Skip to content Skip to navigation

The Business of Social Games and Casino

How to succeed in the mobile game space by Lloyd Melnick

Month: January 2021

Measure yourself by your worst day

by Lloyd MelnickJanuary 27, 2021January 10, 2021

I once wrote that the true measurement of someone you work with (supplier, investor, etc.) is not how they normally act but how they behave in trying situations. The underlying principle is that it is easy to do the right thing when all is going well but you can understand a person’s true character in how they act in difficult times. Many people seem great when they do not have cash flow issues, when their company is hitting or exceeding its targets, etc. They will often talk about win-win relationships and seem fantastic to work with. Then when they have to make hard decisions, they may show they cannot be trusted or relied upon.

I recently came across an article that shows the same analysis can help you assess and improve yourself, You’re Only As Good As Your Worst Day on the Farnam Street blog. The post points out that assessing your performance when challenged is most instructive. They write, “it’s easy to look good when everything goes according to plan and circumstances are calm. Anyone can succeed for a while, even if it’s just out of pure luck. It’s no great feat to do well if you’re not being challenged or tested. Watching what happens during a downswing is far more instructive.”

How do you react to uncertainty and fear

For leaders, look at how you behave when faced with uncertainty and fear. A weak leader might retreat into their office or become defensive. A strong leader will deal with a difficult situation by bringing everyone together and being a reassuring, sympathetic presence.

bbad

People also remember how you act in a difficult situation. They will not focus on how you behaved when you exceeded your numbers or were given a promotion. Instead, what will be most telling is what you did when your product went down for the day or you had a falling out with the CEO. Those are the times when you show them what to model in the future. It is also the time when your team will make decisions whether they are committed long-term.

You can’t fake it

Behavior on challenging days will tell you (and others) about yourself because it is virtually impossible to fake. As they say in the article, “[i]t’s honest signaling. There’s little time for posturing or stalling. On your worst day, you reveal whether you’ve been planning for the possibility of disaster or just coasting along enjoying the good times. Your plans and preparation (or lack thereof) show how much you really care about the people who depend on you. You get to build and strengthen bonds in ways that will last a lifetime, or you risk destroying relationships in moments. You get to build trust and respect or you might break what you have irreparably.”

Awful days are invaluable

Your worst days are priceless. They represent a way to show the people around you your true nature. Most importantly, though, they are a window into yourself. Look back at some of your most challenging times, assess how you reacted, how you treated your colleagues and employees and the choices you made. Learn from these decisions so you can become the leader you want to be.

Key takeaways

  • Assessing your performance when challenged is powerful, as it is easy to look good when everything goes according to plan and circumstances are calm.
  • Look at whether you retreat in the face of difficulty or are reassuring and bring everyone together.
  • Gaze back at your worst days and assess how you responded, how you acted towards your teammates and staff and the picks you made. Learn from these decisions so you can become the leader you want to be.

Share this:

  • Facebook
  • LinkedIn

Like this:

Like Loading...
General Social Games Business General Tech BusinessCharacter
Leave a comment

The keys to building a resilient business

by Lloyd MelnickJanuary 20, 2021January 24, 2021

Last year, the most valuable book I read was General Stanley McChrystal’s Team of Teams and I found his discussion of building an organization to deal with a complex environment particularly useful. The world today is very complex, with events everywhere impacting severely your business, yet most companies are built for a less inter-connected, albeit complicated, world.  McChrystal showed that being complex is different from being complicated. Things that are complicated may have many parts, but those parts are joined, one to the next, in straightforward and simple ways. A complicated machine like an internal combustion engine might be confusing to many people but it can be broken down into a series of neat and tidy deterministic relationships. Conversely, things that are complex, such as insurgencies or the mobile gaming ecosystem, have a diverse range of connected parts that interact regularly. Due to this complexity, you need to build a resilient organization that can adapt to changes in the external environment.

resilience

Given the importance of resiliency, I then read a book referenced in Team of Teams, Resilience Thinking by Brian Walker. While the book is primarily about resilience in the environment, it lays the groundwork for managing resources in a business and navigating a complex environment.

At its core, resilience thinking is based on the concept that things change and to ignore or resist this change is to increase your vulnerability and forego emerging opportunities. If you do not implement a resiliency strategy, you limit your options. Additionally, Walker points out that business is characterized by dynamic change and it is as critical to manage systems to enhance their resilience, as it is to manage the supply of specific products.

Resiliency versus optimization

One of the ways that resilience thinking prompts you to take a different approach is by helping you understand the costs of optimization. I have been trained, especially in the gaming space, that the key to success is perpetual optimization (even used that phrase to help sell a company once). We always look for ways to create the most output with the fewest resources, optimize every event in a game based on ABn tests and reduce any “wasted” effort by employees, customers and other stakeholders. Walker says, “humans are great optimizers. We look at everything around us, whether a cow, a house, or a share portfolio and ask ourselves how we can manage it to get the best return. Our modus operandi is to break the thing we’re managing down into its component parts and understand how each part functions and what inputs will yield the greatest outputs.”

An optimization approach aims to get your business into an optimal state and maintain it. Walker explains, “to achieve this outcome, management builds models that generally assume (among other unrecognized assumptions) that changes will be incremental and linear (cause-and-effect changes)…. Ecological systems are extremely dynamic, their behavior much more like the analogy of a boat at sea. They are constantly confronted with ‘surprise’ events such as storms, pest outbreaks, or droughts. What is optimal for one year is unlikely to be optimal the next.” Resilience thinking shows that optimization is not a best-practice as the business ecosystem is usually configured and reconfigured by extreme events, not average conditions.

Walker uses several examples to show how these extreme events actually drive business. Sometimes a competitive product only has a minor impact and at other times it can destroy your business. In some cases a change in interest rate does not impact growth, other times it causes a crash. Resilience thinking is the capacity of a business to absorb disturbances like these and still retain its basic function and structure. Being efficient, by definition, leads to elimination of redundancies as you only keep those activities that are directly and immediately beneficial. Walker writes, “the more you optimize elements of a complex system of humans and nature for some specific goal, the more you diminish that system’s resilience. A drive for an efficient client optimal state outcome has the effect of making the total system more vulnerable to shocks and disturbances.”

Thresholds versus linearity

The most important takeaway from Walker’s book, and resiliency theory in general, is the importance of thresholds. To understand the need for resilient thinking, the first step is learning about thresholds. In non-business terms, systems can exist in more than one kind of stable state. If a system changes too much it crosses a threshold and begins behaving in a different way, with different feedbacks between its component parts and a different structure. This is not a gradual, linear progression but almost a jump between realities. Think of an airline operating in January 2020 versus their situation in April 2020.

ball and basin

Walker explains how systems, including business systems, shift between thresholds. He uses the analogy of a ball and basin.

System as a Ball in a Basin. The important variables you use to describe a system are known as the system’s “state” variables….

We can envisage the system as a number of basins in two-, or four-, or n-dimensional space…. The ball is the particular combination of the amounts of each of the n variables the system currently has-that is, the current state of the system. The state space of a system is therefore defined by the variables that you are particularly interested in, encompassing the full array of possible states the system can be in.

And it’s not just the state of the system (the position of the ball) in relation to the threshold that’s important. If conditions cause the basin to get smaller, resilience declines, and the potential of the system to cross into a different basin of attraction becomes easier. It takes a progressively smaller disturbance to nudge the system over the threshold. Figures 3 and 4 shows this using the ball in the basin analogy.

If you think of a system as a ball moving around in a basin of attraction, then managing for resilience is about understanding how the ball is moving and what forces shape the basin. The threshold is the lip of the basin leading into an alternate basin where the rules change.

Threshold

I have seen many examples of this ball and basin philosophy in the business world:

  • A mobile game company progressively tightens its economy. Product managers increase monetization by worsening the exchange rate or limiting the amount of free play. Each of these changes has a positive impact when AB tested but after six months or a year, they have to sunset the product.
  • A slots developer has a successful slot machine. They keep making small changes to the math and one year later nobody is playing the machine.
  • A company hires a new COO who cuts costs by reducing the customer service team by 10 percent. Customers only have to wait an extra 45 seconds to get their request dealt with. Initially, KPIs are unchanged but six months later they find they lost 25 percent of their most valuable customers.
  • A new CTO optimizes load time of slot machines in a mobile casino by 0.5 seconds. When surveyed, players did not even see a difference. KPIs, however, improve 30 percent.
  • A product is growing 10-20 percent annually for 5 years. They then make a series of small improvements to the way they work with customers and the flow within the product. Growth goes from low double digits to triple digits but nobody can point to one improvement.

These are all examples where small changes by themselves had negligible impact or even an opposite initial impact, but over time combined they moved the product from one basin to another, causing a tremendous shift in KPIs. Resilience thinking is about looking at the entire ecosystem rather than optimizing one or two events.

This threshold approach shows different ways to approach traditional situations. If the business is stuck in an undesirable “basin”, then it might be impossible or too expensive to manage the threshold or the system’s trajectory. In this situation you may consider transforming the very nature of the system by introducing new state variables (e.g. a subscription model).

You should also consider thresholds when making changes. Walker asks, “how much disturbance and change can a system take before it loses the ability to stay in the same basin?….Along each of these key variables are thresholds; if the system moves beyond a threshold it behaves in a different way, often with undesirable and unforeseen surprises.
Once a threshold has been crossed it is usually difficult (in some cases impossible) to cross back.”

Thresholds also suggest a different way to look at your data and products. You need to understand what thresholds lie along your variables, and knowing how much disturbance it will take to push the system across these thresholds. As Walker says, “to ignore these variables and their thresholds, to simply focus on getting better at business as usual, is to diminish the resilience of the system, increase vulnerability to future shocks and reduce future options…. A system’s resilience can be measured by its distance from these thresholds. The closer you are to a threshold, the less it takes to be pushed….There is a much higher likelihood of crossing a threshold into a new regime if you are unaware of its existence.”

You can’t neglect the environment

One of the driving forces making resiliency increasingly important compared to efficiency is the complexity of the global business ecosystem, particularly in the gaming space. Walker explains, “we all live and operate in social systems that are inextricably linked with the systems in which they are embedded; we exist within social-ecological systems. Whether in Manhattan or Baghdad, people depend on ecosystems somewhere where for their continued existence. Changes in one domain of the system, social or ecological, inevitably have impacts on the other domain. It is not possible to meaningfully understand the dynamics of one of the domains in isolation from the other.”

2020 drove home the impact of the external environment on many businesses. It is a major component of resilience thinking and an important point of difference with traditional science that has modeled the world based on the assumption that change is incremental and predictable.

Resiliency is managing shocks

Resilience is the capacity of a system to absorb disturbance; to undergo change and still retain essentially the same function, structure, and feedbacks. In cases where you have a particularly successful product or business, this resiliency even more important as you do not want to lose what you have achieved (and success is not easy in the gaming space). Walker writes, “it’s the capacity to undergo some change without crossing a threshold to a different system regime, that is a system with a different identity. A resilient social-ecological system in a ‘desirable’ state (such as a productive agricultural region or industrial region) has a greater capacity to continue providing us with the goods and services that support our quality of life while being subjected to a variety of shocks.“

Resilience thinking is about understanding and engaging with a changing world. By understanding how and why the system as a whole is changing, you can build a capacity to work with change, rather than being at its mercy.

An understanding of what is happening above and below your specific business is critically important. You should ask yourself what effect do these changes exert over the scale in which you are operating. It is also important to identify the key slow controlling variables that may move you between thresholds. While I focused previously on a combination of internal factors that could cause your company to change “basins,” it could also be due to a combination of external factors (e.g. a virus and trade war) or a few of each. Look for, and understand the drivers of slowly changing variables in your ecosystem. Also, simplifying or optimizing the system for increased efficiency reduces diversity of possible responses to disturbance and you become more vulnerable to stresses and shocks.

Recovery is key

Given all the variables that impact your business, rather than anticipating each of them, resilience thinking prepares you to recover quickly from shocks. The key to a sustainable business is capacity to recover after a disturbance. While Walker’s book was published in 2006, Covid proved how important it is to be able to recover from existential disturbances.

It is also critical that the ecosystem and the social system are viewed together rather than analyzed independently, and that both went through cycles of adaptation to their changing environments as adaptive cycles happen everywhere.

By adaptive cycles, Walker is referring to two modes, Fore Loops and Back Loops. Walker writes, “a development loop (or ‘fore’ loop), and a release and reorganization loop (or ‘back’ loop) (see figures 9 and 10). The fore loop (sometimes called the front loop or forward loop) is characterized by the accumulation of capital, by stability and conservation, a mode that is essential for system (and therefore human) well-being and …the back loop is characterized by uncertainty, novelty, and experimentation. The back loop is the time of greatest potential for the initiation of either destructive or creative change in the system. It is the time when human actions-intentional and thoughtful, or spontaneous and reckless-can have the biggest impact.”

Resilience is the capacity of the business to absorb change and disturbances and still retain its basic structure and function, maintaining its identity.

How to manage for resiliency

The first key to building a company that can navigate the complex and inter-connected world is looking outward, not simply focusing on doing what you are doing now but better. Realize that the future has a habit of throwing up surprises, a product of the complex nature of social-ecological systems.

Rather than try to simulate the future, explore different potential scenarios. Walker writes, “scenarios are not predictions of what will happen. They are an exploration ration of what might happen….Scenarios help organize information, and they are easy to understand. Scenario planning is also a good way to open discussion among different groups of people who might not otherwise interact….For this reason the scenarios should be considered together, not separately. They should be thought of as a set that provides us with a range of insights on what makes a region vulnerable and what confers resilience.”

Second, you should also put resilience thinking into practice. It represents a different way of looking at the world. It’s about seeing systems, linkages, thresholds, and cycles in both what is directly important to your business and in what that drive them. It is about understanding and embracing change, as opposed to striving for constancy.

Third, keep thresholds top of mind. Understand what are the key slow variables that drive your business’ ecosystem and although a small change might not have a negative impact, know that a series of them could push you into another state. Ask whether these variables are changing and what are the thresholds beyond which the ecosystem will behave differently. Thresholds are defined by changes in feedbacks, so understand which important feedbacks in the system are likely to change under certain conditions.

Finally, understand that resilience comes at a cost. It comes down to a trade-off between foregone extra profits in the short term, and long-term persistence and reduced costs from crisis management. Managing for specified resilience is important, but so too is maintaining the general capacities that allow your company to absorb unforeseen disturbances.

Key takeaways

  1. Resilience thinking is based on the concept that things change (both within and externally to your business) and to ignore or resist this change is to increase your vulnerability and forego emerging opportunities.
  2. The world is not linear, instead we operate in thresholds. Like a basin, small changes keep you in a certain range but then combine to pass over a threshold and move you into a completely different business situation. You need to understand what are the key slow variables that could end up moving you into a much worse (or better) position.
  3. Resilience thinking represents a different way of looking at the world. It’s about seeing systems, linkages, thresholds, and cycles in both what is directly important to your business and in what drives them. It is about understanding and embracing change, as opposed to striving for constancy.

Share this:

  • Facebook
  • LinkedIn

Like this:

Like Loading...
General Social Games Business General Tech Business Lloyd's favorite posts Social Casinocomplexity Resiliency Strategy
1 Comment

Interview with Jay Powell on trends from 2020 and expectations for 2021

by Lloyd MelnickJanuary 13, 2021December 31, 2020

While I hate making annual predictions, it does not keep me from asking others what they expect. I recently had the opportunity to speak with Jay Powell, arguably the most connected person in the game industry, on the key trends he saw in 2020 and what he expects this year. Jay was one of the first employees I ever hired (1998) and since then he has built relationships with thousands of game developers, publishers and tool providers. Jay at ALES 2019 - squareBelow is my conversation with

Jay:

Lloyd: You are probably the most connected person in the industry so I wanted to start by asking you what major trends or changes you saw in 2020, what were people talking about and interested in?

Jay:  That question can go one of two ways. There’s what we see at the AAA level with the Activision, Take Two, etc, then there’s the rest of the world.

Lloyd: Let’s start with the big money companies, then we’ll come back to the rest of the world.

Jay: At the AAA level we’re seeing companies (aside from Take Two) approach the streaming and subscription services with some seriousness. Stadia has stuck around, Apple has been paying guarantees for Arcade, and Microsoft has gone a fantastic job with Game Pass. These platforms are the new consoles in many ways and they can be approached for funding and distribution just like a traditional publisher. Plus, when the exclusivity ends, with some of these deals, you can still pursue more funding and distribution.

Lloyd:  Google, MS and Apple are all huge, will one of them win?

Jay: My bet is on Microsoft. The probability is still too high that Google just packs it in if they don’t get the traction they want. That’s been the primary concern with them from the beginning. Aside from the fact that they still don’t seem to understand who their customer is. Apple is under assault from multiple angles right now and Arcade is great for people with Apple devices but iOS isn’t the dominant platform in mobile.

Microsoft has built a real value with Game Pass and they’re finally out there acquiring world class studios to make it even better. Buying Bethesda was huge and I’m very interested to see who they pick up next.

Lloyd: Are the AAA devs/publishers also coming around to streaming/subscriptions?

Jay: Yes, with the exception of Take Two. Activision hasn’t fully embraced it yet, but they will. EA signed on with Microsoft (and Ubi Soft is rumored to be adding their Uplay as well) to make their subscription service part of Game Pass and the next tier of publishers (Paradox for example) already see the value in it as well.

Take Two said they don’t see streaming as a major player in 2021 but let’s face it, with GTA 5 Online, Red Dead Online and the general power of those two IPs, they don’t need it.

Lloyd: Before we leave the world of AAA, you mentioned this being the new world of consoles. What about the old world of consoles, it felt like there was more buzz with the PS5 and Series S/X than there has been for a while with a new console generation, is it a dead man’s bump or a true resurgence?

Jay: I don’t think it’s either. It’s business as usual. The pandemic has been fantastic for Nintendo and the Switch, the early adopters are still buying up XBox Series X and PS5 because that’s what they do, and Microsoft’s Series S (plus Game Pass) is a great option in the middle. We’ve got a shortage now because of the usual holiday release rush and the world went through a global pandemic, which caused supply to be even lower than usual.

Lloyd: So you don’t see the console market increasing, it’s real, it’s here but it is not entering a new growth era?

Jay: I don’t think we’re going to see Microsoft and Sony enter a new growth era with their consoles, but Nintendo’s certainly seeing one.

Animal Crossing New Horizons has sold over 26 million units this year, largely because people were home with the pandemic. All of those players now have a Switch, they’re going to be looking for new games.

Lloyd: Jumping back to the online subs/streaming, what does it mean for the non-AAA companies, how are they seeing it?

Jay: Streaming for the non-AAA companies is a mixed bag. It’s not going to be a money tree for the majority of companies for the same reason every music artist doesn’t bring in tens of millions on Spotify. The big names are always going to make more money on stream/sub services because that’s what people usually gravitate to.

That said, with Apple, Microsoft, and other companies paying guarantees to get exclusives there is a new option for a lot of developers.

Back to streaming for everyone else… Paradox has said that much of the success of Crusader Kings 3 comes from the fact that they added it to Game Pass. We’re seeing these streaming options become marketing pieces for games and many times developers and publishers are paid up front to include them.

We’re also seeing the first wave of Apple Arcade’s exclusivity agreements expire. Now we have teams who’s game (plus live content) have been fully funded but now they are free to pursue other revenue streams for those games as well.

The entire ecosystem opens up opportunities for teams that are positioned (and interested) in taking them.

Lloyd: What about Steam? That’s become the major distribution channel for non-AAA, how is this competition impacting them and thus their ability to get Indie games out?

Jay: Steam’s problem isn’t getting indie games out, it’s getting visibility for the games. More than 200 games launch every week on Steam, they aren’t having any issues releasing games.

The competition from Microsoft and Epic in particular is forcing their hand and making them change their terms for the first time in over a decade though.

Lloyd: For the better? At least better for devs?

Jay: Somewhat. Steam’s changed their terms back in 2018 but it was to the benefit of the AAA crowd, not indies.

Apple changed their’s recently to create better terms for the indies versus the AAA. It’s two reactions to two different problems. In 2018 Steam was getting pressure from Epic but their move was to try to regain the AAA releases that had left their platform. Ubi Soft have UPlay, EA had their Origin launcher, Bethesda announced they would be skipping Steam for Fallout 76, Take Two built their own launcher. Steam was losing the blockbuster games that make the bulk of their revenue.

Apple’s change came from Epic’s pressure on their revenue share and Epic’s framed their entire legal campaign as a fight for the “little guys”

Lloyd: I was always a little amused about Epic fighting for the little guy.

Jay: Epic had a hand in forcing both changes though and I don’t think they get the credit they deserve for what they’ve done.

Lloyd: I agree but not don’t think they are purely altruistic, IMHO

Outside of what we just discussed, what else were people talking about in 2020. What were the big changes (outside Covid) that grabbed their attention or worried them?

Jay:

”I was always a little amused about Epic fighting for the little guy”

– Yea, me too. But with the revenue Fortnite brings in they are the only one’s who have had the nerve (and bankroll) to do it.

and no, it’s not completely altruistic but the indie teams will take all the support they can get.

I’m not sure you can frame 2020 without Covid. It’s been a huge driving force in so many areas of our industry. Before we dive into that we need to recognize that we (as the video game industry) have been VERY fortunate this year. Covid has ransacked so many industries, companies, and families but our world has profited greatly from it. Though we may speak about the pandemic and the “good” it brought to games, it’s not a good thing and a lot of people have suffered and died. I just wanted to make that clear.

Lloyd: So true.

Jay: The big change this year was everything moving online. For the non-AAA world it has allowed developers who have never had the chance to pitch their game to publishers at GDC get the chance due to digital events. (and yes, full disclosure, I run the longest running digital conference series in the industry).

Lloyd: Has that worked?

Jay: YES.

Have people gotten deals from online conferences?

Jay: The change has forced new ways of communicating for business and marketing, as well as internal studio communication. We’ve seen new tools pop up and new opportunities as a result.

We just got the survey stats in from our most recent event and our attendees alone are forecasting millions of dollars in revenue from deals as a result of one event.

And that wasn’t even our biggest event this year. Opening communication channels with no geographic barrier of entry opens up options to developers, publishers, and tech companies across the board.

The problem is, we were flooded with these events this year and we have had a lot of “Zoom Fatigue”. Like any market, that’s going to correct itself in 2021. The traditional conference companies are learning you can’t force the same model (and revenue) from an onsite event to an online event. The smaller companies are realizing it’s harder than it looks to run these events successfully.

The advantage we’ve had with our IndieGameBusiness I events is that we got to figure out all those problems back in 2019 when we were the only one’s doing these events.

Lloyd:

The change has forced new ways of communicating for business and marketing, as well as internal studio communication. We’ve seen new tools pop up and new opportunities as a result.

What are some of the new tools that have gained traction, that devs are really using (as opposed to VC backed and just getting hype)?

Jay: Zoom got the lion’s share of the spotlight because that’s what people were using pre-Covid. Now we’re seeing more video chat options opening up and the ones that existed previously such as Hangouts, Microsoft Teams, WebEx, and GoToMeeting have been forced to improve.

Slack has grown but not nearly like Discord has and both have pushed the other to innovate. Our native app at our conferences is 8×8 which isn’t nearly as popular but works amazingly well across all sorts of systems.

Now you’re seeing a growth in virtual conference software with Hopin.to, EventCombo, and others. They’re going to push companies like EventBrite to evolve.

We’re seeing new solutions pop up in VR conferences (which I’m still not sold on).

In the game industry specifically Xsolla has launched “Unconventional” which had a good test run earlier this year. Our partner MeetToMatch will be unveiling their integrated solution at our March event and we have developers coming together to create things like IWOCon.

This is IWOCon, very cool and ambitious if they pull it off – IWOCon

Lloyd: Enough of 2020 (I’m sure others would agree), what are you expecting in 2021?

Jay: I think we’ll see the fruits of a lot of the innovation that was forced on 2020 emerge next year.

In the game industry, in particular, we’re going to see online events mature as people learn how to manage them. We’ll see some (not all) of our favorite in-person events return in a hybrid form as well.

We’re going to see more attention paid to the subscription services as each platform starts acquiring high quality exclusive content.

We’re going to see a growth in markets like South America, the Middle East, and Africa because the companies there have a much easier path to the core industry. We’re going to see more of the western markets get involved with these territories for the same reason.

Lloyd: What do you mean by hybrid?

Jay: Hybrid events will be merging the on-site conferences with online versions. We’ve done this with our event that happens alongside GDC and other conferences have tested it as well. At the most basic level you allow your attendees that are physically at an event to schedule online meetings with registered attendees who aren’t. I imagine we’ll see virtual lectures and sessions as well.

Lloyd: In the emerging territories you mention, will the growth be subscription based or more traditional game sales?

Jay: Both, each market has it’s own nuances, advantages, and limitations. The most successful companies will be the ones who know what products and games fit the right audiences.

Lloyd: What else do you expect?

Jay:  We’re going to have to see a better way for developers and small to mid tier publishers to boost their discoverability (which is still the biggest hurdle for the indie market).

We’re also going to see a lot of growth in online education both through traditional colleges and universities as well as specialized segments for markets like games.

Lloyd: Hasn’t discoverability been an issue for devs since when we first met in the 1990s at Octagon Entertainment and Merscom?

Jay: If we go all the way back to our Octagon days, we dealt with 75-150 publishers globally. Now my team tracks over 700 publishers across PC, console, and mobile.

When we were running Merscom the discoverability issue came from the casual space where companies like Big Fish were launching a new game every day (and taking 70% of the revenue). Now we see far more games launched on multiple platforms. The days of “A good game will always sell” are dead and gone.

Lloyd: How do 700 publishers make money, I can’t believe 700 devs could make money, and publishers need a suite of titles?

Jay: Well we track over 4,000 developers and I’m sure there are at least 1,000 more that haven’t hit our radar yet.

The reality is that 700 publishers don’t make money, We release our publisher list every year (new one arriving in early January) and it’s a major undertaking to keep our internal database accurate. Publishers come and go quickly but you don’t need as many hits to stay in business now if you run a streamlined company.

Lloyd: I’ve already kept you longer than I was supposed to, so thanks for the great conversation. Any parting thoughts you wanted to share?

Jay: I can do this all day.

2021 is going to see a continuation of the changes we saw in 2020. The companies that survive and prosper are going to be the ones paying attention to the market around them and can adapt as needed.

Now more than ever you need to know your audience, know how to reach them, understand their pain points, and deliver them an innovative solution. That’s going to be true for everything from the games we play, to where we play them, and the tech that runs them.

Thank you Lloyd, this was fun

Share this:

  • Facebook
  • LinkedIn

Like this:

Like Loading...
General Social Games Business2020 2021 Subscription
Leave a comment

Summary of posts September to December 2020

by Lloyd MelnickJanuary 6, 2021December 26, 2020

People Analytics for Online Gaming

  • You need to align performance evaluations with the underlying factors that create success; deconstruct what leads to the outcomes you want and then assess people on those factors.
  • Some common problems when evaluating people include context (attributing results to a person when the environment drove success or failure), interdependence (assessing on an individual level a result that was driven by a team), self-fulfilling prophecies (people perform consistent with expectations) and reverse causality (we attribute causality to correlation, even though the factors may not be related or may be in the other direction).
  • You should assess how your team or company works as a network, looking at the relationships, and then encourage and grow ones that lead to desired outcomes.

Interview with the Queen of Research, Maria Cipollone

How to manage your customer service to have the biggest impact on your profits

  • Data shows that trying to create an exceptional customer experience has virtually no impact on loyalty and engagement, however, reducing the effort the customer must exert does improve loyalty.
  • The best way to measure this effort is CES score, which is based on a statement, “the company made it easy for me to handle my issue,” after which the customer is asked to answer (on a 1–7) whether they agree or disagree with that statement.
  • The keys to implementing successfully an effortless experience program are minimizing channel switching, avoiding repeat contacts, engineering the customer service interaction experience, building the control quotient, creating the right culture and optimizing the purchase experience.

The difference between great executives and everyone else

  • There are many similarities between what separates a professional athlete from an amateur and what separates a great business executive from everyone else.
  • The best executives focus on getting the best outcome, not being right.
  • The best executives accept responsibility and do not blame others.

3 Words I Hate

  • Game companies should avoid the phrase gamification, as their product is already a game and should be entertaining.
  • Whales is an insidious phrase as it describes your best customers in a derogatory way, potentially leading to treating them in a way that destroys long-term value.
  • It is misleading to use data that is directional, without statistical significance as relying on this data is like not using data at all.

Leading in a complex world: building a team of teams

  • The difference between complexity and complicated is central to building an organization that works in the 21st century. Things that are complicated may have many parts, but those parts are joined, one to the next, in straightforward and simple ways and are like an equation that needs to be solved. Things that are complex, such as insurgencies or the mobile gaming ecosystem, have a diverse range of connected parts that interact regularly.
  • Accept that you will have to deal with unpredicted challenges and threats. You then build an organization and systems that can adapt rather than erecting strong, specialized defenses.
  • Teams, while not always optimally efficient, are extremely adaptable. Teams overcome challenges that could never be foreseen by a single manager, their solutions often emerge as the bottom-up result of interactions, rather than from top-down orders. Your teams must then interconnect into a team of teams, rather than siloed organizations. Create an organization within which the relationships between teams resembled those between individuals on a single team.

Adjacent User Theory Shows How to Supercharge Your Game’s Growth

  • Adjacent users represent a great opportunity for growth. These are potential players (adjacent users) are aware of the product, maybe tried it, but are not engaged customers.
  • You solve for these players by looking at different states of your product (i.e. registration, play, purchase) and seeing who drops off at each of these states, then understand why these potential customers are dropping off.
  • You can make your product attractive by putting yourself in the place of the adjacent user, watching them use your game or product and talking to them.

What really went wrong at Quibi

  • Quibi’s failure was very predictable and these predictors provide a framework of what companies need to do to succeed in the entertainment space.
  • Quibi relied on a unique technology, the ability to watch content seamlessly in portrait or landscape mode, rather than relying on creating content people wanted. You cannot succeed in entertainment by relying on technology.
  • Other key lessons are that great entertainment companies need to deliver a overabundance of content, much more than you expect even your heaviest users to consume, and some flagship products that forces people to try your offering.

Building a strategy around doing the opposite

  • A powerful way to find a competitive advantage is to do the opposite of what other companies in the industry are doing. Mature industries tend to converge, creating an opportunity to appeal to customers who do not like the homogenous offerings.
  • To uncover the opportunity, first list the primary characteristics and elements currently in the category and then ask yourself what would an offering look like if we did the exact opposite.
  • This strategy represents a particularly appealing opportunity in the social casino and real money gaming spaces, where the offering has largely converged.

How to become successful CEO

  • Being a great CEO or leader is very hard. CEOs and others leading business units are responsible not only for their fate but the fate of their company, having to make potentially life or death decisions.
  • To meet The Struggle of leading a company, you need to rely on teamwork, think outside the box for solutions and continuously self-reflect.
  • Great leaders must learn to be comfortable doing inherently uncomfortable things. Great CEOs have to make their unnatural job feel natural.

Ways to improve your game (or product) using neuroscience

  • Neuromarketing, using brain imaging, scanning, or other brain activity measurement technology to measure a subject’s response, shows you can price more effectively by minimizing the customers pain, by not forcing them to make multiple purchase decisions, spreading out the cost or bundling items.
  • Neuromarketing also shows you can improve customers’ trust by trusting them and specifically telling them you are trustworthy.
  • It also shows that branding forms an emotional attachment you’re your customer and prompts them to recommend you enthusiastically to their friends.

Up-skillOR vs Up-skillEE

  • Recruiting candidates with the expectation you will train (upskill) them to do the target job well shows an arrogance that you think you can train them better than anyone else has.
  • Upskilling people ensures your team does not go to the next level, you set your current skillset as the ceiling.
  • You also miss the opportunity to bring new skills and experiences to your team, where the new hire can make everyone else more valuable.

Word-of-machine effect with recommendation engines

    • AI driven recommendation engines, popularized on Amazon and Netflix, have gone from being a competitive advantage in online and mobile apps to part of the cost of doing business.
    • While AI recommendations are often closer to what customers want, people trust human recommendations more when it is based on hedonic or experiential factors, and trust machines more when it is based on utilitarian factors; this is referred to as word-of-machine effect.
    • When presenting recommendations, you must be cognizant of word-of-machine effect; for recommendations around hedonistic properties try to bring in a human element (augmented intelligence) or explain that these are better recommendations.

Turn Your Company Around

  • Less than 50 percent of people are satisfied with that job, and Covid has made the situation more dire.
  • The key to improving employee satisfaction, and growing productivity, is evolving from a leader-follower approach (where you tell people what to do) to a leader-leader approach (where people control their decision-making.
  • To move to a leader-leader organization, you need to empower your team (including asking them how to empower them better) and encourage deliberate action where they vocalize what they are doing rather than ask what to do.

The Power of Content

  • Disney has enjoyed phenomenal growth with Disney+ and last week announced it’s plans to accelerate this growth, showing what is critical to the success of an entertainment brand.
  • The first pillar of this strategy is to release a plethora of new content in 2021, more than 25 new television series plus multiple movies, showing how critical new content is (especially telling as Disney has the strongest back catalog of content in the world).
  • The second pillar is to rely on its franchises (Star Wars, Marvel, Disney characters) for this new content, showing the value of Forever Franchises in the entertainment space.

2021 Pre-Mortem: What went wrong in 2021

  • Rather than trying to guess (predict) the future, conduct a pre-mortem, where you put yourself in December 2021 and look back at what went terribly wrong for your business. The exercise will help you identify the biggest risks you face.
  • Some of the areas you should look at include the impact of Covid, spread of Real Money gaming in the US, challenges to RMG in Europe, the new gaming consoles and how work from home is changing the workplace.
  • You also need to realize that risks come in many forms and some are impossible to anticipate. You need to detect these quickly and respond with improvisation, speed and an iterative approach, since not every action taken will work as intended.

Share this:

  • Facebook
  • LinkedIn

Like this:

Like Loading...
Analytics behavioral economics General Social Games Business General Tech Business Social Casino2020
Leave a comment
  • Home
  • About

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

Follow The Business of Social Games and Casino on WordPress.com

Enter your email address to follow this blog and receive notifications of new posts by email.

Join 1,373 other followers

Most Recent Posts

  • Podcasts now available
  • Lessons for gaming and tech companies from the Peter Drucker Forum
  • Chaos Theory, the Butterfly Effect, and Gaming
  • How to give help without micromanaging

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 the GM of VGW’s Chumba Casino and on the Board of Directors of Murka Games and Luckbox.

Topic Areas

  • Analytics (114)
  • Bayes' Theorem (8)
  • behavioral economics (8)
  • blue ocean strategy (14)
  • Crowdfunding (4)
  • General Social Games Business (457)
  • General Tech Business (194)
  • Growth (88)
  • International Issues with Social Games (50)
  • Lloyd's favorite posts (101)
  • LTV (54)
  • Machine Learning (10)
  • Mobile Platforms (37)
  • Social Casino (51)
  • Social Games Marketing (104)
  • thinking fast and slow (5)
  • Uncategorized (32)

Social

  • View CasualGame’s profile on Facebook
  • View @lloydmelnick’s profile on Twitter
  • View lloydmelnick’s profile on LinkedIn

RSS

RSS Feed RSS - Posts

RSS Feed RSS - Comments

Categories

  • Analytics (114)
  • Bayes' Theorem (8)
  • behavioral economics (8)
  • blue ocean strategy (14)
  • Crowdfunding (4)
  • General Social Games Business (457)
  • General Tech Business (194)
  • Growth (88)
  • International Issues with Social Games (50)
  • Lloyd's favorite posts (101)
  • LTV (54)
  • Machine Learning (10)
  • Mobile Platforms (37)
  • Social Casino (51)
  • Social Games Marketing (104)
  • thinking fast and slow (5)
  • Uncategorized (32)

Archives

  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • November 2019
  • October 2019
  • September 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • December 2010
January 2021
S M T W T F S
 12
3456789
10111213141516
17181920212223
24252627282930
31  
« Dec   Feb »

by Lloyd Melnick

All posts by Lloyd Melnick unless specified otherwise
Google+

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 1,373 other followers

Follow Lloyd Melnick on Quora

RSS HBR Blog

  • What Went Wrong with the Boeing 737 Max?
    Harvard Business School professor Bill George examines the Boeing 737 Max crashes through the lens of industry and corporate culture.
  • Partnering with a Technology Consultancy Can Help Scale Your Digital Transformation - SPONSOR CONTENT FROM WWT
    Sponsor content from WWT.

RSS Techcrunch

  • An error has occurred; the feed is probably down. Try again later.

RSS MIT Sloan Management Review Blog

  • Why Less Is More in Data Migration
    As the pandemic continues, companies are racing to transfer data from old, bloated IT systems to more nimble, modern setups in order to launch new online services and maintain operating systems remotely. But few of these large-scale initiatives proceed as planned or deliver promised results. Many multiyear IT data migration programs fail — often at […]
  • The Best of This Week
    With Remote Collaboration, Sometimes Conflict Is a Good Thing Remote work environments lack the spontaneous exchange of ideas that can naturally occur in an in-office setting. To spur innovation in this challenging context, leaders have to be skillful in connecting with employees at all levels of the organization while encouraging rigorous debate. Why Good L […]
Website Powered by WordPress.com.
Cancel

 
Loading Comments...
Comment
    ×
    <span>%d</span> bloggers like this: