To say Zynga is in transition is an understatement, laying off 18%. As part of the layoffs they seem to be betting on smaller teams.
Zynga is also trying to follow the lead of mobile gaming companies like Supercell and King.com. Apparently executives were impressed to see massive hits created by small teams and small workforces. The hope is that by restructuring the company, Zynga can replicate the success of some of its startup competitors.
“Impressed”? Really? Small teams delivering big results is how business is done in Silicon Valley. Frankly I’m shocked when I still see big bets, but then again I’ve seen more in my limited time in gaming than I did in over 10 years building web services. You also see a lot of Waterfall in the gaming industry which is even more shocking at this day in age. Coming from Agile, Lean Software Development, the Lean Startup, and Customer Development I’m shocked at how easily game companies slip into old habits of making big bets. This isn’t the console days anymore. Then again, consoles started with smaller bets and ballooned into big ones. Why? From what I can tell it stems from two intertwined things – the search for safe bets and lack of skepticism. Both are fatal for the same reason, they take your eye off the ball. That ball is getting in touch with your users, getting feedback, confirming your hypothesis. Big bets are more about execution.
The search for safe bets
Games are a hits driven business so it’s understandable game developers are constantly in search of some stability. They typically try to find that stability in three ways:
- Cloning other successful games or game mechanics
- Push for quality
- Out market the competition
Cloning other games or game mechanics
Cloning isn’t that different than any other industry, however it gets a bad name in the games industry. Yahoo! mail was a copy of HotMail, Gmail a copy of Yahoo! Mail. They all add their own twists but they’re essentially the same thing. Of course Yahoo! Mail took almost a decade to surpass HotMail in users. Most clones offer diminishing returns as Zynga is seeing recently.
This strategy of buying or borrowing on others’ success basically amounts to staying one step behind the competition. It also ignores the process of earning—and understanding—your customers.
Diminishing returns can be combated however through innovation as Gmail did by offering almost unlimited storage at a time when Yahoo! was charging a premium for additional storage. All too often in the game industry though the innovation they’re shooting for is quality. Raise the quality bar they say.
The inevitable push for better quality
I’ve only been in the gaming industry a few years and have already heard the words, “raise the quality bar” more than I care to remember. It seems to be the easy win. There is some merit here, users tend to pick the game with more polish if given two equal games. But that is given two equal games, what if they are completely different? And for that matter what is polish? Better game mechanics or better art? Better animations? What the push for quality does it takes they eye off the ball. You’re no longer trying to get in touch with your users or get in there head, you’re trying to execute. The game had only 16 colors before, wait till the get a load of it with millions.
Out spending the competition on marketing
If you’re big, this is your basic game plan. Whether you license IP or just buy more ads you are basically saying you won’t win by building a better game. And if you’re drive isn’t to build a better game there is less of a need to keep in touch with your users.
Silicon Valley has already been through this
As I outlined above, all these strategies take you away from your customer. Your focus isn’t to test new mechanics or art but to execute. All this reminds me of Steve Blank’s critique of startups from 20 years ago. Those startups were all about big investment because they involved hardware. You had to know you would win or no one would give you that much money. And since you already knew what users wanted, cause you convinced a VC to invest, all you really needed to do was execute on that vision. You can get feedback from users when you were done building. I can’t tell you how much this sounds like the games industry.
What the games industry needs is a healthy dose of skepticism
Writing made Mark Twain rich but he lost it all on bad investments. One of the commentators in the Mark Twain documentary from PBS had an interesting explanation of why.
I’m sure there were writers that were great businessmen but I never met any. There is an excess of imagination in writers, they can foresee this thing being a massive success all over the world when it has fatal flaws it will never work and the careful businessmen of course would well look at it and say, Well it ain’t going to work.
You have to be skeptical in business. You have to always be reaching for confirmation through data, feedback, listening to your users. Games are built by artists who have complete confidence in their vision. Games are also run by business people looking for some stability in the hits driven business. This leads to them taking their eye off the ball and not listening to their users. Startups and much of the Silicon Valley has learned how ignoring your users can lead to a quick demise. I hope entertainment companies can learn this as well and be a little more skeptical and adapt some of the entrepreneurial techniques developed in Silicon Valley – Customer Development, Lean Startup, etc.