Most investors know that to optimize the expected value and risk of their financial portfolio they need the right mix of domestic and international stocks, bonds and cash. Many game companies, however, fail to heed the core principals of diversification when building their portfolios and deciding what projects to green light. Ironically, very successful companies often amplify this mistake by replicating (i.e. cloning) their hit.
Mistake 1: Copying your hit
The most common mistake successful game companies make is re-skinning or cloning their biggest game. The logic behind this decision is that it is quite difficult to create a hit game so copy what you know. Most frequently, however, the clone fails to reach expectations and the company is left relying on the original hit.
The flaw in this strategy, leading to a negative result, is that the new product appeals to users who are already highly engaged with your company. Since the existing product is a success, players are not looking for an alternative. They already love what they have, why give them the same thing in a different wrapper. I recently wrote about how challenging it is to steal VIP customers from a competitor because they already love the product, it is just as difficult to steal them from yourself.
In the social casino space, you often see this mistake by companies that have a hit slots product, just change the feel of the casino, keep the same slots, and then the new product does not perform as well as the original.
Mistake 2: Appealing to the exact same market
If you base your new product on one of your existing products, you will appeal to the same customers. By appealing to the same users, you are not expanding your potential market but can only increase your share of wallet.
Again, using the social casino space as an example, there are different types of slots players. If your existing game is appealing to players who enjoy land based casinos, rather than creating another product for this target market you can build off of your success by creating a product that appeals to recreational online-only players. Thus, you can still monetize the land-based players with your core product, and increase monetization by improving that game, but you open up a new market.
Mistake 3: You are not creating a blue ocean opportunity
The core of the issue in creating a copy of an existing product is you are not creating a blue ocean opportunity, that is moving to a market space where the competition is not relevant. I have written frequently about Blue Ocean strategy, and rather than repeat it the key is that you have a higher ROI by pursuing a blue ocean strategy than competing in a red (bloody competitive) market.
Blue Ocean strategy is incompatible with cloning your existing product because a new product needs to fulfill four criteria to create a blue ocean:
- Raise. You need to raise some of the elements of value you are currently competing on.
- Eliminate. You need to eliminate some features or aspects that you compete on.
- Add. You must add new features or attributes that other products do not have.
- Reduce. You have to reduce some of the features that the industry relies on.
By definition, if you are copying an existing product you are not doing any, let alone all, of these changes needed to move into a space where the competition is non-existent.
Mistake 4: No new VIPs
VIPs are the lifeblood of a successful mobile game. Less than one percent of players normally drive over 80 percent of revenue, thus it is critical to have a strong VIP base for a game to be successful. When you re-skin or clone an existing game, it becomes virtually impossible to build a strong new VIP base. Your existing VIPs already love the old product, hence why they are VIPs, so they have no reason to move (and you probably have no benefit in moving them). New customers were already exposed to the same mechanics in the existing product and chose not to become VIPs, thus it is very unlikely the new product will generate a different reaction.
What you should do
The easy part of the game industry is recommending what not to do, the challenge is how do you grow your product base. There are many different ways to run a good green light process, assess market conditions, etc., and that is not the purpose of this post (please see my post on how to create a mobile gaming hit). Instead, I recommend you build out a strong green light process that looks at the market, the competition, your strengths and gaps in the market and build your product strategy from there. If you already have a hit product, rather than start from scratch, see how you can leverage key elements of that product to expand into a different segment of the market or create an entirely new space.
Key takeaways
- While it is tempting to try to replicate your successful product by re-skinning or cloning it, such a strategy is likely to fail as it will not expand your market.
- Cloning a product is the inverse of pursuing a Blue Ocean strategy (which requires focusing on four core elements: Eliminate, Raise, Add, Reduce), and Blue Ocean generates a higher long-term ROI that traditional strategy.
- If you have a hit, rather than start from scratch see how you can leverage key elements of that product to expand into a different segment of the market or create an entirely new space.
The Business of Social Games and Casino 