Brent Dance from Google talks about the importance of having a keen eye for yielding the right leverage for game developers.
In the gaming world, success is often defined in billions of dollars of revenue or tens of millions of downloads. The reality is that most games on the market never come close to that level. They’re not Call of Duty or Candy Crush. Yet, even the smallest studios can enjoy long-term success if they take the right approach to scaling their business. Of course, on the whole, game developers are pioneering some of the most innovative strategies and technology we’ve seen in years, and they’re at the forefront of one of the fastest-growing industries. But if your idea of success is just being popular in a large gaming market, you’re not considering the full nuanced picture.
My team and I spend a lot of time thinking about how every game developer — whether they have 50,000 downloads or 50,000,000 — can find ways to succeed in this highly competitive market. When I talk to different companies, the question I get asked most is, “How do we compare to other game developers? Are we doing well?”
Here’s the thing:
LONG TERM SUCCESS IS ABOUT UNDERSTANDING WHERE YOU ARE RIGHT NOW, AND TAKING MEASURED STEPS TO BUILD ON THAT.
While it’s of course important to pay attention to what your competitors are doing, sometimes growing game developers can get so caught up in beating their rivals that they leave things on the table that could help them build a more sustainable business. In other words, don’t let your competitive spirit get in the way of your own best interests. Sure, I understand the impulse to shoot for the stars and imagine success as releasing a AAA title or being a top-grossing app in the Google Play store. But that’s over-simplifying it. What will make you successful in your own arena depends on how you pair your titles with market demand, and the way you assemble and operate your company.
The road to measured growth starts with asking the right questions, even if getting to the answers is hard. Here are a few to consider:
“How are your games resonating with your audience?”
ARE YOU SEEING GOOD ENGAGEMENT WITHIN THE FIRST FEW MINUTES OF GAME PLAY? IS RETENTION STRONG? THESE ARE ALL GOOD SIGNALS AS TO WHETHER YOU’RE GAINING TRACTION IN THE MARKET.
On the other hand, if you’re having trouble getting people to stay in the game, things will only get harder down the line. If you don’t have a solid base of players that represent a game’s value (for example, reaching the desired level of in-app purchases), and ideal playing frequency, then you shouldn’t focus on growth until you find a better fit. Which is why it’s completely counterproductive to believe that a successful game is simply some brilliant idea with off the charts retention. What you’re looking for initially is not so much a great idea for a game, as a game that could move through growth phases, in the midst of all of this technology disruption.
“How expensive is the game to promote?”
Is your marketing spend justified by the conversion rates? Are people discovering your game in new or unexpected ways? You should be able to clearly and confidently say where you’re looking to invest more resources, and why it would help you grow. Develop an investment “thesis” that you stick with. Conventional thinking, says product makes the game, marketing, markets it. The best gaming companies work tirelessly to integrate the two.
“Is your business model realistic?”
Are you sufficiently staffed to scale as your market grows? A five-person studio that publishes a game every two years may not be learning fast enough to build a sustainable business.
“Is your target market too small?”
Many developers don’t think they can afford to expand beyond their local market. Or they believe success means getting big in the US or China, when they could drive substantial revenue by focusing on expanding to a wider variety of smaller countries.
Growing developers who don’t closely consider more focused questions like these risk attempting to scale when they might not be ready. As the leader of a gaming company, the more you think of your organization as a constantly evolving organism, the more you will test your products, the effectiveness of your marketing, and the value of your design — and the more you test (and fail), the more you learn. Remember: When you’re scaling your company in one growth phase and anticipate the next, the healthiest mindset is “what got you here won’t get you there.”
Eventually, every game hits the limit of the markets and players it was designed for. Game studios will then have to decide whether they want to grow by launching new titles. The ability to create another game whose growth line ascends as the other game descends is the dynamic of all successful, transcending gaming companies that truly scale. It’s important to keep in mind that not all gaming companies aspire to do this, and that doesn’t mean that they’re not successful. You have to decide what’s best in your specific case, based on the games that you offer. It’s about finding the right balance for you — deciding how many growth curves you want to balance, and accepting the trade-offs.
One of the great things about the games industry is that there are relatively low barriers to entry, especially for mobile games, and opportunities for winners in all kinds of markets and genres. You can go from zero to 100 at the intersection of market and genre. And the industry continues to expand. There are more gamers than there were a year ago, and revenue is growing at nearly 10 percent per year1. That trend shows no sign of slowing. There’s great talent and great opportunity for smaller developers, and more than enough room for many to thrive. But it starts with understanding what success means to you — not the market at large — and thinking even more deeply about how your own team, culture, and product play a part in it.
