Given my post on Tuesday, I thought the post today on Inside Social Games confirmed many of my thoughts about the increasing influence of brands:
Events over the last weeks are showing that there is a tremendous opportunity for brands and IP from other media to make a major impact in social gaming. In fact, when we were pivoting Merscom from casual to social games, there was a strong belief from Zynga down that there was no value to IP in the social gaming space.
Properties Prove Their Value
In the past few weeks, entertainment properties have clearly shown they have a place in social gaming. After 20+ social game launches, Ubi Soft had its first real success, The Smurfs & Co, which exceeded 1.3 million DAU with no Facebook advertising. More recently, the Dirty Dancing game (based on the Lionsgate IP) has been in the top-10 of fastest growing Facebook apps almost every week since its launch. The most interesting, and telling, development is Zynga’s decision to use the Indiana Jones name with Adventure World. As Zynga never makes an arbitrary decision, its data shows that using an IP such as this has a positive ROI. This phenomenon began with the first real success using a TV IP, AETN Lifetime’s Pawn Stars game. This Facebook game was able to break the top-50 with a brilliant cross promotional game tied to the TV show in lieu of Facebook ads.
How to Choose a Property
Succeeding with a brand is much more than just throwing a property on a social game. Our industry is not like the packaged software/game space, where a well-known property gets somebody to buy a boxed product in Walmart. Instead, in social gaming, the property helps elevate the game over the noise and get people to try it and hopefully enhances the gameplay experience; it does not guarantee revenue.
About five years ago at Merscom, we were able to become a top-5 casual game publisher even though our resources were much more limited (we had less cash ) than our competition by leveraging strong entertainment brands. Many of the lessons I learned during this period are applicable to social gaming, so here is how I recommend you evaluate properties:
1. Strength of the Property While a big property can have a huge impact on a social game, there are literally millions of properties available and many will have no impact on the success of a game. An old television series or movie is not likely to prompt people to click (unless, like Dirty Dancing, it has a strong relationship with loyal fans). The same can be said for many cable tv series as you are already starting at a much lower point than broadcast tv (the broadcast television networks – CBS, Fox, ABC and NBC – have orders of magnitude more viewers than even popular cable networks).
2. Demographic of the Property You need to make sure the show is popular with the demographic you plan on targeting. A show or movie that you love may not be particularly attractive for the core social gaming demographic. At Merscom, when we were using IP for casual games, our target market was 30+ women. The IP that had the most success for us was based on the Lifetime networks shows (particularly Blood Ties). It was not properties based on the type of television or movies I normally watched.
With social games, this decision is an even bigger issue. A key element of a game’s success is the ability to acquire users through Facebook ads. The costs of these ads vary dramatically based on the target demographic. Thus, if you license a property that targets 25 year old men (the costliest demographic), such as Two and a Half Men, it may cost you more than twice as much as it would to promote a game that targets older women. You need to license a property that will enhance your user acquisition strategy, not provide an additional hurdle.
3. Marketing Commitment of the Licensor In addition to the strength of the property, the Licensor’s ability and commitment to promote the title is very important. The costs of acquiring users on Facebook (and mobile social) continues to increase, so a major benefit you are getting in licensing an entertainment property is a low-cost way to acquire fans of that property. If the media company is simply looking to give you rights and then get a check without any effort on their part, there is very little value to the IP. Instead, you should look at the license (or different deal structure) as an integrated opportunity to get a property and promotion through the partner’s consumer touch points (TV, web, retail, other consumer goods, etc.). The inspired campaign I mentioned earlier that AETN Lifetime used to promote Pawn Stars (cross promotion between the game, on air with the television series and through the website) is the perfect example of how you would want your media partner to help you build an audience for your game.
4. How Well the Property Translates into a Game Even if a property does well on the above three criteria, it needs to extend naturally into a game. The recent Big Bang Theory social game is a great example of what not to do. Although it is too early to have definitive data, I will go on record as saying it will fail. I am not making this claim because of the property, it is a very popular show from a network that has enormous power with social gaming’s core demographic. But the property just does not work as a social game, thus the game (Mystic Warlord’s of Ka’a) has virtually nothing to do with why people like the show. The properties that do best as games are ones that allow developers to extend the experience to the game, not just slap it on as a marketing tool.
5. Deal terms While deal terms are important in any deal you do, and any licensing deal, they take on a greater importance in social gaming. Rather than just affecting total profitability, the deal terms can actually be the difference between a successful game and one that never gets traction. If the revenue share (royalty) to the Licensor is too high, it becomes impossible to promote the game. Most social game companies will buy performance advertising (i.e. Facebook ads) until the cost of these ads exceeds the lifetime value (LTV) of a new user. The lifetime value is a function of virality, retention and revenue per user. If a large part of that revenue is going to the Licensor, it drops LTV. The greater the revenue that goes to the Licensor, the higher the impact on LTV. Thus, if the deal is too “rich” towards the Licensor, you may never be able to justify promoting the game and it will never gain critical mass.
I have always believed that entertainment properties represent a great opportunity for social game developers and my convictions are stronger now than ever. That said, the recent successes of properties in our space will probably lead to everyone pursuing these properties and hundreds of branded social games in the not too distant future. Thus, to be successful, rather than licensing mediocre IP number 101, be judicious (and patient) in the property you select, negotiate a fair but not unreasonable deal and create a great game. At least that way you are putting the odds in your favor.
I was recently asked to speak later this month at Casual Connect about how east European (including Russian) talent can succeed in social media. The underlying ideas is that teams from Russia, Ukraine, Poland, etc., have come to dominate the casual download gaming space (i.e. hidden object games sold on Big Fish), yet have not had similar success on social media. Upon thinking about the subject, I realized this basic precept itself is a misperception but there are things that these teams can do to succeed on Facebook.
Russians are Succeeding on Social Media
Let’s start with the misperception, that Russian (and other east European developers) have failed to gain traction on social networks. The reality is that these developers are quite successful on many social networks, including the three primary Russian social networks (Mail.ru, Odnaklassnike and vKontakte) and the Polish social network (Nasza Klasa). There success is not limited to their “local” social networks, as you see games that originated in eastern Europe at the top of the charts throughout Europe (Germany, the Netherlands, Spain, etc) and even Latin America. Where these developers have failed to gain significant traction is on Facebook, more specifically English-language games on Facebook. So it is not as if east European companies cannot create compelling social media game content, it is that they have not been able to penetrate the Facebook market (a big distinction in my opinion).
Why the Difficulty on Facebook?
The fact that East European and Russian developers have succeeded on social media does not offset their lack of success on Facebook, in fact it magnifies the problem as it shows they have the skills. So why have these companies had such difficulty on Facebook:
1. By far the greatest impediment they face is marketing. In the casual download market, there are partners open to bearing the marketing risk in exchange for part of the game’s revenue. Big Fish Games, in particular, has tremendous marketing muscle and can deliver millions of potential customers to an east European developer with no marketing expense by the developer. There is no equivalent of Big Fish in the social gaming space. The few publishers focused on Facebook are themselves extremely small compared to the major social game developers. Thus, they cannot even the playing field the way a Big Fish or Real Networks does. This phenomenon plays itself out in two ways. First, the major Facebook companies throw tons of money at their games, often millions of dollars per month to support the launch. Second, the creative is perfectly targeted to the US market, as it is developed locally by marketing experts. Most, if not all, east European developers cannot match this marketing.
2. The cost of developing a AAA Facebook game is orders of magnitude greater than the cost of developing a AAA casual game. The top Facebook game companies (i.e. Zynga, EA, Playdom, etc) regularly spend well over $1 million to create a game, then have huge teams creating new content for the game once it has launched. Conversely, in the casual space, a team can create a competitive game for less than $200,000 (sometimes much less). Even with the differences in costs between San Francisco and Donetsk, the huge investment by the major Facebook game companies translates into a much deeper and more polished product. While the mechanics of the east European games are often sound, and thus the reason they succeed locally, they are just not as deep or polished as their competitors.
3. The top Western developers have embraced analytics more than their Eastern competitors. Most of the Russian and east European social game companies come out of the casual or core gaming spaces, where design, art and creativity largely rule the day. Conversely, at their core, most of the major US companies are built around analytics and testing. Before you say Electronic Arts, even they had to make a major acquisition (Playfish) to build the core competencies needed to thrive in social (The Sims Social has a much greater Playfish influence than Maxis influence). The ability to pivot from a design-centric development strategy to an analytics driven strategy cannot be underestimated, very few companies have been able to make the transition. This is not an East European vs West phenomenon, as the social game graveyard is littered with companies unable to make the transition (look at the top Western casual game developers, Big Fish, Sandlot, Playfirst and tell me how many hit social games they have produced).
What is an East European Team To Do?
Given these issues, what should east European development teams do. First and foremost, decide if they want to be in the space. Yes, a successful Facebook game can generate tens of millions of dollars in revenue but most developers are not going to succeed. Do they want to risk their core business to try to penetrate this market?
If succeeding on Facebook is a priority, then there are several steps a Russian or East European team can take to improve the odds. First, partner with a western company. When I was at Playdom, we worked with multiple east European teams. Partnering with a US based company, if it is the right company, allows a Russian or East European team to leverage their marketing muscle, learn what they have learned on the platform and potentially enter the market without the marketing costs of going it alone. As I mentioned earlier, there are not many pure publishers, so an East European company will need to be creative in finding a partner. These days many of the top Facebook game developers are capacity constrained, so they may be open to partnerhips if structured attractively.
One method I had great success with during my Merscom-years was co-production. In this model we would share development costs with a partner (usually a media company) and then share revenue. This model could easily be extended to the social game world, with a variant being that the East European team takes on a greater share of the development costs in exchange for its western partner taking on a greater share of the marketing costs (which in the Facebook world, can often be much more than the development costs).
Another option is to partner with a US media company to create a social game based on television or movie IP. Again, at Merscom, we had great success partnering with media companies to create content that was differentiated from our competitors, thus reducing our advertising costs. In social, currently, branded content is seeing tremendous momentum (The Smurfs is a surprise hit while Dirty Dancing has been in the top-5 of fastest growing Facebook games since its launch) but there are still many opportunities. By finding a media partner with strong IP, a Russian or East European team can create a game that does not have the same marketing challenges they would face using original IP.
A third option is for a a Russian or East European studio to license its IP to a western team. If it has a game that has done great in the casual or core space, there may be an opportunity to partner with a Western company that already had Facebook expertise. Rather than feeling that it needs to develop the game, it can find a successful Facebook studio that can take the IP and bring it successfully to Facebook.
A fourth option is to raise capital and focus on Facebook development. Nobody can be successful by treating Facebook simply as an additional platform, no matter the company’s size they need to commit to it. Then they need to do it right. They need to create games as good, deep and polished as those coming from the industry leaders. The Russian or East European studio needs to devote as much to marketing the game as they do. To be successful, they probably need to raise at least $10 million, there are no shortcuts, and approach Facebook the same way someone in San Francisco would. This includes taking an analytics-first development strategy and creating a game that is built around monetization, virality and retention.
A Few Warnings
Regardless of the strategy, the Russian or East European team needs to be very careful about who it works with. Any deal needs to be attractive to all parties but makes sure the US partner is honest and looking for a mutually beneficial solution. Just because they are big or based in the US does not mean they are good to work with. There are many companies that do not honor their contracts or structure contracts in such a way that provide them with a huge advantage. Rather than go into all the things to consider, speak to other companies who have dealt with them (or ones who just know them) and see what he reputation is. Learn if they have a history of screwing people or if people work with them again and again. Let me end with a very good rule of thumb: It is a bad sign if they have law suits against them, it is a good thing if they have long-term partners.
Rather than reiterating what has been written elsewhere, I wanted to post my thoughts on Steve Job’s impact. I am far from an Apple-phile, I have always pushed for DOS and Windows over Mac, did not have my first iPod until I was given one about three years ago and thought the iPhone did not have a chance in the crowded mobile market, but I believe Steve Jobs was arguably the most important person of the last ten years.
Not only did he turn around Apple (to put it mildly), but he saved the US tech industry. Unlike the other tech leaders, Apples products caused excitement throughout the country (and arguable the world). Not to diminish the contributions of the Facebooks and Oracles of the world, but what Steve Jobs built at Apple captures the imagination of entrepreneurs and business leaders and individuals throughout the world. This excitement translated into an energy in the Bay area that drove and continues to drive a confidence and dynamism that is created billions of dollars in market cap, thousands of new companies and tens of thousands of jobs. Steve Jobs did not only turnaround Apple, but is largely responsible for one of the few bright spots in the world economy, the robust tech sector.
A few months ago, I wrote about my feelings regarding the best opportunities on mobile for social game companies, particularly how I saw the iOS vs Android battle playing out (https://lloydmelnick.com/2011/06/30/ios-vs-android-the-battle-for-social-mobile-gaming-supremacy-lessons-from-history/). That post has led to a larger conversation, how should social game companies prioritize the various mobile and web social opportunities. Having been in the game business for almost twenty years (contributions accepted in lieu of condolence cards), I have seen my share of companies fail because they missed a migration to a new platform or get rich as they anticipated a platform change early.
My philosophy is that you should focus on being nimble and ready for new platforms rather than trying to anticipate the future. I have the same attitude towards financial analysts; they are no more likely to anticipate the future than monkeys throwing darts at a dartboard. Some will get lucky but most will underperform the mean over time. It’s the same in the game industry. It is actually quite arrogant for you to feel you know the future better than other tech leaders, so instead of trying to outsmart them, out hustle them.
Some of you may be asking why is this even an issue, Facebook is the big kahuna and you can make a lot of money being successful on Facebook. Yes, yes you can. But should that be your focus, or only focus, for 2012, for 2013 and beyond. Mobile is clearly becoming a crucial area for consumption of social media. Facebook itself is being accessed by over 350 million users a month via mobile devices. Social games on iOS are regularly among the top grossing apps. Even on the Web, Google+’s growth has exceeded all expectations (most recent figures put it at over 50 million users) and some social games are already generating more revenue on Google+ than their Facebook equivalents.
Looking at 2012 and beyond (which is the release date for any good game recently green lit), the decision becomes even more difficult. First, do you develop for Facebook. Although the biggest opportunity, there are well over 500,000 games and it is VERY expensive to rise above the noise. The next decision is whether to develop for the other web-centric social networks. The most obvious of these is Google+, whose growth has been phenomenal but staying power is still uncertain. Then there are the non-US social networks. Do you try to enter the Asian markets through RenRen, DeNA, Cyworld, etc., where there are more potential players than you have in the US? Do you risk the three-headed social monster in Russia – Odnaklassnike, Mail.ru and vKontakte – where piracy is still rampant but some games earn more than comparable Facebook titles? Should you spend time with the European social networks that are still battling Facebook, and often winning in their territories, like VZnet, Hyves, Nasza Klasa and Tuenti?
Mobile represents the same level of challenge. iOS is clearly the leader right now in the mobile space, but they you also develop for Android? This is a bigger challenge than just adding another social network, as Android develop entails optimizing for a myriad of devices with different displays, sizes, processors, etc. So even if you are developing for Android, you then need to pick the devices. Should you focus only on optimizing for the Fire, betting Amazon will be the main challenger to Apple, should you support the Samsung line of phones and tablets, should you go even broader?
I would argue also that the mobile decision is not simply Android versus iOS. Although a small part of the market now, Windows phones have a potentially bright future. Microsoft’s Nokia deal ensures these phones will get a huge opportunity, especially in Europe where Nokia is still a big dog. Counting out Microsoft and Nokia is still a huge risk. Despite the well documented woes Research in Motion(the Blackberry manufacturer) has experienced competing in the smartphone market, they still have double digit market share, global strength especially in the corporate sector and a lot of seasoned mobile executives. Again, you are taking a risk assuming they cannot turn it around. And finally, let’s not forget HP and WebOS. The TouchPad was obviously initially a failure, to the point of it getting “cancelled” and the CEO being fired, but the surprising demand for it at a lower price point may have changed the game. HP, the world’s largest seller of PCs, still has tremendous distribution worldwide, low-cost manufacturing expertise and the WebOS (formerly Palm) operating system that has been critically acclaimed. With Meg Whitman at the helm, it is too early to write HP off, either.
What to Do, What to Do
As I said at the start of this post, it is folly to try to predict the future. It is an even greater folly to rely on me to, so if I said develop for Google+, iOS and WebOS, your best bet would be to run away and delete your bookmark to my blog.
Instead, you need to shape your platform and development strategy to reflect this evolving landscape. If you have five games under development, do not focus them all on the same one or two platforms but provide options so you are protected if the environment shifts dramatically. If your company’s strength is Facebook, for example, have all products developed for Facebook but have one include a Google + version, another include an iOS SKU, another include Android and Windows, etc. The important feature here is diversifying your risk rather than betting you know exactly what the landscape will look like in the future.
On the development side, ensure the games are built to be ported easily to other platforms. I have worked on projects where development was poorly documented and so much was hard coded that we literally had to hire a team of hackers to reverse engineer the game to get it on another platform. This not only adds to your costs but slows your ability to adapt to market changes, so competitors get on the platform before you do. Instead, put in the time initially (which actually is not much time) to ensure that your products are well architected and easily modified for other platforms.
There are two final points I want to make on this post. First, do not try to alleviate the platform risk by developing for ALL platforms. That strategy guarantees you make multiple mistakes (i.e. developing all titles for a dead platform) and increases your cost and development time significantly. You can achieve the same expected ROI by creating a smart portfolio and moving quickly as the market evolves. Second, make sure your decisions are not US-centric. There is a huge market outside the United States and by looking at opportunities on a global, rather than San Francisco, perspective you increase your potential market and lower your risks
Although this post was a little longer than I would of liked, the importance of properly incorporating platform decisions in your strategy can mean the difference between success and failure. Make sure you look at all the options, both on the web and on mobile devices, and rather than trying to guess which ones will succeed create a portfolio that ensures success regardless. And build your products so if you are wrong, and everyone is at some point, you can quickly adjust and not even have to admit you were wrong.
The convergence of building my executive team at fiveonenine games and the US election cycle brought to the forefront the concept of the High Concept Candidate. I first heard this phrase during the 2004 Democratic primary. When General Wesley Clark entered the race, he was considered the perfect candidate to unseat (easily) the incumbent President. He was good looking, smart, a war hero, had extensive foreign policy experience and moderate views. Progressive friends of mine looking for a winning candidate made a significant campaign contribution to him as soon as he announced. He was the answer to a prayer from Democrats desperate to win back the White House. To make a long story short, after a few weeks when he was actually running for office, his campaign went down in flames as he had difficulty articulating positions and there was little substance behind the things that made him such a good POTENTIAL candidate.
This same phenomenon has played out twice recently in the corporate environment, with the failed leadership of Carol Bartz at Yahoo! and Leo Apotheker at HP. Both were selected by their respective Boards with very little due diligence by Board members. In fact, there are reports that most members of HP’s Board did not even feel a need to meet with Apotheker before hiring him. They were both enamored with the resumes and the narratives it allowed them to tell shareholders. How the selection would turn around the companies, allow them to execute on their vision, blah, blah, blah. What they did not focus on was how would the selection add value to the company, help them build or gain advantage and achieve a long-term goal. Getting a pretty candidate became more important than getting one who would perform.
I see in the social space a lot of high concept candidates getting senior positions and then delivering disappointing results. Given the age of the industry, there are very few people who have actually had many successes in the space. So selection (either consciously or sub-consciously) often comes down to how good the story you can tell your investors, Board or the markets is. That strategy works for a while (usually less time than you would think,) but often leads to dysfunctional organizations that can’t make money (or lose it precipitously), are rife with internal politics, suffer high levels of turnover or just lose their vision.
So what is the answer? When I find out, I will tell you. In the meantime, this phenomenon has reminded me to look at candidates deeply, understand what skills and strengths they bring to the table, see how they will contribute to the culture I am building. Most importantly, are they the person to create long-term value. It takes discipline not to hire the High Concept Candidates, the people who will look good on the About Us section of the website or make the Board/investors ooh and aah, but at the end of the day if you are surrounded with people who will create a great company, your life will be much easier.
The news last week about Netflix losing a much greater number of subscribers than anticipated reminded me of how arrogance can undermine any company, including the high fliers (present and future) in the social gaming space. Let’s start with the Neflix case. With NetFlix, almost everyone outside the company foresaw the ferocity of the negative reaction to its new pricing strategy. Nor was this reaction really a secret once the new pricing was public, Facebook, Twitter and traditional news sites were rife with stories about how unhappy Netflix customers were. Yet Netflix felt subscriber losses would be minor and people would forget quickly about their anger. Although they may still claim that they anticipated the level of customer loss, it’s obviously not the case. The company has lost more than 40 percent of its value since making the pricing move, very few companies actively trying to destroy more than a quarter of its shareholder’s equity. Moreover, if they really felt it was unavoidable, they would of better prepared the market for the losses, as markets dislike surprises more than they dislike losses.
So how did Netflix make this major miscalculation? It happened because within Netflix management confused high customer satisfaction with loyalty. Users loved Netflix because they were getting a good product at a good value. They did not love Netflix because of the pretty red envelopes or the neat logo. Thus, when the value proposition changed, people had no reason not to look elsewhere and did. Again, something that was obvious to outsiders immediately when the new pricing was announced was completely missed by the people making the decision, destroying billions of dollars in value and potentially weakening NetFlix’s market share where it will never recover what it previously had.
What is particularly interesting is that last week there was another piece of business news that reflected the same phenomenon. Research in Motion (RIM), the maker of the Blackberry, also missed significantly its projections, particularly on its Playbook tablet. RIM, like Netflix, dominated its market for years and had a huge level of customer loyalty. Even when Apple came out with a phone consumers loved, RIM both publicly and privately felt it would never lose its core market, business users. They did not look closely at the merits of the Blackberry line against the iPhone, they seemingly just felt that their customers were to loyal to ever switch. When they launched their first tablet, they did not put out a product that had either a feature or price advantage to Apple, but again felt they would succeed because Blackberry users would buy anything they tried to sell. WRONG. Again, consumers showed they are loyal to a good product and a fair price, but when that equation is broken they will switch.
One last point is that this phenomenon did not start (or end) last week. The history of business is littered with once-great companies that failed to deliver continuously a stream of superior products and found themselves fall from greatness to mediocrity and often to bankruptcy. Just to name a few, Sony with the PS2 to PS3 (on the B2B side, they treated developers awfully when they were on top of the world and on the consumer side they put out a product that was not priced competitively), General Motors from its heyday to its transition to Government Motors, Real Networks when it saw a dominant position in the casual gaming market collapse, Sears when almost every family shopped there rather than a store that ended in mart, and on and on and on. All of these companies believed they had a lock on the consumer and could continually erode the value proposition (or fail to deliver the higher value competitors were).
The social gaming space is evolving in a way that it will be very easy for companies to make the same mistake. A lot of the high flying companies now feel they own their customers. Coupled with a strong desire to make their numbers look better, this belief often translates into eroding the consumer’s value proposition. I am saying this on the web side of social gaming (Facebook as well as European and Russian social networks) and even on mobile social gaming, which has only been around awhile. If you are at one of those companies, beware, as you can destroy your relationship much faster than it took to build it. If you are at one of the fast growing companies also beware, when you get to that dominant position, remember what got you there and treat your users accordingly. It’s not only good for them, it is the only way to thrive.
Although I normally use this blog to discuss business issues related to social gaming, I wanted to elaborate on my recent career move and thank all the great people at Disney International that I have worked with the past year.
Today is my first day as the CEO of 519 Games (no, our website it not up yet). 519 is a joint venture of two media companies, the EW Scripps Company (http://www.scripps.com/) and Capitol Broadcasting (http://www.cbc-raleigh.com/). We are currently building a fantastic team and will be one of the top five social gaming companies (both social web and social mobile) by the end of 2012. More details will emerge over the next few weeks.
I also wanted to take this opportunity to thank all of my former colleagues with Disney International. The people I met and worked with in Europe, Russia, India and Latin America were some of the most incredible, smartest and nicest individuals that I have ever worked with. I originally was going to call them out specifically, but every time I wrote a draft of this post I remembered somebody else. I realized that no matter how hard I tried, I would forget someone who improved my experience.
From the top of Disney International down, it is an incredible and diverse group. Everybody was approachable, everybody was nice and friendly and everyone worked together. Yet the diverse personalities were what made the last year so great. Although it is difficult to articulate, I met literally hundreds of people who had larger than life personalities, all unique, all creative and all helpful.
It was this great collection of people that helped me learn and grow professionally that I can now move on to the biggest opportunity I have ever had. Again, thank you all.
For a space that is considered the cutting edge of innovation, social game companies are missing two of the biggest trends in the entertainment and online spaces. There are no major social games that allow players to create and share content. And despite Facebook’s efforts, there really is no crowd sourcing or popularity measures that help people find social games.
User Generated Content
Rarely a day goes by without seeing a major user generated content initiative, from Super Bowl commercials created by consumers to the explosive growth of Quora, yet this trend has been virtually non-existent in the social gaming space. Ironically, it is easy to find ways that consumers could create content that would elevate these games. Players are often frustrated at the lack of new content once they have been playing a game for months or even weeks. Why not allow the community to create new content that is then used to keep the game fresh. There are great amateur artists who could create new building or even crops for a Cityville. I am sure there are also players who would love to create hidden object scenes for a game like Gardens of Time. Not only would you get fresh content, you would content that he game team has not even thought of. A game with user generated content would take on a life of its own.
User generated content is an even more attractive option to compliment a social game company’s international strategy. What better way to make a game feel more French than allowing French players to create local content. International versions of many social games reflect the biases and stereotypes of foreign countries often found in the Bay Area, be it sticking a “bag-ett” in a French game or making a Kalashnikov the only local content for a Russian version. Instead, allowing local players to customize the game creates a local game for each market, one that almost certainly will be more viral and monetize better.
People are increasingly using different measures of popularity to make their choices, in entertainment, dining, purchasing, pretty much all aspects of life. Millions focus on top-reviewed restaurants on Yelp to pick a dining establishment, Amazon.com’s best seller list to find new books, trending Twitter topics to get their news, etc. As Bloomberg Businessweek pointed out in its 15 August issue, while there is no accounting for taste, the data can be helpful and even inspiring. Yet in social games, players cannot easily follow these trends. Seriously, players are not going to go to AppData to see the latest numbers. And Facebook does a terrible job of showing people what gams are hot, though they have tried a few times. The game companies are no better. If you are a fan of a Wooga game, can you easily find out which is their biggest game, not really.
This is another opportunity that takes on increased importance internationally. While foreign consumers often have different tastes, they usually like to use the performance of a product in one place to help them decide if it could be interesting. A movie that has failed in the US is much less likely to get traction in Poland, regardless of the merits of the film.
Overall, user generated content and better measures of popularity are fantastic opportunities for social game companies that can increase revenue and traffic significantly.
I recently finished reading a great book on building a company that leverages collaboration, Collaboration: How Leaders Avoid the Traps, Create Unity, and Reap Big Results by Morten Hansen and wanted to write about a few ideas that are relevant to social game companies (as well as almost every other company).
Hansen’s book provided several key concepts. First is the idea of disciplined collaboration. The key take away from this concept is that not all collaboration is good; it must generate results greater than people or teams working individually. Just collaborating for collaboration’s sake (as shown by regular useless meetings, conference calls with many participants who do not add or derive value or travel between locations just to meet but not advance a plan) is as bad as or worse than not collaborating at all. Collaboration should be used to generate value for the company, not as a checkbox. As Hansen points out, good collaborators know when to collaborate, when not to, and are willing and able to execute the selected project.
Analytics can also be applied to deciding when to collaborate. People should launch a collaboration project only if the net value of collaboration is more than the return minus both opportunity costs and collaboration costs. Hansen calls this the net value of collaboration premium. Mathematically, it is written as: Collaboration premium = return on project – opportunity costs (what the person could have done individually) – collaboration cost (travel, conferencing, etc.).
Hiring for Collaboration
Hansen’s book also provides some great principles for leaders to implement collaboration throughout their organization. The first and most important is hiring the right people. As discussed above, effective collaboration is disciplined collaboration, and you must hire the right people for this strategy. No matter how effective, you do not want lone stars. It is impossible to create a culture of collaboration when you allow some contributors to work individually. Even if they do a great job, it undermines the concept of evaluating all opportunities as to whether or not collaboration is beneficial. Moreover, it sends the message to others that collaboration is not necessary for career success.
Conversely, you also do not want to hire “butterflies.” Butterflies are those who flutter from person to person spending all of their time collaborating. This type of employees ends up wasting hours and days of their co-workers time, time that may be better spent on individual projects or other collaborations. When building your team, what you want is neither lone stars nor butterflies, but disciplined collaborators who collaborate effectively when it is needed.
Leading for Collaboration
The book also provides some great guidance for leading collaboratively. It is the leader who sets the tone for the organization. If you do not lead for collaboration, expecting collaboration from your team is wishful thinking. To lead for collaboration, you need to
• Set a unifying mission. If everyone knows their mission, it is much easier for them to see the benefits of collaboration
• Provoke a common value for teamwork. You, and the organization as a whole, should reward disciplined collaboration (and punish lone stars and butterflies). Hansen provides a lot of detail on how to coordinate compensation with collaboration and I will not over-simplify it here. I recommend you read the book to see what techniques you can use to create this value throughout the company
• Speak the language of collaboration. As anyone who has been in a leadership position knows, there is nothing more important to your employees than your actions. If you evangelize collaboration and do it yourself, that will have a stronger effect on your organization than anything else could
Although my blog is focused on the social gaming space, the above lessons and practices are valuable to any company. In social gaming, however, the market evolves so quickly that collaboration is a huge tool for maintaining a competitive advantage.