OMGPOP Team Tried To Buy Back Its Site, But Zynga Killed It Instead(techcrunch.com)
techcrunch.com
OMGPOP Team Tried To Buy Back Its Site, But Zynga Killed It Instead
http://techcrunch.com/2013/08/05/omgameoverpop/
53 comments
Should mention I mostly write PHP, but my Scala should be up to scratch for this too. Or C#, perhaps even Java (shudder). I've got some free time so if someone wanted to create the base in Ruby I'd be happy to assist.
I still think it was a mistake to buy OMGPOP. Draw Something was one of those games that you get addicted to, but it only lasts a week or two. Eventually it becomes saturated in that game market, and unfortunately for Zynga they bought it when it was in the middle of this process.
The question I have is, if OMGPOP had been left to their own devices, is it likely that they would have been able to churn out more short-term hits?
It seems plausible to me that they would have been, which implies to me that companies that are like OMGPOP are worth more independent than if they are acquihired. The process of acquihiring such companies could very well be self-defeating.
If you try to buy "it", you don't actually get "it".
It seems plausible to me that they would have been, which implies to me that companies that are like OMGPOP are worth more independent than if they are acquihired. The process of acquihiring such companies could very well be self-defeating.
If you try to buy "it", you don't actually get "it".
I'm not sure why you think that. I had known of OMGPOP for a few years prior to Draw Something because some friends and I played their tetris game. To have one hit like Draw Something in those couple of years doesn't suggest to me they would've had much further success.
But once you have Draw Something and hundreds of millions of users, it's easier to launch the next hit.
Having that leverage is a big advantage in the iOS marketplace where discovery is a major challenge for newcomers.
Having that leverage is a big advantage in the iOS marketplace where discovery is a major challenge for newcomers.
almost all game companies are contrary to this
Are you talking about iOS game companies or other game companies? I'm talking about iOS game companies.
Also, I didn't say it was a guarantee, but it is far far easier. Also, remember the scale of Draw Something. Over 100 million downloads in the first year.
Also, I didn't say it was a guarantee, but it is far far easier. Also, remember the scale of Draw Something. Over 100 million downloads in the first year.
What are examples of iOS gaming companies with multiple hits?
The question I have is, if OMGPOP had been left to their own devices, is it likely that they would have been able to churn out more short-term hits?
We'll never know, since Zynga effectively kneecapped them.
We'll never know, since Zynga effectively kneecapped them.
How can you reliably turn out hits? If you could, the one-hit wonder wouldn't exist. We'd only have hit machines.
With talent. Although there's never a guarantee.
For a studio like OMGPOP though it's important to note the downsides of cashing out big on the strength of one huge hit. It was great for the founders because they got their payday, but from a business perspective everyone else got ripped off. Had they not been acquired OMGPOP would not have been beholden to try to win back their purchase price in game sales, they would have only had to maintain healthy profitability. Which I think was well within their means considering the low cost of development of their games.
For a studio like OMGPOP though it's important to note the downsides of cashing out big on the strength of one huge hit. It was great for the founders because they got their payday, but from a business perspective everyone else got ripped off. Had they not been acquired OMGPOP would not have been beholden to try to win back their purchase price in game sales, they would have only had to maintain healthy profitability. Which I think was well within their means considering the low cost of development of their games.
I don't think there is a procedure that you can follow, but I think that if you assemble the right team and strike gold once, you can keep the gravy train rolling.
I'm using music as my model here. Some bands never make it (those guys who played your highschool house party in exchange for beer), some bands get lucky once but just didn't have the right team to keep it rolling (one hit wonders), and other bands get lucky once and do have the team to keep that sort of momentum going (I'd say The Beatles fits in here. Nobody really cares about their first hits, but they were a band for a while before 'getting discovered'.)
(In extraordinarily rare cases you have bands that arguably didn't strike gold through luck alone, but they are probably rare enough to right off.)
So OMGPOP got lucky and hit gold once. Maybe they had the right team to keep that rolling, maybe they didn't. Acquihiring surely puts a breaks on the possibility of having the right team to keep it rolling though.
I don't think "being acquired" (getting signed) kills a band quite like it kills a dev team though.
...maybe the trick is to acquihire dev-teams like labels sign bands.
I'm using music as my model here. Some bands never make it (those guys who played your highschool house party in exchange for beer), some bands get lucky once but just didn't have the right team to keep it rolling (one hit wonders), and other bands get lucky once and do have the team to keep that sort of momentum going (I'd say The Beatles fits in here. Nobody really cares about their first hits, but they were a band for a while before 'getting discovered'.)
(In extraordinarily rare cases you have bands that arguably didn't strike gold through luck alone, but they are probably rare enough to right off.)
So OMGPOP got lucky and hit gold once. Maybe they had the right team to keep that rolling, maybe they didn't. Acquihiring surely puts a breaks on the possibility of having the right team to keep it rolling though.
I don't think "being acquired" (getting signed) kills a band quite like it kills a dev team though.
...maybe the trick is to acquihire dev-teams like labels sign bands.
I was working with the OMGPop office whilst they were releasing Draw Something.. Half the people who actually worked on Draw Something announced they were leaving shortly before the Zynga takeover was announced, so I suspect they were missing some key people
The very existence of the term 'hit machine' implies that some people are able to do so reliably. This is certainly true in music.
You think? VC funds, record labels, games studios are all hits-run businesses. Of course some of them make profits, but none can guarantee hits.
The pop singer faced numerous disagreements with the song's co-producer. Quincy Jones did not want "Billie Jean" to appear on Thriller; he felt that the song was too weak to be part of the collection. The producer disliked the demo and did not care for the song's bassline. Jones wanted to cut Jackson's 29 second introduction, which was the longest one ever created at the time. The entertainer, however, insisted that it be kept. "I said, 'Michael we've got to cut that intro'", Jones later recalled. "He said, 'But that's the jelly!' [...] 'That's what makes me want to dance'. And when Michael Jackson tells you, 'That's what makes me want to dance', well, the rest of us just have to shut up."
Stock Aitken Waterman turned out over 100 top 40 hits in less than a decade. Now I'm sure they no doubt had their fair share of misses in that period, but with a track record like that I still think it's fair to call them a "hits-machine".
I think we need to define "reliably". Does it mean "enough to make a profit" (which would depend on the ratio of profits/losses on hits vs misses) or "guaranteed" i.e. every item is a success.
And anyway Stock Aitken and Waterman were actually a Hits Factory :-) http://en.wikipedia.org/wiki/The_Hit_Factory:_Pete_Waterman%...
And anyway Stock Aitken and Waterman were actually a Hits Factory :-) http://en.wikipedia.org/wiki/The_Hit_Factory:_Pete_Waterman%...
nerdook was able to churn out very popular, very similar Flash games for ages.
He did this primarily by a form of marketing, possibly unintentional, in which he was constantly accessible to and friendly with his fans.
E: Removed a dumb statement.
He did this primarily by a form of marketing, possibly unintentional, in which he was constantly accessible to and friendly with his fans.
E: Removed a dumb statement.
"The pop game design firm that gets acquihired is not the pop game design firm."
Probably, or raised a large sum of money to then have the runway, because they in part proved they understood something and created value or something people would use.
I don't think you'll find many people here who disagree with you there. Since these apps by default are stand alone, so they can't leverage large user bases as well as web apps. And people don't really feel loyalty to companies and their games, they just like to play what's fun.
> I still think it was a mistake to buy OMGPOP.
tell that to the people that got in on that secondary offering ;)
http://www.bloomberg.com/news/2012-03-23/zynga-ceo-pincus-to...
tell that to the people that got in on that secondary offering ;)
http://www.bloomberg.com/news/2012-03-23/zynga-ceo-pincus-to...
True, but maybe they bought it for the userbase, as much as for the games? I'm just speculating but if you have someone spending money on a game or gaming online, is it easier to cross-sell them?
I never understand the logic behind acquire-and-shutdown process. Like Google's last decade of shopping and killing spree, not long ago Yahoo bought Astrid and shutdown million users. Are there any significant business reasoning I am missing?
When a company acquires another and then shuts it down, the reasoning usually has something to do with intellectual properties or acqui-hiring the employees.
Except in this case, they laid everyone off. Also, Zynga doesn't seem all that interested in acquiring IP. I imagine this was just a fuck up on their part.
They're keeping Draw Something
If they are, that really seems like a nasty move. Buy a company, then shut down all their products and services, fire all of them, then keep all of their IP and ensure they can't use it again? I suppose it's not exactly theft, since they got paid something up front, but it's still unfortunate.
They didn't expect Draw Something to drop off so much faster than their usual games.
Probably didn't understand that Draw Something isn't even a game when you think about it, so didn't really have a competitive angle and became tiresome quickly.
Probably didn't understand that Draw Something isn't even a game when you think about it, so didn't really have a competitive angle and became tiresome quickly.
Or buying the customer base, if they think the customers can be moved to their platform.
The current Zynga team has another higher priority (revitalize its business in some way.) and rather than spending time to negotiate the buy-back deal, I guess they just chose to shut the service down for time and resource saving. It's a typical nature for a large company who always optimizes their operation for priority.. If you really love your product, the best and only way is not to sell.
To remove another competitor from the market
That would be considered illegal by US trade laws if it could be proven or was sufficiently argumented. Unfortuantely I don't believe the courts would accept a plea case after the aquisition had gone through. The big mobile carriers get into this sort of fight a lot though.
> That would be considered illegal by US trade laws if it could be proven or was sufficiently argumented.
But there are many other explanations which (while not as likely in the opinions of many observers) would at very least create a large slice of "reasonable doubt" (and occasionally actually be true!).
But there are many other explanations which (while not as likely in the opinions of many observers) would at very least create a large slice of "reasonable doubt" (and occasionally actually be true!).
That's a fair point, I think most courts would consider it an acceptable buyout within reasonable doubt, largely because of the rest of the huge competition in this market and the previous owners accepting the deal.
Yeah, it'd be illegal unless you were to truly value these innovators as potential contributors and then just not give a shit until this potentially powerful and creative company (that agreed to the sale of course) is a distant memory.
I've heard they're losing their best talent left, right, and center. Between that and stuff like this, I wonder how much longer Zynga can keep going at this rate?
Zynga should have sold it back for 300M-400M.
Or at least something. If I were a shareholder, I'd be irate. Maybe Zynga has some grand master plan for Draw Something and whatnot. But as of now, this looks like executives taking a massive, unnecessary loss in order to cover their own incompetence.
Or it could just be you don't want to introduce more competition with already a solid brand and revenue, unless they are willing to pay.
This is a good point, and the most positive interpretation of Zynga's actions.
But I doubt one more competitor in the gaming industry would have a substantial impact on Zynga's long-term health. There are so many competitors already, many of whom create smash-out hits. Zynga does not anymore. OMGPOP's existence or non-existence won't change that.
But I doubt one more competitor in the gaming industry would have a substantial impact on Zynga's long-term health. There are so many competitors already, many of whom create smash-out hits. Zynga does not anymore. OMGPOP's existence or non-existence won't change that.
agree completely but my point is two fold. first unless they were willing to pay the asking price, why would you do it. second you're better off having your opponents start as far back as possible unless they again make it worthwhile
"These team members wanted whatever Zynga was willing to sell, even if that didn’t include the more valuable Draw Something assets or user data. Even more employees offered to work on OMGPOP.com for free. However, Zynga said this would all take too much legal work and wouldn’t agree to sell anything."
This is a huge red flag. To me that says there's something that would emerge during the due diligence process that Zynga does not want people to know about. If I was a gambler I'd short them hard in response to this, my hunch is that the firm is on its way to de-listing and collapse.
Do you think that it would be related to the reasons for shutting down OMGPOP operations? That is, they found some nasty skeletons in the closet, and the best way to hide them is to wind down everything OMGPOP-related so that they don't have to file reports about it and it doesn't ever get audited?
I couldn't say, and my comment above is honestly baseless speculation, just a very strong hunch. I haven't read any of their public filings on that acquisition so weight that appropriately.
> I was a gambler I'd short them hard in response to this
And you'd be pretty late to the party:) The short interest ratio on them is already .8. Thought its less than it was a couple of months ago.
And you'd be pretty late to the party:) The short interest ratio on them is already .8. Thought its less than it was a couple of months ago.
Not if their strategy was to obliterate a potential competitor from the market.
If that was the idea, their execution was flawless.
If that was the idea, their execution was flawless.
I wanted to launch a Shartcasting site, but OMGPOOP.com was taken.
I don't want Zynga to sue my ass, but it's almost worth it. Would anyone else be interested in collaborating? Obviously I can't emulate all the games myself.