Mark Pincus, Founder of Zynga, Is Replaced as CEO Again(nytimes.com)
nytimes.com
Mark Pincus, Founder of Zynga, Is Replaced as CEO Again
http://www.nytimes.com/2016/03/02/technology/mark-pincus-will-again-leave-zynga-ceo-job.html?ref=technology&_r=0
5 comments
Zynga needs another hit. Perhaps they should sponsor a sort of games XEROX PARC within Zynga to attempt a more speculative and R&D-based approach. From my non-insider perspective, Zynga is not investing anything new in terms of intellectual or human capital. They are depleting their existing assets, just as they are wringing cash from their physical real estate. The company is currently being run like an old hotel that is no longer stylish, but can still produce some net cashflow as long as necessary repairs are neglected.
Only problem is that just like the other game "money-grab" cough king cough companies, all their successful games are just copies of other less know successful games. So the problem is they don't know how to make a game, just how to copy a game.
Or even worse, just copies/mods of their own other games
Yes, I think their philosophy is to take proven models and tweak the mechanics to be more enforcing of monetizing behaviors. After awhile, people get hip to this and start to get smarter than the simplistic casual game models. If I were an evil game pusher, I would try some more ambitious hardcore games -- as in, fully immersive, on the order of Star Citizen (but perhaps with more innovative models / lower production costs).
I think the problem is that the Zynga model requires it to also be playable on a very casual "while waiting in line at the grocery store" model to get you hooked in the first place. Hard to make an ambitious immersive game that also fulfills that.
The mindset is totally different. Some people are just not wired to play games that require a deeper investment in learning new things. Zynga figured out how to get some of these normal people to part with their hard-earned pennies for extra turns and doo-dads. But even there, the most profitable users are relatively hard-core compared to the average casual gamer. I bet if you took the top 5% of Zynga users, you could market a relatively more hardcore game to them and it would be insanely profitable.
I don't think this is the case - disclaimer, I worked at King - if you look at the top 5% of Zynga/King users with respect to revenue, you won't find hardcore gamers, but rather your usual casual gamer but with lots of money to spend. The 'hardcore' gamers won't pay to lessen the challenge. The problem with your idea of creating hardcore games is that it doesn't appeal to most mobile phone users, hence limiting the $$$ making opportunity. King IS now branching off from super casual, but only in a limited way.
There's paying to lessen the challenge, but you can also pay for more gameplay options. I'm amazed at the amounts people have spent on "spaceships" in Star Citizen, for example.
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.
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.
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.)
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.)
(Of course, casinos also have their whales, as do Zynga-style games.)
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.
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.
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.
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.
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.
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.
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.
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 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.
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.
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.
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.
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?
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.
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.
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.).
That's a well-intentioned idea, but it's probably just throwing good money after bad.
There are some old hotels (literally) out there that can still crank out cash and they're fine investments as long as you set your expectations appropriately.
I just the best talent will either start their own companies or join smaller companies where they can have more equity participation.
There are some old hotels (literally) out there that can still crank out cash and they're fine investments as long as you set your expectations appropriately.
I just the best talent will either start their own companies or join smaller companies where they can have more equity participation.
Well yes, from the perspective of talent why would you even want to go work for Zynga? But they could probably make it worth your while if you're not already financially independent or ethically opposed to their goals.
Yes. And it's very hard to copy your way into greatness, or gamify your way into greatness if the core product is weak. You can get one hit wonders, but people eventually resent the experience.
In a sense I see parallels with old AOL. They were still making money off the landline accounts sold to our parents, and did some copying here and there, but very little new greatness while they lived off the cash cow.
In a sense I see parallels with old AOL. They were still making money off the landline accounts sold to our parents, and did some copying here and there, but very little new greatness while they lived off the cash cow.
While this is a bit of a side point, I think the "AOL makes its money off people who haven't ever cancelled dial-up" meme is a little unfair to the company. They do make some money that way, and the ethics of doing that are (to be charitable) dubious, but after their separation from Time-Warner they executed a mostly successful pivot into advertising technology and content. You may not love the Huffington Post, TechCrunch or Engadget, and you've probably never even heard of "AOL Platforms," but when Verizon paid nearly four and a half billion dollars for AOL last year it wasn't about getting access to the coveted dial-up market.
A better comparison might, perhaps ironically, be Yahoo. Not that Yahoo was ever as hated as Zynga, but after their usefulness as "the front page of the Internet" faded -- before the first dotcom boom went bust! -- Yahoo never really figured out what the hell to do with themselves, beyond continually insisting that they were an important media company. Somehow.
A better comparison might, perhaps ironically, be Yahoo. Not that Yahoo was ever as hated as Zynga, but after their usefulness as "the front page of the Internet" faded -- before the first dotcom boom went bust! -- Yahoo never really figured out what the hell to do with themselves, beyond continually insisting that they were an important media company. Somehow.
Sure - I should have dated the AOL comments - Truer in 2010. And the parallel is still there. They did a successful pivot before selling again, but never re-achieved greatness.
I am a game maker by heart, and got in and out of the game industry multiple times, and I keep in touch with some people (ranging from the nobodies that do important work, like Dice and Maxis engineers, to sometimes having a facebook chat with a celebrity, like John Romero)
One thing that is common, is that everyone that knows how the game industry work, always keep pointing to Zynga that they are doing it wrong, but they don't change their ways, and keep doing it.
Yes, game industry IS hit driven, and this does lead to some problems (example: Maxis was VC funded, investors were expecting their growth to be stable, not a roller coaster, after the massive hit that was SimCity 2000, they had no time to outsell SimCity 2000 the following year to keep a growth pattern, VC didn't understood that and the end result was them being sold to EA). But even then, on long term is obvious that a company experience and solidity is more important, for example Bethesda, that uses the terrible and buggy engine Gamebryo, although I am one of the voices that keep asking them to change, I suspect the reason why they can crank games with similar quality every time, is BECAUSE they never changed their tools, and make all games similar to each other. Another RPG example is Obsidian, that for each game used wildly different tech, yet all their games are known to have a certain baseline quality that came with experience. Or for a mobile game company, Toca Boca, all their games have a distinct style of theirs, and they have a clear process on how games are created.
Zynga got one part right, that is to "fix" the hit driven problem by having some stability with their "average" releases, the part they got wrong is that they do that by just copying everyone else games, and copies rarely do great, specially in time consuming games.
When WoW appeared, and MMORPG making became a mania like tulip-mania, with investors throwing money at MMORPG companies with little thinking, I warned lots of people that making a WoW copy would never work, WoW is a time consuming game, if you make a clone, why the person would play the clone? a WoW fan will keep playing WoW, and someone that don't like WoW, won't play the clone.
Every single company I knew, that attempted to make a MMORPG after seeing WoW success (instead of making the game a MMORPG because it made sense) was a failure, I know investors that lost millions with this, and I know people that accepted a proposal I vehemently reject that got problems too. (one company approached me, and asked me to drop out of college to join their MMORPG team, the company owners visited Blizzard headquarters, were mesmerized, and wanted to copy it, but doing a christian MMORPG, I flat out refused, the company somehow went bankrupt only 3 months later).
Zynga needs to start doing serious game R&D (instead of making lots of clones), and also find their own style of games to create consistently, and find their average revenue to size the company according to it...
If you have a hit, just store the cash, many, many game companies of all sizes learned the hard way that growing after a hit can result in you having to be forcefully shrink again to pre-hit levels, usually in a painful manner that might make you lose lots of money.
One thing that is common, is that everyone that knows how the game industry work, always keep pointing to Zynga that they are doing it wrong, but they don't change their ways, and keep doing it.
Yes, game industry IS hit driven, and this does lead to some problems (example: Maxis was VC funded, investors were expecting their growth to be stable, not a roller coaster, after the massive hit that was SimCity 2000, they had no time to outsell SimCity 2000 the following year to keep a growth pattern, VC didn't understood that and the end result was them being sold to EA). But even then, on long term is obvious that a company experience and solidity is more important, for example Bethesda, that uses the terrible and buggy engine Gamebryo, although I am one of the voices that keep asking them to change, I suspect the reason why they can crank games with similar quality every time, is BECAUSE they never changed their tools, and make all games similar to each other. Another RPG example is Obsidian, that for each game used wildly different tech, yet all their games are known to have a certain baseline quality that came with experience. Or for a mobile game company, Toca Boca, all their games have a distinct style of theirs, and they have a clear process on how games are created.
Zynga got one part right, that is to "fix" the hit driven problem by having some stability with their "average" releases, the part they got wrong is that they do that by just copying everyone else games, and copies rarely do great, specially in time consuming games.
When WoW appeared, and MMORPG making became a mania like tulip-mania, with investors throwing money at MMORPG companies with little thinking, I warned lots of people that making a WoW copy would never work, WoW is a time consuming game, if you make a clone, why the person would play the clone? a WoW fan will keep playing WoW, and someone that don't like WoW, won't play the clone.
Every single company I knew, that attempted to make a MMORPG after seeing WoW success (instead of making the game a MMORPG because it made sense) was a failure, I know investors that lost millions with this, and I know people that accepted a proposal I vehemently reject that got problems too. (one company approached me, and asked me to drop out of college to join their MMORPG team, the company owners visited Blizzard headquarters, were mesmerized, and wanted to copy it, but doing a christian MMORPG, I flat out refused, the company somehow went bankrupt only 3 months later).
Zynga needs to start doing serious game R&D (instead of making lots of clones), and also find their own style of games to create consistently, and find their average revenue to size the company according to it...
If you have a hit, just store the cash, many, many game companies of all sizes learned the hard way that growing after a hit can result in you having to be forcefully shrink again to pre-hit levels, usually in a painful manner that might make you lose lots of money.
Zynga has 900 million cash in the bank and just sold their headquaters. If they are not total idiots they should be able to keep the lights on and paying developers for a while. That's why I think their stock is a deal @2$/share.
Maybe I'm misunderstanding what you're saying, but if you say their future involves burning through their cash-on-hand just to keep the lights on, why is the stock worth anything to you?
My point is that I think it's a good bet that they make at least one more game that people like at some point in the future. If they spent 50 million dollars a year running their business they will be around for another 20 years, and in that time span the chances are good they will make another decent game. Then when their stock jumps I will sell it for a healthy cash out.
Another scenario is that they get acquired by a different company. In this scenario it is also likely their share price would jump and I would cash out as well.
Another scenario is that they get acquired by a different company. In this scenario it is also likely their share price would jump and I would cash out as well.
Good analysis!
According to their most recent statement of cash flows (year ended Dec 31, 2015), they lost about $45m on operations last year. Since they're selling their building (and if there are no layoffs), I suspect that to increase to around $55m. That gives them a ton of runway...
My only concern is that their current $2.25 stock price gives them a market cap of a little less than $2.1b. That is quite interesting because their 2015 balance sheet shows total assets of just a little over $2.1b. The dubious number on their balance sheet is ~ $658m of goodwill, but I think that risk is possibly offset by only valuing their property, plant and equipment at ~ $273m.
Zynga may not have another hit left in them, but if they do, a $2.25 stock price leaves plenty of room for profit. It's definitely not a place to park your retirement money, but there are certainly worse stocks out there!
According to their most recent statement of cash flows (year ended Dec 31, 2015), they lost about $45m on operations last year. Since they're selling their building (and if there are no layoffs), I suspect that to increase to around $55m. That gives them a ton of runway...
My only concern is that their current $2.25 stock price gives them a market cap of a little less than $2.1b. That is quite interesting because their 2015 balance sheet shows total assets of just a little over $2.1b. The dubious number on their balance sheet is ~ $658m of goodwill, but I think that risk is possibly offset by only valuing their property, plant and equipment at ~ $273m.
Zynga may not have another hit left in them, but if they do, a $2.25 stock price leaves plenty of room for profit. It's definitely not a place to park your retirement money, but there are certainly worse stocks out there!
According to wikipedia they have ~2,000 employees, that's like ~$200M just for payroll, overall costs are probably around ~$3-400M. (I didn't look up other numbers, I just gut estimated.)
Interesting point Marco, and also begs the question of why the hell you need 2,000 employees to run a game company. Hopefully somebody gets put in charge who will thin the herd.
It's fascinating to see on HN (where people should know better) how many companies people go "how can they possibly need that many people" and even better "i know what will make them successful -- laying off a bunch of people!"
So are you going to address the question of why Zynga needs to employ 2000 people to run a game company or not? I am actually asking and would be grateful if you could enlighten me.
In Zynga's case, their market cap is actually less than the value they attach to their assets. This is particularly interesting because of these two numbers from their 2015 balance sheet:
- Goodwill - 657,671,000
- Property, plant and equipment - 273,221,000
The 273 million in PP&E is interesting because that is essentially the purchase price on their headquarters building (or $340 per square foot). Office space in San Francisco is going for around $800 per square foot now.
Since investors know about that potential large gain, they are effectively saying two things:
1.) They do not trust that Zynga will ever deliver profits.
2.) They value goodwill at zero.
In a case like this, honestly, laying off people is one of the more palatable tools in their box. A round of layoffs would:
a.) Drop their annual operating loss (they lost about $45m in 2015 and if their headcount stays the same and they lease space in the building they currently own, they can expect that loss to rise in 2016.)
b.) Cut the amount of space that they need to lease.
c.) Streamline the company.
Of course, it could also:
a.) Kill morale.
b.) Encourage everyone left to dust off their resumes and stream for the exits while the job market in San Francisco stays strong.
Either way, Zynga is in a tough spot. Investors have ultimately valued the company at assets + zero and show little faith that the company will ever be profitable again. Layoffs are a tough thing and they often backfire, but strategically, they aren't unthinkable.
- Goodwill - 657,671,000
- Property, plant and equipment - 273,221,000
The 273 million in PP&E is interesting because that is essentially the purchase price on their headquarters building (or $340 per square foot). Office space in San Francisco is going for around $800 per square foot now.
Since investors know about that potential large gain, they are effectively saying two things:
1.) They do not trust that Zynga will ever deliver profits.
2.) They value goodwill at zero.
In a case like this, honestly, laying off people is one of the more palatable tools in their box. A round of layoffs would:
a.) Drop their annual operating loss (they lost about $45m in 2015 and if their headcount stays the same and they lease space in the building they currently own, they can expect that loss to rise in 2016.)
b.) Cut the amount of space that they need to lease.
c.) Streamline the company.
Of course, it could also:
a.) Kill morale.
b.) Encourage everyone left to dust off their resumes and stream for the exits while the job market in San Francisco stays strong.
Either way, Zynga is in a tough spot. Investors have ultimately valued the company at assets + zero and show little faith that the company will ever be profitable again. Layoffs are a tough thing and they often backfire, but strategically, they aren't unthinkable.
I'm assuming he means that they have enough money to keep going until they come up with the next cash cow at which point the stock will skyrocket again like a yoyo.
Wether or not that's a good bet is debatable considering their track record to date.
Wether or not that's a good bet is debatable considering their track record to date.
The same reason a YCombinator company is worth anything. Nonzero probability of them doing something really valuable while the lights are on.
From how Zynga HQ looks, that HQ would cost them a really lot of costs.
In my opinion, the problem with Zynga was the social games bubble, years ago I used to read on tech news websites that Zynga is really big to the point that Facebook own 25% of its revenue to Zynga, Facebook was just started monetizing their business. Sometimes you shouldn't "look big" as much as others expect you to be.
In my opinion, the problem with Zynga was the social games bubble, years ago I used to read on tech news websites that Zynga is really big to the point that Facebook own 25% of its revenue to Zynga, Facebook was just started monetizing their business. Sometimes you shouldn't "look big" as much as others expect you to be.
I think we all know there will be another gold rush for "social" game companies once VR takes off. So, IMHO, Zynga just needs to slug it out till FB gets VR pushed to the masses.
"I think we all know" VR is a niche gimmick until proven otherwise. Outside the bubble of enthusiasts nobody is convinced people will attach a black box to their eyeballs to game.
From both watching and experiencing demos, it has proven me otherwise. But you're right, it's not even in the market yet so time will tell if the public will be down for it, especially with that stupid cover on Time magazine (http://4d663a369f9f03c3c61e-870e77779efd63f7bd6c2ee08d8cfae6...). I'm excited though.
Yeah it's almost as dumb as dancing around, waving a plastic stick. Oh wait.
I mean... it is kind of dumb, which is why the Wii never had any longevity and Nintendo has almost entirely abandoned motion gaming and is currently in the shits business-wise. Not to mention while Nintendo sold a lot of Wiis for a little while, attach rates were horrendous (i.e., people didn't find the experience worthwhile enough to buy more games).
I think most people are in agreement that, simply from the fact that VR doesn't currently exist on the market, and the novelty factor, we're going to see a spike in VR sales and development.
The real question is whether or not this will last, and whether it has the potential to become a substantial part of the mainstream in the medium-long term.
My bet is on VR becoming more refined and better, with enough business to support a few small-ish headset manufacturers, but it will not come anywhere near, say, the scale of the Xbox/Playstation/PC install base. The big challenge is getting devs to support it - VRizing properly is not a small feat, and developers have proven very reluctant to support niche hardware (see: Kinect).
I think most people are in agreement that, simply from the fact that VR doesn't currently exist on the market, and the novelty factor, we're going to see a spike in VR sales and development.
The real question is whether or not this will last, and whether it has the potential to become a substantial part of the mainstream in the medium-long term.
My bet is on VR becoming more refined and better, with enough business to support a few small-ish headset manufacturers, but it will not come anywhere near, say, the scale of the Xbox/Playstation/PC install base. The big challenge is getting devs to support it - VRizing properly is not a small feat, and developers have proven very reluctant to support niche hardware (see: Kinect).
Wii was also a fraction of the price for a console that multiple people can play including controllers compared to a single VR headset that doesn't include the high end computer and technical know-how to set it all up.
I wouldn't underestimate the impact of "social" gaming on wii's success, it was seen as accessible, casual, gaming at an affordable price. One of the unfortunate aspects of current gen consoles is that the games don't support single-console multiplayer for the most part. I have to leave an go home if I want to play destiny with my friends.
With VR you can't really share the experience so it sort of loses the word of mouth type virality that came along with Wii where you might go to someone's house and play together. Instead it's a solo experience. Even if multiple people have headsets (even more money) you still aren't sharing in the experience in any way.
The smartphone headsets are somewhat better, but still just kind of a neat trick. I don't deny that VR is plenty cool but the barriers for widespread adoption are just too high in every direction I look.
I wouldn't underestimate the impact of "social" gaming on wii's success, it was seen as accessible, casual, gaming at an affordable price. One of the unfortunate aspects of current gen consoles is that the games don't support single-console multiplayer for the most part. I have to leave an go home if I want to play destiny with my friends.
With VR you can't really share the experience so it sort of loses the word of mouth type virality that came along with Wii where you might go to someone's house and play together. Instead it's a solo experience. Even if multiple people have headsets (even more money) you still aren't sharing in the experience in any way.
The smartphone headsets are somewhat better, but still just kind of a neat trick. I don't deny that VR is plenty cool but the barriers for widespread adoption are just too high in every direction I look.
I'm a fan of couch-gaming too, but the market has pretty much spoken clearly on that.
The Wii was in hindsight in the same space as Guitar Hero and Rock Band - really cool social experiences that ultimately had no sticking power. Both were a flash in the pan (to the tune of a couple years rather than a couple months, but still very temporary), and both are deader than a brick right now despite attempts to resurrect it.
But in any case, agree - VR is just too limited, too niche, and too expensive. Costs will surely come down, but by enough to get a huge install base?
The Wii was dirt cheap compared to consoles of its generation, and even it couldn't sustain sales despite having a novel but niche experience. At $600-800 VR has absolutely no mainstream future, at $300? Maybe not even then.
The PSVR is IMO the most realistic shot right now at mainstream VR - it promises to be cheaper than Oculus and Vive, and has a dependency on a medium-priced console as opposed to a high-end gaming PC. Even then, the all-in cost of PSVR is likely still going to nearing $1k.
The Wii was in hindsight in the same space as Guitar Hero and Rock Band - really cool social experiences that ultimately had no sticking power. Both were a flash in the pan (to the tune of a couple years rather than a couple months, but still very temporary), and both are deader than a brick right now despite attempts to resurrect it.
But in any case, agree - VR is just too limited, too niche, and too expensive. Costs will surely come down, but by enough to get a huge install base?
The Wii was dirt cheap compared to consoles of its generation, and even it couldn't sustain sales despite having a novel but niche experience. At $600-800 VR has absolutely no mainstream future, at $300? Maybe not even then.
The PSVR is IMO the most realistic shot right now at mainstream VR - it promises to be cheaper than Oculus and Vive, and has a dependency on a medium-priced console as opposed to a high-end gaming PC. Even then, the all-in cost of PSVR is likely still going to nearing $1k.
I think it's wrong to think of VR as another gaming system. It's more like a new type of computer, in that it's multi-purpose. It will be used for business meetings, design, art, sex, games and a whole lot more. So it's not $1000 for a gaming system, it's $1000 for a useful tool.
The points you're making about shared experiences are somewhat valid in terms of, I'm not going to keep 4 headsets around so my friends can come over and play. But I feel like I experienced that problem with Xbox anyway, friends who only have 1 or 2 controllers.
And once you do have multiple headsets, it's absolutely a meaningful shared experience. There are games where you can hear the other person talk, see their avatar's mouth move as they do, move around and play games with them in a made-up environment. It is so awesome.
The points you're making about shared experiences are somewhat valid in terms of, I'm not going to keep 4 headsets around so my friends can come over and play. But I feel like I experienced that problem with Xbox anyway, friends who only have 1 or 2 controllers.
And once you do have multiple headsets, it's absolutely a meaningful shared experience. There are games where you can hear the other person talk, see their avatar's mouth move as they do, move around and play games with them in a made-up environment. It is so awesome.
I think this is a really valid point. Does anyone know if Zynga has dedicated any resources to being ready to jump in on the VR scene once it hits?
Is there any evidence that they can get another major hit? More broadly - who are the companies that have had multiple gaming hits, and what does (or doesn't) Zynga have in common with them?
They were able to have medium mobile successes with releases of Slots games and Farmville 2 Country Escape. The mobile games business is getting more mature and only a couple companies are really well positioned to execute and have actually proven they can make followup multiple big hits: Machine Zone, King, and Supercell. Zynga is not at their level and perhaps fighting to be in the next tier of mobile gaming companies (5-20), which isn't necessarily a big criticism that their not a top dog. But given their resources they should be able to compete better. The problem is their upper level management and C level execs, which have combined to produce a terrible company culture along with making poor strategic decisions. Their game development is driven mainly by MBA type Management consultants and East Coast ivy league graduates. Only on the shiny surface are they are Silicon Valley tech company- more of a stepping stone for opportunistic business types to get into tech. They have a great analytics infrastructure, but then they are not smart with how they use the data- and it's rather just used as a tool for Managers and execs to push their own agendas and to claim credit for various projects. Their are whole departments that are essentially useless and have no clue. Across the board- terrible management. If they empowered the people on the ground their who know what their doing, then they'd have a much better chance of success.
If they empowered the people on the ground their who know what their doing, then they'd have a much better chance of success.
It's very hard for companies to regain this once it's been lost. This is why I think it may be hard for them to regain their greatness.
It's very hard for companies to regain this once it's been lost. This is why I think it may be hard for them to regain their greatness.