The PocketGamer.biz Mobile Mavens is our panel of experts drawn from all sectors of the mobile gaming industry.
The last couple of weeks has seen major changes at some prominent players across the industry from OnLive's near bankruptcy to job losses at Bejeweled behemoth PopCap and a 15 percent workforce cut at Sony Mobile.
So, we asked the Mavens:
Given the news from companies such as PopCap, OnLive and Sony Mobile concerning sudden restructuring and job losses, do you think the general optimism of the mobile space is now over emphasised, or are these just cases of big corporates trying to operate in a dynamic industry?
I think it reflects a shift to focusing on profits rather than market share.
Currently there are two real ways to succeed in the mobile space and neither of them focus on company profits. You either spend huge, loss leading, amounts of money per month to ensure your visibility on the charts - obviously now out of favour with these guys or you create enough titles to eventually win the game lottery.
Both strategies are high risk. Only the mobile companies themselves can help 'de-risk' the platform. Here's hoping.
Oscar Clark has been a pioneer in online, mobile, and console social games services since 1998. He is also author of the book, Games As A Service – How Free To Play Design Can Make Better Games.
Firstly, I want to say how sad it is for such a great studio as Sony Liverpool to close down.
There are some really fabulous people there and I have huge sympathy for them having myself been part of a wave of redundancies at Sony London Studio.
However, I believe that although its painful, this is not an end, but the start of a roller-coaster ride and a great opportunity for those talented people to unleash new creativity into our gaming world.
Sadly, its not a surprise that Sony would be looking to recover from losses and for me this is just a symptom of the decline of the console space.
I don't really know the circumstances for Popcap to be honest, but I suspect its just a symptom of what happens after a merger like this. Without having talked to my old contacts there I must say that it feels like a natural shifting of structure to me.
However, I don't think EA is immune to the market forces at work and the push for ever-higher quality and more marketing spend to get the same volume of users can't be helping.
Finally we have OnLive. Well I can't really say I'm surprised given that this is a company with such huge server-overheads, but its a high risk strategy which leaves me wondering whether it will ever get the lost trust back.
Being open-minded I do think its good that it kept the consumer experience continuously going, which perhaps gives them a fighting chance. The real question for me is, why didn't Microsoft buy it? Or is this financial restructuring necessary to make the sums work?
So, is this a signal of a trend for mobile? No. I think these developments have nothing to do with mobile. But that doesn't mean we ignore what is happening. The market is getting tougher in terms of promotion, and the costs of development are going up in line with an increased expectation of quality.
Risk needs to be managed, and that means we have to pay attention to our customers and where they are.
But at the same time it also means that there is now a pool of great talent looking to do something new - and that is a great opportunity!
I don't think the mobile space is overestimated.
Well, the mobile space I'm talking about here is just the smartphone and tablet industry, so obviously Sony, OnLive and PopCap's previous main concentration is not smartphone business - that's why they need to rescale their size to be more efficient.
I think there's definitely a decrease in optimism amongst the developers I speak with.
Budgets are getting bigger, both for dev and marketing, and the big companies are consolidating and controlling the space. The odds on the 'lottery win', as Jon Hare puts it, are getting worse.
However, I'm adamant that there's opportunity for big wins, but they'll come from strong, ambitious bets. The time for 'me too' is over.
At the moment, we are in the waiting lounge for some proper old fashioned publishing to re-emerge.
By this I mean publishing companies that see enough potential in a half-finished title to want to have a percentage of the profits from it - and maybe some shared control of the IP - in exchange for paying the developer an advance against royalties on the title, and handling the cost and logistics of marketing.
To reiterate, it is not normal for developers to need VC money to get going - making games for mobile is quite cheap if everyone in the company shares the pain and waives their right to being paid at the start.
If publishing companies were there to pick up promising looking titles at about 6 months in - as used to be the case on most other platforms in gaming history - then the better developers would be happy and the weaker developers would just die off. I see this as a win, win situation.
However, for this to happen the hardware owners are going to need to reassure this new wave of publishers that, based on quality of title, they can elevate these titles that are being backed in a more professional way out of the sea of mediocrity.
Also, the free to play model is inherently high risk. It would be interesting to see a media survey on what the net dev cost/money taken stats are for the average release on iOS and Android.
Alongside multiple industry roles, Volker is the co-founder Oystercrowd, Blue Beck, and Digital M. Former posts at BlackBerry and Scoreloop add to an enviable CV, which also includes the co-founding of Connect2Me
Let's face it: the sad closures announced this week are not actually in the mobile space but in the contrary from folks who have a non-mobile background:
Sony Psygnosis, THQ and even PopCap are not mobile games companies; they are/were traditional developers that moved out into the mobile spheres, some more (PopCap), some less (THQ) successful.
In particular in the last couple of years, mobile has dramatically changed: faster development cycles, faster change, direct marketing - versus the intermediaries that used to be there before, such as retailers, operators, etc.
So I would posit that the closures are not actually a sign of a deflation of the mobile space but, in the contrary, a sign on how significant the shift from the traditional channels to the new ones indeed is.
That it is very, very hard to adapt processes and business models quickly is a common place truth, that it is harder to do for large incumbents than for small, nimble players, too.
Also, we should not forget that the background to all this is probably different in each and every case.
I was personally most surprised by the PopCap announcement as I thought that its Dublin studio was outstanding and delivered great product. However, perhaps it was its legendarily long dev cycles that didn't make the numbers match? Anyone's guess, I suppose...
Last but not least, let us not forget that Activision just opened a mobile studio in Leeds.
Oscar Clark has been a pioneer in online, mobile, and console social games services since 1998. He is also author of the book, Games As A Service – How Free To Play Design Can Make Better Games.
I'd just like to raise a question about the role of publishers.
I agree that we will - and should - see an increased role for publishers in principle, but the market changed dramatically for online and mobile games when we stopped letting publishers dictate the market choices and instead used usage data - and had indie devs taking creative risks.
Publishers have to evolve too if they want to compete effectively in the mobile market and I think there is more disruption to come - especially when the grip that the app stores have inevitably ends
I worry for the mobile industry if we just follow the patterns from PC to console games. I think we need to cultivate a more sustainable model of new-school publishers competing for the attention of the best indie devs alongside the bigger AAA mega-projects.
If we end up with big publishers throwing their weight around I fear we will see a decline in innovation and another cycle like the one driving the redundancies we are talking about here.
I very much agree with you. The problem for 'new school' publishers is proving to their backers that they have a business model with a reasonable, as opposed to excessive, amount of risk.
Currently, some of the established big publishers are still focussed on market share and for this they will even sustain losses against profits. New school small and medium sized publishers cannot compete against such strategies without huge risk - hence the deadlock..
While it is true some small companies are still breaking through in the current climate, for every success there are probably at least 100 failures. 100/1 is not good odds.
The mobile games market is very strong. Some companies are not adapting to the market fast enough - they either joined the race too late or have not stayed focused enough.
On the one hand you see 'traditional' companies like THQ, Sony/Psygnosis, Popcap restructuring, but on the other hand most of the 'mobile' game developers are hiring.
HandyGames alone has fifteen open positions. The games industry is evolving it is the survival of the fittest.
Sustainable business was, is and always will be the key. To achieve that you need a talented development team, regular releases of great titles, business models the consumers want, an ability to go global, a big reach and most importantly innovative game ideas. The time for 'me too' products and copycats is over.
For the companies that stay agile and offer a great user experience, the mobile world is so bright! So is the party over? Hell no it just started!
Oscar Clark has been a pioneer in online, mobile, and console social games services since 1998. He is also author of the book, Games As A Service – How Free To Play Design Can Make Better Games.
All true, but I would suggest that most traditional publishers are struggling with these same odds as much - per title - as the developers. They also need to show value above just the money.
However, I guess we also have to remember that we have been in an era of companies buying customers who are now paying for that in their share price. perhaps now is the time where full marketing strategies rather than just ad buying will come goods.
Obviously, we also have cross-promotion tools we can use to allow Indies to pool their audiences too. We live in interesting times.
Alongside multiple industry roles, Volker is the co-founder Oystercrowd, Blue Beck, and Digital M. Former posts at BlackBerry and Scoreloop add to an enviable CV, which also includes the co-founding of Connect2Me
I think we are all focussing on the same point: the changing state of the industry.
The traditional value-add of packaged-good publishers is shrinking, and a new value-add is only evolving, I'd say.
Where previously there was no real alternative to a publisher if you wanted scale, there is now a plethora of avenues for people to choose from, and this is where a lot of the traditional folks fail.
We are seeing some newer publishers, such as Chillingo and Miniclip, evolving and making waves - and, no, let's not discuss here if they add value or not; let's just acknowledge that they regularly place titles high in the charts.
We are seeing indies that live comfortably on their own, we are seeing indies that try to leverage their install base to venture out into publishing, and we're seeing new-style community and discovery mechanisms.
Finally, we are also seeing new combos to boost discovery and monetisation such as Tapjoy, Super Rewards and the like. I have probably forgotten half or more and yet it is clear that this is a much more complex ecosystem than was previously in place.
It is indeed unsurprising that some are just not agile enough to adapt...
If you discount social interaction, the depth of most mobile games being produced at the moment is equivalent to games circa 1989-90.
The reason for this is that this need for agility is reflected in short development cycles, meaning games in most cases ultimately lacking in real depth.
If we really want mobile to really push on and replace console and PC gaming then it needs to accommodate games from new IP - that are not triple-A production quality - with a lot more focus on the single player experience as well.
These can take 18-24 months to make and are currently not a good fit in regard to the demands for agility.
In general, mobile is great for 'flash in the pan' games, novelty IPs that come and go like butterflies, but the real long term sustainable money is in multi-platform IPs with depth that can grow and grow up to 20 years. This is what all of the big guys are all scratching their heads about.
Yes, the mobile games business is very complex.
It's difficult for the big boys from the online amd console world to adapt. If they are not performing then, yes, they need a reorganisation, but hope it's in the right direction.
I don't see the business deteriorating. Well at least for the time being.
The market is growing and will continue to grow despite the reorganisations in the companies mentioned.
Winners, on the contrary, will be few and will take majority of the markets. Proportionate to the number of games being launched these days, you don't see a lot of new game companies enjoying a success story.
I think its dangerous to use Sony, OnLive and Popcap as bellwethers for the entire mobile industry.
Each of them has its own issues that resulted in downsizing, rather than being forced to downsize because of the mobile environment.
Sony is having issues with the Vita. Its in-house games are just not driving hardware sales, so I think its a sensible decision to slow down internal dev until a third party title pumps hardware numbers up. As it stands, any game they make will be a losing proposition.
OnLive is way ahead of it's time. The only way that OnLive could have prevented the mess it was in was to get acquired like Gaikai. I wish this weeks Maven's chat was more about the shenanigans it got up to with this 'acquisition'.
I've contracted for a company that did something similar, where the CEO forced bankruptcy on the company only to have one of his friends buy up all the assets so he didnt have to pay their bills.
Its really shameful what he tried to pull - Im sure he could have sold to Microsoft or someone else and took care of the employees and investors that helped him build the company. Im sure that EA would love to have something like this for Origin. He probably figures that he is his top priority and as long as the company survives and he is at the top all is well.
There must have been something going on at Popcap even before the acquisition. It makes incredible games, but it has been sitting on its laurels for a while now.
So I dont think that these companies foretell of doom and gloom in the mobile space unless you are a Vita Developer, banking on OnLive or have been acquired by EA.
After decades of large-team development efforts and ingrained structure, it's next to impossible for major publishers to change to small team sizes.
PopCap etc is just the beginning. Once a studio lands a hit, they put the very structure in place that will kill them:
Death by meeting.
Death by over-engineering.
Death by over producing.
Death by over QA'ing.
I can go on and on;
Death by politics.
Death by Pedigree Ballast.
Death by 'keep your job at all times'.
Death by overhiring.
Death by 'we need a corporate structure'.
My personal favourite: Death by disbelief. You can't build a hit with two guys? NO WAY!
