Buying a game company is like buying an aging baseball player. You’ll need a miracle to get another hit. And while they might have plenty of fans, they probably aren’t making a lot of new ones. Mojang hit a grand slam home run with Minecraft, but that doesn’t mean Microsoft should pay $2.5 billion for it, as it’s reportedly going to announce this week. There’s no guarantee it will produce another blockbuster; players will eventually move on from Minecraft, and I doubt anyone is going to buy a dopey Windows Phone just to play a slightly different version of the pixelated sandbox game.
Have we learned nothing from Zynga, Rovio, King and Dong?
Zynga and King IPO’d on the strength of their hits FarmVille and Candy Crush Saga. Both have sank hard since, as gamers inevitably get bored and look for new titles to play. Zynga’s share price has steadily sank to $2.92 from its $10 IPO, and King’s share price has plummeted to $13.19 from its $22.50 debut.
Rovio had the world in its pocket, or more accurately, it was in the world’s pockets, thanks to Angry Birds. But there are only so many pigeons you can chuck at pigs, and now its CEO is out after profits sank 52 percent in 2013. If someone had acquired Rovio at the height of its success, they’d be kicking themselves with steel-toed boots right now.
Supercell brought massively multiplayer online gaming to the masses with Clash Of Clans. But after raising a dumbfounding $272 million, it’s steadily slipped down the charts and out of the top 50 apps over the course of 2014. Clash Of Clans and Candy Crush are still at the top of the top grossing charts, but the other signs say their time there is fleeting.
And then there was Flappy Bird. If ever there was proof that the modern gaming industry is an unpredictable beast as likely to buck you off and kick you in the face as take you for a ride, it was Dong Nguyen’s creation. While other gaming companies with hundreds of employees and tens or hundreds of millions in funding desperately tried to build an addictive game, a single man with no funding from Vietnam captured the hearts and expletives of the whole world. No viral loops. No fancy graphics. No smarmy in-app purchases to squeeze money out of users. Just a game so frustrating it was fun.
Naturally, Dong Nguyen’s next game could never live up to Flappy Bird. Less than a month after launch, Swing Copters is on a rapid decline, down to No. 220 in the App Store now.
But at least Dong taught us you can’t always brute-force your way to popularity. Sure, Call Of Duty and Grand Theft Auto produce best-sellers by just throwing talent at a console franchise, but both of those started over a decade ago and are decidedly not mobile-ready.
Microsoft did score a win by acquiring Bungie in 2000, just before it released Halo. But the studio had already proven its ability to produce good games in different genres (first-person shooter Marathon, strategy game Myth). And it didn’t have to pay nearly as much because Bungie wasn’t riding high on a hit game at the time.
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