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Comment by tixocloud | Hacker News Reader

True for most gaming companies. Always a big challenge of figuring out the next big hit. You're always only as good as your previous hit.

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This is exactly why I don't understand why people buy publicly traded video game stocks. Nintendo, I can understand. They're a platform company. Their ability to make money depends on overall industry trends and the ability of other companies to do the heavy lifting of outputting hits. Although even they're a bit strange in that they depend a lot on a portfolio of homegrown titles.

But normal game companies? Especially casual game companies? Do people really have that much faith that Candy Crush and the like is more than a generation's flash in the pan like Tetris, Pogs, or Tamagotchis?

> Do people really have that much faith that Candy Crush and the like is more than a generation's flash in the pan like Tetris, Pogs, or Tamagotchis?

No, but people have faith (quite often irrationally so) in their own ability to time the market, and be able to exit at the right time.

I'm not sure I am comfortable with Tetris being lumped with the other fads named here...

It was a one hit wonder hit, which is what OP was referring to.

Tetris, having sold more copies then the next 9 top games combined, across multiple platforms and many years, is certainly not a "flash in the pan".

Fair enough, but I think Candy Crush and others have reached that status too, no, across multiple mobile platforms? My point is that although Tetris is an undeniable classic much cooler than Candy Crush, it didn't cross generations very well.

I think this is where crowd-funding can be a better platform for main street investors interested in this space than the stock market. Investing in a game idea that you like helps the game get made, but if it's a runaway hit, as long as there's a mechanism to distribute the cash windfall to those crowdfunding investors, it seems like a much better option than trying to grow to IPO only to burn out a few years later.

But I think the boom/bust cycle is exaggerated with these kind of "casual" games. There are diehard Nintendo or Sega fans; who anxiously awaits the next release from Zynga? What percentage of players even know or care that Zynga made the game they're playing?

I think you've hit on an excellent point that Zynga is missing. Zynga's missed an opportunity to brand themselves and build out their community of die-hards.

Well, their model trades depth for breadth -- when that's working it's very profitable.

That does seem to be the case. I don't know that this is a matter of Zynga's brand so much as the lack of unique gameplay, or perhaps (optimistically) players becoming exhausted by the constant upsell, paying for more turns, etc. A game like Farmville could be an evergreen category -- surely there will always be people who want to play farm sims. Maybe they could be counted on to buy a Farmville sequel every few years. But not many people can be kept on an intermittent reinforcement treadmill for such a long time. They get tired of it, and when a sequel comes out, they decide not to get started on the treadmill again. Or, to seek out a new treadmill where they feel justified in wasting money.

Well, I guess what I mean to say is their games do not attract the sorts of players who would learn about the developer and follow them; they attract people looking to kill time on Facebook.

Zynga is only nominally in the same business as EA and Activision. It is in the business of making games, and so are Activision and EA. But the latter two are really in the business of making hits and nurturing brands and franchises. Zynga is in the business of finding profitable models, arbitraging installs, right-sizing the game model and economics, then replicating over and over again, treating each successful game like a Starbucks location. A very different sort of franchise, you might say.

Activision and EA are movie studios. Zynga is a casino. Activision and EA want big hits and loyal fans. Zynga doesn't really care if you've played any of its previous games, or whether you play games at all; it just cares whether you'll play right now. (And maybe later, and later, and then more after that.)

Yes, but it's a casino whose gamblers aren't particularly invested in gambling, necessarily.

Neither are the vast majority of casino gamblers, I'd imagine. They don't go to Vegas solely to gamble all the time, but Vegas casinos try their best to get them to gamble while they're there. It's all about impulse manipulation and getting them hooked.

(Of course, casinos also have their whales, as do Zynga-style games.)

But once you find it, oh boy, can you make it make money. I'm always astonished at how companies like Activision can make billions per release of Call of Duty. EA with their yearly cadence of sports sims is another example.

Agreed. EA is just killing it with sports despite it being essentially the same game over and over again.

It's such a tough business given that you need to invest in building a full game before you really know if it's going to be a hit. You could put out concept art, etc. but I'd argue that you can't really do "private betas" like what we do with SAAS just yet.

It's too bad Notch's (who made Minecraft) blog got lost. He blogged almost daily when he made Minecraft. It's basically an instruction book on how you should do it!

What was the main take away? Why did minecraft hit it big and not his previous games? Could he do it again if he tried? I doubt it. At some level, the difference between 'profitable' and 'runaway success' is dumb luck. Why flappy bird?

He had just worked one week or so when he showed a crude demo/prototype on IRC/forums. And people thought it looked cool. So you do not have to, and should not wait until the game is finished before showing it to ppl and start writing about it on chat and forums.

When the game got into a playable state he already got some followers. And the word started to spread. It was still a free Java applet at the time. Then people started to play it on Youtube and it exploded. And that's when he started charging 10 bucks for the game.

I think it's clear, however, that EA's sports games are a bit of a monopoly. It's easier to be successful if you have no competition because they're not legally allowed to use anything related to real professional sports players or team names and iconography. The general world of gaming is different, though, because it's so (comparably) easy to take the fun bits from games you like and throw your own clone up on steam.

I think in EA's case what you see is the power of unique licenses. People who buy football games want to play as their favorite real-life players and so 1) in practical terms nobody but EA can make football games 2) even if relatively little changes many people will buy just for roster updates.

Sports games are like toll bridges: people will grumble and pay. COD is a different beast, a brilliant cash cow that makes Halo pale in comparison. But it's futile to expect any innovation in the mainstream sports game industry, because it's so furiously locked down.

Thing is their only competitor is PES, arguably no better than Fifa

I meant American football, where they actually have an exclusive license with the NFL.

Whatever you may think about PES, FIFA was forced to evolve a lot to compete with it (everyone used to think PES was better). Progress has been more modest for Madden, which has had no competition for something like a decade.

EA (and its peer competitors, e.g. Activision & Ubisoft) is also very diversified in terms of its product portfolio, which reduces risk. They publish games for PCs, all the different consoles, and all the different mobile platforms. They publish casual games and also hardcore games. They publish games based on licensed IP and games based on original IP. Etc.

This makes them a safer bet than companies like King or Zynga, which bet the farm on one particular quadrant of the overall gaming universe (casual games on mobile devices). If the world stopped playing games on their phone tomorrow, EA could survive that.

True of MOST TECH companies, which are one-hit fade-aways. The ones that last more than a decade have had a 2nd or 3rd hit like MicroSoft and Apple.

True of tech companies that involve attempts at locking in users. People are learning to resist being locked in, but will still play along if the benefits are overwhelming (Apple products, MS Office, etc.).

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