Saturday, July 28, 2012

Zynga (ZNGA) and Facebook (FB) Dive Together

One of the earlier posts in this blog asked readers to consider the possible effects on social gaming companies of the success or failure of Facebook as a public company. My postulation that gaming companies closely linked to the world's most popular social network would find much of their success out of their control seems to have proven correct over the past week, at least in a small way.

I stumbled across an article on that made me start thinking about the future of Zynga -- the phenomenal company that created an entirely new segment of the video game consumer market. The article, linked below, reveals that Zynga plans to enter the world of online gambling next year, starting with a real-money poker game to be launched in legal and regulated markets. It wasn't too long ago that people couldn't get enough of Zynga's stable of games, staring at gradually-growing landmarks for hours while dishing out hundreds of dollars, 50 cents at a time. Why, then, should the company consider serving an entirely new target market?

While considering this interesting turn of events, I saw Jim Cramer on CNBC's Mad Money highlight the fact that both Facebook (FB) and Zynga (ZNGA) stock took a major dive in trading on Thursday (Facebook plummeted even further on Friday). Then I remembered my earlier post, Upcoming Facebook IPO Could Change the Game for Social Games, and everything started to click.

It turns out that the influence over success or failure for gaming companies linked to Facebook runs both ways. I submit that the independent success of both Facebook and Zynga indirectly rallied each other in recent years, and that we're now seeing the opposite effect. As Zynga recently cut its revenue outlook for the coming quarter and Facebook reported it's number of new users leveling off, the detrimental effects of each piece of bad news seem to be shared between the two, in addition to the expected independent effects. What's good for Facebook is good for the gaming companies that rely on it, and the opposite holds true, as well.

My advice to social gaming companies is to do exactly what the social network that went public with a single productive asset did not do -- diversify your outlets. If Zynga games were as tightly entrenched in The Android Market, iPhone App Store, XBOX Live Arcade and other popular outlets, I wonder if Facebook's slowing pace of growth would affect it as much.

Read More:

Zynga to launch real-money online poker in early 2013

Tuesday, July 17, 2012

Lessons from Star Wars: The Old Republic (SWTOR)

** Read my new post for an update on SWTOR's transition to Free-to-Play ** 

Word is out that the highly anticipated MMORPG Star Wars: The Old Republic is floundering. As Executive Producer Rich Vogel says goodbye to Bioware and subscription numbers dip, rumors are spreading about an upcoming switch to a free-to-play model.

In this blogger's humble opinion, SWTOR is a great game. I've been a huge SWTOR fan from launch, and i still play almost every day. It boggles my mind why this awesome game is doing so poorly, but there is one 800-pound gorilla in the room, which nobody seems to be talking about, that could explain much of the game's troubles.

SWTOR needed about 10 solid servers at launch, but the game launched with about 40 servers (don't quote me on the exact numbers), some with very nasty performance problems. Most players saw their home servers empty out quickly as players flocked en masse to a select few servers. Players who did not investigate the issue and make a server switch probably had the impression that the game was completely dead, and simply left. When you're on a populated server with good performance, this game is truly epic, and doesn't disappoint in a single way.

Imagine subscribing to an MMO that habitually freezes, crashes and glitches, then imagine 90% of your server population disappearing several months after launch, and you will understand what a large number of launch subscribers experienced with SWTOR. This combination can only lead to player attrition with such a large number of attractice multiplayer titles on the market and the horizon.

I think the main lesson to learn from SWTOR is to err on the side of caution when it comes to the number of servers at launch, and to never settle for laggy, glitchy servers for a AAA MMO. Adding servers is easy, but SWTOR proves that reducing the number servers to compensate for poor planning can alienate players and cripple a game.

Bioware has recently locked all but about 10 servers. Any new subscribers should have a completely different experience from those who subscribed between December 2011 and June 2012. So there is a ray of hope that SWTOR can redeem itself. But with so many gamers making decisions based on word-of-mouth referrals, Bioware is going to be hard pressed to convince new players to try the game. Short of coming right out and saying, "We messed up, but now our server architecture is designed to facilitate robust social play," I'm not sure if MMO fans will truly understand how well-designed this game is.
Read more about the current state of SWTOR in this Gamasutra article:

Wednesday, July 11, 2012

Ouya Impresses Kickstarter Backers with Revolutionary New Console

Ouya has burst onto the gaming scene in a big way recently, making headlines equally attractive to gamers and game developers. The company and product of the same name recently blew their Kickstarter funding goals away by over $2 million in the first several days, hooking backers with promises of a new type of console that they hope will change the face of the console-gaming market.

Built on Android 4.0, Ouya is designed as an open-source console with a price point under $100. Ouya encourages and invites indie developers to enter the world of console gaming as legitimate players, rather than as small voices in a crowded market of secondary importance, as is the case with current console's indie marketplaces. Far from a box for gimmick games, Ouya invites AAA developers and publishers to weight in with their best titles, as well.

Much has been said about the impact that Ouya may have when it hits store shelves in 2013, but I am more interested in the game-changing undertones of this project's very existence. The tug-of-war between AAA players and Indies has not seemed to favor either side in recent years. On one side, we see things like Digital Rights Management evolving to a point where sharing games is no longer an option, for example, while on the other side we see indie developers creating more open-source games with unlimited distribution. As another example, we see platforms like the Playstation 3 becoming more difficult for indie developers to break into, while at the same time publishing on mobile platforms becomes increasingly cost effective for indie (and even basement) developers. Ouya represents a merging of these two worlds and a reconcilliation of the two divergent trends. On a mass-market, open-source platform, AAA titles can exist alongside Indie titles with casual gamers unable to tell the difference between the two.

Whether or not Ouya makes the splash that many expect it to, this company has put an idea out into the world, and their success on Kickstarter shows that gamers and developers are not going to let this trend disappear. Ouya proves that the gaming industry as a whole wants to see Indie developers and AAA publishers on more of an even playing field; this can only be good for gamers and the industry.

For more information, visit Ouya's Kickstarter page: