Why Mobile Gaming Startups are Risky
How 5 game veterans spent two years on an awesome game that failed.
I spent roughly the last two years of my life at a mobile gaming startup in Oakland that shuttered its doors a few days ago. We divided up our meager assets, turned in our work machines, and cleaned out the office. As I packed up my car, full of potted plants and assorted office supplies, I kept going over the situation in my head. How could our brilliant idea and great product tank?
Leaving my cushy day job
From 2010-2012, I worked at hardcore social game maker Kabam. It was an interesting place to be at the time. The company grew from 50 to 500 people while I was there. The growth seemed unstoppable. The games were all outpacing each other and raking in tons of cash every day. This was mostly on the Facebook platform, and we could see that mobile was the Next Big Thing. After a while of being at any company, there usually comes a point where a little seed of an idea plants itself in your head. You look around and begin to think: “I could do this on my own. What’s stopping me? Why are these guys making all the money while I do all the work?”
It was around that time that I got a proposal from a few engineering friends who had already left Kabam to form their own mobile company. They had built a few games on their own, and had a lot of experience from Kabam and other gaming startups before that. They knew the tech inside and out and I trusted them for the most part on the game design end. (Frankly, game design these days is mostly just nabbing your favorite ideas from other games and mushing them together.) I would be coming on as Art Director. The one major catch: They were bootstrapped. Zero funding. The deal was to go without a paycheck for one year, then rake in the cash once the game got big.
I had a few hesitations before I joined — Could we all really go that long without a source of income? How did they plan on marketing the game? Acquiring users? Then came their solid gold selling point: They already had an acquisition offer on the table. If I joined, I was basically guaranteed a great financial exit. Pushing my questions aside, I said yes, and plunged in headfirst. I quit my job at Kabam, signed the new paperwork and paid thousands of dollars for my company stock. The next day I was working with my friends, on our own schedule, on a game we were really excited about. It was an incredible feeling.
We had a few solid months of great progress — the game went from a bare skeleton of a few buttons and temp art to a well rendered, smooth, and arguably fun experience. Our bank accounts were holding up fine, and we were becoming so confident in our product that we stopped discussing the acquisition offer that had once been on the table. We kept an eye on the top games in the App Store and made sure that the experience we were delivering could come close to matching what players would expect.
Classic Startup Fails
What we should have learned from any book on startups.
We didn’t have an office.
This may be a no-brainer, but for a bootstrapped startup, an office seemed like an extravagance. Instead, we all worked from home and had a chat room set up where we sent messages. Unfortunately, this led to a lot of communication issues, at a time in the product development when good, clear communication was essential.It wasn't until a full year after the company was formed that we finally found an office space in Oakland where we could all work together. Productivity immediately skyrocketed.
We didn't voice concerns early on.
When there are just five of you building a game, every voice should carry a big impact. We purposely set out to build a game that was different from the other ones we saw on the market, but it took us a full year to realize that some of those design changes made the game much more difficult to play. There’s a reason that all of Kabam and Zynga’s games get skinned a hundred times — they've found a formula that is proven to work. Some of us on the team had concerns about core game and interface design, but did not push for changes early on, when they would have been easiest.
Lack of structure, lack of focus.
When you leave corporate life, you have this innate sense of freedom that you don’t want anyone to mess with. And when you’re not offering your employees a paycheck, the only real perks you can give them are the lifestyle ones — unlimited vacation, no official work hours, etc. At first that was great, and then it got out of control. People (including myself) would disappear for weeks at a time, then try to get back into the groove, all the while working from home. This just doesn't work.
Fail early, fail often.
It took us a very long time to determine whether or not the game would be successful. We launched it once, watched it sputter and fail, and decided to make massive changes to it and relaunch it again under a new name. At this point, we had pushed way beyond the one year mark we had set for going on as bootstrapped and everyone was poor and burned out. One year on a failing product is insane in the startup world. We should have made a decision to kill the product within the first few months if it wasn't working, then gone on to try other games that might have worked better. (We did go on to make a few other smaller games, but none that really stood out as hits.)
The Risks of Mobile Games
The landscape changes FAST.
When we began our gaming startup in 2012, small game companies like ours were being bought up left and right by Kabam, Zynga, EA, etc. Everyone was trying to get a slice of the App Store. Flash forward to a year and a half later, and that has all but dried up, including that acquisition offer that was on the table when I joined my company. Zynga went public and their stock took a nosedive, Kabam has been laying off chunks of its team, and the general business is not looking great.
Relationships with Apple and Google are crucial.
I heard a (completely random and possibly untrue) tidbit the other day — that App Store featured placement can be worth $6-7 million in ad spend. I believe it, though. If your game is lucky enough to be featured in the App Store, you are set for life. Your traffic will grow organically and you will just sit there, perched in that Top 100, almost impossible to knock off. But HOW do you get featured? It is a highly guarded and near impossible system to break into. God forbid you live anywhere outside of Silicon Valley and don’t have the opportunity to wine and dine the App Store overlords.
Your game is not unique.
Everyone and their mom has an app these days. You may think your game is groundbreaking and fascinating, but it turns out it’s just a poorly implemented clone of Candy Crush. How do you differentiate yourself and get noticed when there are 10 other apps you could be confused with?
Multiple devices will be the death of you.
We came to a point where we decided that being only on iPhone was hurting our chances of getting featured by Apple. Surely, putting the game on iPad would get us featured and increase our revenue! Almost a full month of design and coding was sunk into the iPad version, with little fanfare and no attention from Apple or players. Stick to one device until you know the game is a hit.
User acquisition is much harder than you think.
I really wish I had trusted my gut when I asked the team how we were going to market the game and get lots of users. Strategy games like the one we were building need at least 10,000 daily active users to really get a good taste of the experience. We never even came close to that number, even after spending thousands of dollars (of our own money) on ads.
No one knows a sustainable model for mobile yet.
At least no one that I've seen. The money spent on ads is often just barely breaking even with the revenue (post-Apple’s 30% take, of course) So, unless you are counting on Featured placement, good luck with getting anywhere on just running ads alone.
Talent and brilliant ideas will only get you so far.
Money and connections will get you the rest of the way. I recently met with a business development guy who was looking to start his own gaming company. He made it very clear that the games themselves really don’t matter — it’s all about who you know and if you can throw enough money at them. So much for the indies.
Moving On
Towards the end of any company, you can generally see the writing on the wall. The ironic part for us was that the game was actually just starting to do pretty well. Revenue and active users were looking good, and we had not even attempted any sort of viral hooks for the game. But we had been in this gray area before, and the lack of a decision was what had pushed everyone 9 months past our original cutoff date. Pretty much everyone had simply had enough stress, and were ready for a paycheck and benefits again. An acqui-hire offer came down the line for the engineers and they split. Meanwhile, I was able to convince one of them that we should keep the game alive, and basically treat it like a hobby. I’m not the type of person to give up on anything, and honestly that is probably the worst quality when joining a startup. I plan on teaching my kids the value of failing.
I don’t regret quitting my corporate job and forming a startup that failed. It was the most exhilarating work experience I have ever had, regardless of how it ended. We built an awesome game, with a growing fan base and a tiny bit of money trickling in. I owe my girlfriend about a thousand backrubs for helping to support me while I tried to make this company work.
If I had to do it all over again? You bet I would.
Our game is still alive and kicking, but being developed at a slower pace. If you’d like to see it, check out our official page or download it.
