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The Business of Social Games and Casino

How to succeed in the mobile game space by Lloyd Melnick

Month: August 2013

Avoid the false negative

thumbs downOne of the most frequent mistakes in the game industry is making decisions based on a false negative. A false negative is a result of a test that shows as absent something that is actually present. One example of this is drug test that comes back negative but the person being tested is actually taking drugs and has taken masking agent to mislead the test. I have seen false negatives applied to virtually every element of the game industry, from green light to development to international markets.

False negatives in green light

Many games have not even been started because of false negatives. When determining the market potential for a game, one of the key criteria is the performance of similar titles. Frequently, though, people stretch to define “similar titles,” and this leads to projects being rejected. Continue reading “Avoid the false negative”

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Author Lloyd MelnickPosted on August 29, 2013September 4, 2013Categories Analytics, General Social Games Business, International Issues with Social GamesTags bejeweled, candy crush, False negative, Game development, green light process, international, king.com2 Comments on Avoid the false negative

Happy endings

One of the most powerful drivers of an entertainment product’s (e.g., game, movie, television show, book) success is the emotion the customer feels at the end of the experience. The juxtaposition of my experience playing Plants vs Zombies 2 and research I came across highlights the importance of the ending and how it would impact a game company. While reading Daniel Kahneman’s Thinking Fast and Slow (which I previously recommended and is the most important book I have ever read), he shows some very interesting research and examples that highlights the importance of the last stage of the experience. The underlying concept is called “duration neglect:” A person neglects most of the experience and bases their impression (whether it was fun/good or not) on the last segment of the experience. In the world of free-to-play games, this insight has very interesting implications. Continue reading “Happy endings”

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Author Lloyd MelnickPosted on August 27, 2013September 4, 2013Categories General Social Games BusinessTags Daniel Kahneman, duration neglect, happy endings, thinking fast and slow4 Comments on Happy endings

We just launched Hit It Rich!

We just launched our social casino game, Hit It Rich, on Facebook. Please take a look and let me know what you think.

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Author Lloyd MelnickPosted on August 22, 2013August 22, 2013Categories UncategorizedTags HitItRich, zyngaLeave a comment on We just launched Hit It Rich!

Do not forget the role of luck in your success

Four leaf cloverEarlier this week, I wrote about the wonderful feeling that comes from achieving an exit (e.g., a sale, IPO) for your company. The thing that you should keep in mind, whether you are a serial entrepreneur or a Super Bowl-winning quarterback, is the role of luck. I recently came across Michael Lewis’s commencement address at Princeton in 2012 about the role of luck in his success (Lewis, whose books include Moneyball and The Big Short, is one of my favorite authors).

Lewis recounted the story of how he wrote his first book. As an unemployed liberal arts grad student, he went to a dinner and sat next to the wife of an executive at Salomon Brothers (a major investment bank at the time), who ended up convincing her husband to hire Lewis. He was given a job at Salomon that he was not at all trained for and it showed him how dysfunctional the financial sector was. He took this information and quit his job and wrote his first book, Liar’s Poker. It sold a million copies.

Lewis admits that this success was not because he was a born writer; he calls that idea “absurd.” He then goes out to point out the luck that led to his success:

Even I could see there was another, truer narrative, with luck as its theme. What were the odds of being seated at that dinner next to that Salomon Brothers lady? Of landing inside the best Wall Street firm from which to write the story of an age? Of landing in the seat with the best view of the business? Of having parents who didn’t disinherit me but instead sighed and said “do it if you must?” Of having had that sense of must kindled inside me by a professor of art history at Princeton? Of having been let into Princeton in the first place?”

Continue reading “Do not forget the role of luck in your success”

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Author Lloyd MelnickPosted on August 22, 2013September 4, 2013Categories General Social Games BusinessTags Luck, success2 Comments on Do not forget the role of luck in your success

The thrill of the deal

A few weeks ago I gave some suggestions on how to build a company for exit, but today I wanted to write a more personal entry about the emotions tied to being part of an exit. My post today is not meant to apply to everyone; as I wrote previously some will find creating a long-term profitable business very satisfying. But for me—and many of you that I know—there is no better feeling in business than the day you are part of big M&A transaction.

Image from SBNation

It is like winning the World Cup or Super Bowl or NCAA Championship (though obviously I have never been part of any of these): A combination of pure joy, relief, camaraderie and satisfaction. Continue reading “The thrill of the deal”

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Author Lloyd MelnickPosted on August 20, 2013September 4, 2013Categories General Social Games Business, Lloyd's favorite postsTags Deals, M&A, Victory2 Comments on The thrill of the deal

How to use your expertise to gain influence

One of the most frustrating issues I have seen in larger game companies, and larger companies, overall is that some people with great expertise are limited to influencing only a small part of the company even though then can be much more valuable. An article in the Harvard Business Review, How Experts Gain Influence, does a great job of showing competencies functional leaders can develop to have greater impact throughout your game company. Examples of functional specialists can be everything from the head of the analytics or user acquisition team to the lead designer. Often, their expertise is only consulted narrowly on issues directly tied to their department. Even if your company does not yet understand the complete value you bring, there are techniques to help you help them.

Four competencies to increase your impact

Influence Continue reading “How to use your expertise to gain influence”

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Author Lloyd MelnickPosted on August 15, 2013September 4, 2013Categories General Social Games BusinessTags expertise, Influence, tool-makingLeave a comment on How to use your expertise to gain influence

The secret of creating a hit game

It all comes down to one word: simplicity. This sounds very easy but creating a simple game experience is one of the most difficult elements of game design. In the social and mobile space, the games that are most appealing to the mass market are those that are very straightforward, simple experience. You can understand the game and start playing in the time it takes to get a latte at Starbucks (and often for less money). If you think of the games that have defined casual and social gaming, including Bejeweled, Farmville, Angry Birds and Candy Crush Saga, they are all easy to begin playing and simple to understand. Yet how many thousands of companies have unsuccessfully tried to quickly follow these successes with disappointing results?

Candy Crush iconHave fun fast

The key factor is that the player should be able to start playing and having fun immediately. They should not have to memorize an intricate system or go through a long tutorial. No long manuals, no Google searches, no emailing friends for instructions should be needed, or even considered, by the player. First, the player needs to be exposed immediately to the core game loop, that is the underlying mechanic the makes the game fun and keeps the player coming back. The quicker the player gets engaged with the core game loop, and not distracted by other features, the better. This engagement is seldom achieved through a tutorial, a convoluted story or mini-games. Design your game so the player can start playing quickly and understand what they are doing and their goals without it being explained to them. Continue reading “The secret of creating a hit game”

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Author Lloyd MelnickPosted on August 13, 2013August 19, 2013Categories General Social Games Business, GrowthTags Candy Crush Saga, Game development, simplicity6 Comments on The secret of creating a hit game

Why it is better to be a loved than feared leader

TrustA recent article in the Harvard Business Review, Is it Better to be Loved or Feared, reaffirmed what I consider the best way to lead. The article discusses the age old question, probably first contemplated by Machiavelli: “Are leaders better if they are more ‘lovable’ or ‘fearsome’?” These are generally mutually exclusive approaches to leadership, so trying to be both will be less effective than taking one approach and doing it well. However, the research cited in the article suggests the best way to lead is with warmth and trust.

Why put trust first

Although it is important to demonstrate competence (and be competent), you need to build a foundation of trust so that your team or company not only outwardly does what you say but also actually adopts—in a sincere and lasting way—your values, culture and organizational mission. The article points out that workplaces or teams lacking trust often have a culture of every employee for themselves; where they are more vigilant about protecting their interests than working towards the good of the company.

If warmth and trust are put above fear and proving your own competence, your team is more likely to make a positive judgment towards you and follow your instructions. Behavioral economists have shown that judgments of trustworthiness generally lead to much higher economic gains. Continue reading “Why it is better to be a loved than feared leader”

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Author Lloyd MelnickPosted on August 8, 2013August 19, 2013Categories General Social Games BusinessTags leadership, strength, trustLeave a comment on Why it is better to be a loved than feared leader

How to build a company you can sell

After being part of three big exits (total value over $600 million) in three years, I am frequently asked, “What must an entrepreneur do to successfully build and sell a company?” I have one piece of advice I give—not necessarily what you would hear from an uber-VC—that I think is the key to creating and selling a business. It comes down to building a company another company needs.

Victory

Think about your customer

Just as it is crucial to understand the consumer need when creating a product, you must also understand why your company would be attractive as an acquisition target. In a competitive marketplace, you need unique selling points to gain market share. As I have previously written, your best chance of success is pursuing a blue ocean strategy;  rather than competing with everyone else (in a red ocean) you create a unique offering. In other words, rather than create another hamburger store, sell fast food hot dogs and sausages. The same can be said for building a business that will have an exit. Continue reading “How to build a company you can sell”

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Author Lloyd MelnickPosted on August 6, 2013August 19, 2013Categories General Social Games Business, Lloyd's favorite postsTags Acquisition, customer, Exit, M&A2 Comments on How to build a company you can sell

Get my book on LTV

The definitive book on customer lifetime value, Understanding the Predictable, is now available in both print and Kindle formats on Amazon.

Understanding the Predictable delves into the world of Customer Lifetime Value (LTV), a metric that shows how much each customer is worth to your business. By understanding this metric, you can predict how changes to your product will impact the value of each customer. You will also learn how to apply this simple yet powerful method of predictive analytics to optimize your marketing and user acquisition.

For more information, click here

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Lloyd Melnick

This is Lloyd Melnick’s personal blog.  All views and opinions expressed on this website are mine alone and do not represent those of people, institutions or organizations that I may or may not be associated with in professional or personal capacity.

I am a serial builder of businesses (senior leadership on three exits worth over $700 million), successful in big (Disney, Stars Group/PokerStars, Zynga) and small companies (Merscom, Spooky Cool Labs) with over 20 years experience in the gaming and casino space.  Currently, I am on the Board of Directors of Murka and GM of VGW’s Chumba Casino

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