this “marketing tool” for their installs are now left dry, they need to find quickly a way to replace the installs generated by being artificially moved to the top of the charts. Companies, however, that have multiple marketing channels (performance marketing, web advertising, PR, social media marketing, etc.) can now just alter their marketing mix and maintain their business. This latest little controversy is just the most recent piece of evidence why it is necessary for social game companies to create full and robust marketing strategies for their games rather than rely on one tool.
One issue that I see looming on the horizon but that has generated little conversation is the sun-setting of social games (pardon the pun). For those not familiar with the phrase, sun-setting is simply shutting down a social game (usually with advance notice).
From the publisher’s perspective, when to sunset is usually a pretty straightforward decision. When a game costs more to operate (hosting costs, support costs, etc.), many publishers will being sunsetting the game. I say begin because they usually give the community notice so players do not monetize one day to find the game dead the next. It also gives the publisher a chance to try to migrate players to other games.
Until recently, most of the large games were immune to sun-setting, they had a big enough community that even as they lost users, the losses were small enough that the games remained profitable. As these large games become increasingly old, and the lifecycle gets shorter for newer releases, more and more “classic” games face closure.
I see this imminent sun-setting becoming a major issue as it may change players’ perceptions of virtual goods. Although virtual goods are virtual, many people who monetize feel they are purchasing a durable good. Additionally, they really care about the city/farm/team that they built, they feel a sense of ownership. When the game is closed and they lose what they created, they suffer a sense of loss. This loss, which accentuates that they are purchasing VIRTUAL items, will make them less likely to monetize in other games (and maybe not even want to play other games).
While this effect can damage the industry, it is particularly risky for individual publishers. If a publisher gets a reputation of callously sun-setting games players will gravitate to games from publishers they know are committed to long-term success. Recently, the web was rife with rumors that Playdom planned to sunset City of Wonder because it was generating numbers similar to Social City before that game was closed. I have no idea of the veracity of these rumors but I am sure that all the press about it did prompt some players to stop monetizing (and if enough do, it becomes a self-fulfilling rumor).
Social game companies cannot afford to run games ad infinitum regardless of results but I suggest you make a broader equation when deciding whether to close a game. Rather than just looking at the game’s profitability, assess its effect on the brand, whether your customers will become less likely to monetize in your other games and if they will even be more reluctant to play one of your new games. Be creative with your older games, maybe focus them more on cross-promoting your better monetizing games, incorporate advertising or even license the game to a smaller company that would like a base to build off of. Just remember that sun-setting has consequences.