[autobahn]

Brings up an interesting thought exercise. Let's say you do start a small mobile game company and your game blows up into a cultural phenomena like Angry Birds.

And like all of these things, you know that one day in the indeterminate future, that phenomena will fade, much like Angry Birds has.

How do you best handle this? Do you sell early and get out quickly? Do you try to build something larger out of the resources you now have?

I'd be tempted to cash out early and just enjoy the fruits of my success.

[codingdave]

Absolutely cash out. Internet fame and popularity is fleeting. Building up 800 employees because of one hit is a huge gamble. You could get another hit... but better odds are that you are just throwing money down the drain. Be happy for what you have, monetize the crap out of it, sell it at the peak if possible, and let it go.

[vladd]

It has been one of the criticism that gets brought up about the Blizzard CEO - the fact that he won't invest unless the game is exploitable over long periods of time:

https://en.wikipedia.org/wiki/Robert_Kotick#Gaming_controver...

However when looking at Rovio and Angry Birds right now, it looks like a really sound strategy.

[codingdave]

Gaming is a funny industry in that way - the moves that makes good business sense sometimes piss off your customer base.

[listic]

I am at a loss why does one even need hundreds of employees for a company that produces a simple arcade game. I mean, you are not supposed to scale an arcade game, are you?

[extesy]

There are a lot of non-engineering jobs there. You've seen plush angry birds in stores, backpacks with angry birds pictures, etc, haven't you? Someone has to design, market them, negotiate with suppliers/retailers, etc.

[ido]

They've also made lots of other games (many of which canceled before release) - it's just that none were close to as successful as angry birds.

[cookiecaper]

The thing that indie devs don't recognize about gaming is that it's a hits business, just like film and music. _Success of your franchise is not an endorsement_. People consume hits and toss them away for the next big thing all the time. The reasons independent game companies make these mistakes is that they conflate the mass appeal of their creation with a personal endorsement and assume anything they do in the future will be well-received. That's rarely the case.

To be a successful player in the hits business, you have to be putting out new, formulaic stuff constantly, aware that some percentage of it will never make back its money, some may break even, and some will make a lot of money. This is what movie studios, record companies, and the successful game conglomerates do. As much as it may get tiresome to see the bi-annual CoD release break records, it matches the expected behavior perfectly.

But I digress. The direct answer to your question is pretty similar to what it always is: don't grow too fast, don't let it go to your head, and diversify. Personally, if I was in that situation, I think selling out to Activision or EA, who already have a functional hits apparatus, would be a path warranting serious consideration. A lot of game developers are eventually forced into that position anyway after they make the erroneous assumptions discussed in this comment and become financially distressed.

[the_af]

What do you mean, indie devs don't recognize this? Maybe some (or many!) of them do, but aren't interested in "putting out new, formulaic stuff constantly".

Some indie devs may be trying to get acquired by Activision or EA, the kind of indies who would grow to have 800 employees, and some may just be trying to do their thing in an environment that allows them to explore different gameplay and/or artistic choices. Not everyone's goal must be necessarily to sell thousands of copies at whatever personal cost.

[cookiecaper]

>What do you mean, indie devs don't recognize this?

I mean hiring hundreds of people because one game became popular is a bad decision. It happens a lot, and the result is almost always layoffs and eventual bankruptcy, when a conglomerate like EA takes the opportunity to snatch them up.

If indie devs want to keep plugging away for personal fulfillment regardless of the popularity, that's great, but don't drag 300+ people into it unless you're going to be serious about making a successful business, which, in games, means churning out a lot of formulaic content.

[ChuckMcM]

Depends on what you want in life, personally I'm a big fan of develop enough capital to give yourself infinite 'runway' as an engineer (basically enough of an endowment to provide for your living expenses, your family obligations, and stuff to develop new things.) But that is me, I'd be happy spending my time building and programming gizmos while looking for commercial opportunities for the same. Ultimately its a fairly selfish target since in that model I'm not changing the world for the betterment of mankind and my social impact is limited to people I help along the way. And it has a safety aspect to it which is "make sure me and mine will be ok, then look to improving the rest of the world." but it is actionable and fairly straight forward to define as a target.

So then you have people like Elon Musk who have pretty much everything they could ever want, and they risk it all to start an electric car company. I have a huge amount of respect for his willingness to do that, I don't believe I would be able to. Of course in the 'excess success' category I would be putting that excess capital to work in things.

[dangero]

I believe the makers of Draw Something won this game. Sold right at the peak of popularity then faded to relative obscurity within a few months.

[Reedx]

Stay small enough that you can use those resources to maintain an indefinite runway.

To me a windfall like that means you get to remove poisonous elements from the game development process. Namely marketing and business concerns, which tend to warp game design. For example, you would never introduce an artificial energy mechanic in a game that you made for yourself.

Now you can focus purely on making a great GAME. Everything that goes into it can be in service of making it a better experience. Which I believe also happens to be the best strategy to making a successful game.

[aamar]

I think it requires awareness about how deep the value of your product goes. E.g. I knew the creators of a very popular cable show (Queer Eye for the Straight Guy) and despite surprising overnight mainstream success they were remarkably clear-eyed about how long the phenomenon was likely to last and how to exploit it over that time period. Other shows in related genres like Top Chef or Project Runway were capable of a longer life because their premises inherently support a richer variety of stories. Both kinds of properties can be valuable.

Angry Birds is predicated on a great, clever irony: fuzzy, harmless-looking creatures with facial expressions and behavior of furious vengeance. But it doesn't seem like there's a lot of deeper/substantive places to go with that: a single emotional register is quite limiting for storytelling.

The odd thing is that Rovio's actions are a mix of rapid exploitation (all the brand-sapping tie-ins, not embedding the birds in a bigger 'universe') and enterprise building (huge headcount, freemium model).

[Tiktaalik]

Games is a hit driven industry and it is incredibly hard to predict what will become a hit. Incredibly great games can underperform for a variety of reasons. Even a bad release date could really hurt a title.

If one were to attempt to build a larger game company out of a single hit, one would have to create a company that would have a lot of variety of projects and that would be able to weather certain titles bombing. In practice it seems that this is incredibly difficult, as over the years the number of big game studios has steadily shrunk.

[codingdave]

You would almost have to copy how YC incubates startups - fund small teams to build prototypes, expand and profit on the hits. The individual teams take on the risk, while you are diversified enough to make money on the big picture.

[mmcconnell1618]

I'd suggest a Hollywood movie studio model. One parent company that can groom and produce multiple games in different genres. Each game gets its own company with money invested in development and profits over a limited lifetime in sales. No one expects Titanic to make the same amount of revenue in year 2 as the year it gets released. Expect a huge spike in revenue for popular games early on with a long tail of diminishing returns. If you can capitalize on the intellectual property like Disney does you can create a merchandising revenue stream that may last a long time.

[vvanders]

I think Notch is one of the few to handle this well. He supports other indie devs that look promising rather than trying to bottle the lightning a second time.

[VLM]

Something else rather important to consider is Mojang has (had?) 49 employees. Not 800 at peak like rovio, not 4900, not even 490.

One is an insanely complicated 3-d cad physics rendering simulator.

The other, the one with 20x the number of employees, is 2-d sprite based bowling with gravity.

[chkuendig]

Either you accept that this is a hit-based business, take the money and run.

... or you do what Rovio did and try to branch out beyond games and build a larger brand out of it.

That's probably easier than trying to find the next hit (see how that went for Zynga or how its currently going for King)

[untog]

The thing I don't understand about making something larger is that you're ruining the circumstances of your original success. Not say that you were definitely successful because you had a small team, but I don't see any evidence that having a bigger team makes you more likely to produce a hit.

As other have said, I'd cash out and get to working on the next game. Of course, that's all very well for me, Mr. Fictional Founder - my employees might have other opinions.

[ido]

Look at it this way - the guys making this decision probably end up with more money than they could possibly hope to spend either way (just stash away a couple dozen $MM).

Might as well take the risk of trying to build an empire?

[notNow]

It always surprised me that these people treat their mobile game studio as a going concern when this business has all the features of the lottery where you enter repeatedly till you win big and when you do you get the cash and take off with no more time and money spent on buying lottery tickets and "optimizing" your chances to win.

I guess this could be attributable to the gambler mentality where they believe that the fact of past winnings is indicative of more and bigger winnings in the future but I think that AB were rather prudent albeit rather late that they cut their losses and laid off people to buy them some time.

Will they get out before it's too late? This remains to be seen.