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Kristian Segerstrale: The best companies “are punched in the face a few times”

The Super Evil Megacorp CEO discusses industry challenges and how Vainglory's fall led to a company reset and new strategy
Kristian Segerstrale: The best companies “are punched in the face a few times”

The best games companies that can last for the long-term are “punched in the face a few times”, says Super Evil Megacorp CEO Kristian Segerstrale.

He was speaking at Develop: Brighton in a fireside chat with founder Neil Long, entitled “The State of Games: Platforms, Funding and the Future”.

Discussing the state of the industry, Segerstrale reflected on the sector’s current challenges, including thousands of layoffs and a number of studio closures.

“It doesn’t look great when you look at it at face value,” he said.

He noted, however, that zooming out, the industry has more than doubled in size over the last 10 years, with three billion people playing games.

That's not to underestimate the challenges the industry faces today, he said, but there are lessons that can be learned to build a better, more resilient company when problems arise.

“The best companies in the long-term are punched in the face a few times on their journey,” he said, adding that when the industry punches you in the face, "the best thing you can do is learn from it".

Vainglory's struggles

Segerstrale has a long history in the games industry (he also received the Mobile Legend accolade at the Pocket Gamer Mobile Games Awards 2018). He has founded studios such as Macrospace (later known as Glu Mobile), Playfish, which was acquired by EA, and investing in studios such as Supercell.

Segerstrale was also an investor and COO at Super Evil Megacorp, where he is now CEO as of 2017. The team’s first title was 3v3 mobile MOBA Vainglory.

The title found early success, racking up millions of players. As a result, the company continued investing into the title and tried to chase the success it had found. However, after a couple years of growth, the game stopped growing.

“We tried everything,” said Segerstrale, adding that the team tried adding new game modes and business models, but ultimately couldn’t get Vainglory to grow again.

He said part of the issue was the cosmetics-based economy Vainglory used, particularly as a skill-based game. Segerstrale explained that though Vainglory had millions of players, it still wasn’t large enough to support the cost base it had run up - which included its expanding California team to 100+ staff and running esports tournaments.

He added that the game had a “wonderful community” and it was “so painful to see that game declining”.

“Franky, we didn’t want to face that,” he said, adding: “We got tunnel vision… we didn’t have a plan B.”

Company reset

The game’s troubles ultimately led to Super Evil Megacorp having a reset of its strategy, cutting its team from over 100 developers to around 20.

The studio has since grown back to over 100 staff across three development teams, and now makes new games every one to two years, and is focused on being a cross-platform company making co-op titles.

It has worked on games such as Catalyst Black and Teenage Mutant Ninja Turtles: Splintered Fate. It's also currently working on a new co-op action title based on the Rebel Moon IP.

Segerstrale said there were two big lessons he learned from Vainglory’s struggles - though noted that there are, of course, exceptions based on individual circumstances.

He stated the team should have understood earlier that Vainglory was fundamentally a game for a relatively small audience - millions of players, but not hundreds of millions. He said the studio could instead have managed the game more profitably.

Segerstrale added that games growth can also vary, so teams should be prepared for when a title does decline. In the meantime, they can build genre expertise and their tech stack so they are able to work on their second and third games.