Hacker News Reader

Comment by comrade_ogilvy | Hacker News Reader

The niche is growing and will continue to grow into the foreseeable future. So making a good profit is possible.

However the competition is heating up quickly to nuclear fusion temperatures. Every useful app or silly game on every smart phone is effectively a direct competitor -- Zynga needs people obsessing on very certain games for hundreds of hours, enough time to punch in real dollars on the whim.

Furthermore, this is an inherently unsticky kind of niche. Every customer will need to be won over again in 12 months or less, as they tire of that one charming game.

The stock is going to crater...

View on HN

Furthermore, this is an inherently unsticky kind of niche. Every customer will need to be won over again in 12 months or less, as they tire of that one charming game.

Full agree with this statement. If you look at titles like Candy Crush, sure, they're doing amazing right now, pulling in huge numbers (users and revenue) - but in 3-6 months - they won't be around. Retention will switch over to the next 45th copy of Bejeweled.

It's actually a very interesting model. The same games are re-created by new "startup" companies every few months. 1/100 hits and becomes a Top-10 item in the app store. The game gets huge traction by leveraging FB's massive user base, company puts together obscene numbers showing engagement, in-app purchases, growth projections (which end up diving after a few Q's) and then go out and raise Series-A rounds.

What I CAN'T figure out is - are VCs really this dumb to invest in companies that won't be around in 12-18 months? Maybe they're not, maybe it's the VC model that's flawed. Invest in 100 companies @ $1.5-3M per and 1 will go public or get acquired and we'll make our money back. But this is an entirely different conversation.

It's like watching fireworks and thinking "ooh I really think that purple one is different!".

This is how most VC's and kids calling themselves "entrepreneurs" these days see the world.

If I have to hear one more idiot with an app or another 56th version of a similar service like Instagram say they're "changing the world" I might lose it. Ha!

Candy Crush may be a bad example... King has been around for 10 years, so not really a startup. They're somewhat similar to Rovio in having a late hit.

It depends what they do with the success that determines their future, I'm pretty sure they're aware that Candy Crush is a fad, just a matter of exploiting it while working on the next thing.

I'll give it up to Rovio.

They had an original idea, a great product, they kept releasing new additions to the product. They built a large business around it. They branded the product, they created merchandise, they never scummed their employees and took their early equity.

They're a good company.

Don't you think Angry Birds was rather "inspired" by Crush the Castle[1]?

They did well milking the idea for every penny, and I think they were a key driver of the casual gaming genre (along with Zynga and their Facebook gaming) but I think they were pretty lucky with a few key celebrity endorsements.

[1]http://en.wikipedia.org/wiki/Crush_the_Castle

Never played Crush the Castle. And now that I looked it up, well, there goes the originality of their IP. Unreal.

They are also using Box2D but will only admit if you ask question face to face in public. And that phys lib is the crux of their gameplay.

Certainly a good part of the mechanic of Crush the Castle there, but the main differences are:

1) Aiming where the projectiles go is easy 2) Most projectiles use "powerups"

Which to me, make the games as different as say, Mario and Sonic.

Zynga's remaining value was $1b in yearly revenue. Q2'13 they lost 45% of that dau in 12 months, which means revenues just halved.

Mattrick is now a Nasdaq CEO. Totally worth it to him.

We're looking at no more than four shrinking quarters after which Zynga will fold or transform through some transaction. Pincus gets to say it wasn't his fault.

Reply on news.ycombinator.com