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The Business of Social Games and Casino

How to succeed in the mobile game space by Lloyd Melnick

Tag: microsoft

Don’t fight the last war

I recently read To End All Wars by Adam Hochschild, a book about the First World War, and although I was trying to avoid reading another business book, it pointed to some things very relevant in the business world. When learning about the mistakes the British military leadership made in World War I that literally cost millions their lives, I saw the same mistakes many leaders make in the business community. The key problem is creating competencies and strategies based on history rather than focusing on what it now takes to win.

Over-confidence

In World War I, the British and French suffered several defeats because they believed their past successes made them destined for victory. A lopsided victory in the Boer War, particularly the battle of Omdurman, gave the British a feeling of superiority. They felt their Maxim gun (the first recoil-operated machine gun), would always provide superiority. What they did not realize was that the weapon gave them superiority over poorly armed Arabs, Africans and Asians, and did not guarantee superiority against a well-armed enemy. This over-confidence, exemplified by John French, the first commander-in-chief of British forces in WWI, led to multiple infantry charges against well-armed Germans that cost millions of soldiers their lives.

The French also suffered a catastrophe due to over-confidence. At the beginning of the war, the French army proved incapable of containing the Germans flooding across the Belgian frontier. Additionally, in the southeast, a French offensive was disastrous. French prewar planning had centered on the mystique of the attack: great masses of men filled with élan rushing forward in shoulder-to-shoulder bayonet charges or thunderous cavalry assaults that would strike fear into German hearts. Furthermore, France’s troops went into battle in the highly visible blue coats and bright red trousers that had long made them the most flamboyantly dressed of Europe’s foot soldiers. This over confidence put the French, and the Allies, on the brink of defeat.

We have witnessed this same phenomenon repeatedly in the tech space. Research in Motion’s arrogance that Apple and others would not eat into Blackberry’s market share because it was so successful in the past, and Microsoft’s belief that the Surface would dominate the tablet market not because it was better but because it was a Microsoft product, are but two examples.

Not accepting change

While over-confidence often had disastrous results, even more damage was caused by strategy based on the past and not the present. General French, the first British commander in WWI whom I mentioned earlier, fought relentlessly to keep the lance as a cavalry weapon. In French’s mind, if the lance went, the next casualty could be the sword. In 1909, French won, and the lance was officially restored to the cavalry’s arsenal. No general was ready to acknowledge that the machine gun had upended warfare as it had been known for centuries. A single such gun emplacement could stave off hundreds, even thousands of attackers. Continue reading “Don’t fight the last war”

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Unknown's avatarAuthor Lloyd MelnickPosted on November 25, 2014December 3, 2014Categories General Social Games Business, General Tech BusinessTags microsoft, World War 1Leave a comment on Don’t fight the last war

The dangers of fast following

One of the biggest problems I see in the San Francisco/Silicon Valley area is the fallacy that fast following is a way to build a successful business. For those not familiar with this concept, it is identifying a successful business model or product, replicating it quickly and bringing the new company or product to market. There are some successful examples, none probably worth more than Microsoft’s fast following of WordPerfect with Word, Lotus 1-2-3 with Excel and Freelance Graphics with Powerpoint. This strategy generated hundreds of billions of dollars for Microsoft and its shareholders. This example is the exception rather than the rule, as fast following is more likely to sub-optimize or fail.
Fast Follower

A strategy built on arrogance

A key indicator that fast following is a flawed strategy is that it is built on arrogance. Fast followers are saying they can take an idea or product and do it better than the original company or anyone else. The question then arises, “Why are you going to be better?” Continue reading “The dangers of fast following”

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Unknown's avatarAuthor Lloyd MelnickPosted on October 2, 2013October 9, 2013Categories General Social Games Business, GrowthTags entrepreneur, fast following, microsoft3 Comments on The dangers of fast following

Know your competitors

I’ve been talking a lot lately about mistakes made in the game industry, but one that constantly amazes me is the failure to understand the competitive landscape. This issue is not new to the social gaming space; I have lamented this problem for nearly 20 years. I am always amazed at how many products come to market with no awareness of the competition. Developers and publishers end up losing millions of dollars that could have been mitigated—or even avoided—by basic competitive intelligence.

Your game should not be worse than your competitors

The most egregious example is when a developer/publisher releases a game that is clearly worse than the market leaders. This could be putting out a shooter that has a much lower frame rate than Halo or a hidden object game that does not look as good as the other titles on the market. Continue reading “Know your competitors”

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Unknown's avatarAuthor Lloyd MelnickPosted on September 4, 2013October 8, 2013Categories General Social Games BusinessTags candy crush, competition, Game development, microsoft1 Comment on Know your competitors

Microsoft’s Nook investment is huge for the social game industry

Microsoft’s $300 million initial investment in Barnes & Noble’s Nook unit is arguably the biggest news to hit the social game industry this year. Just last week, I was saying to some colleagues that there have not been any major developments in our sector recently. That changed yesterday. Over the next five years, Microsoft has committed to a total investment of $605 million in Barnes & Noble’s Nook, making it a bigger deal than Disney’s acquisition of Playdom in 2010.

Nook Tablet Continue reading “Microsoft’s Nook investment is huge for the social game industry”

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Unknown's avatarAuthor Lloyd MelnickPosted on May 1, 2012September 6, 2012Categories General Social Games Business, Mobile Platforms, Social Games Marketing, UncategorizedTags kindle fire, microsoft, nook, nook tablet, social games, social gaming1 Comment on Microsoft’s Nook investment is huge for the social game industry

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Lloyd Melnick

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

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

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