[abhiv]

The idea of a game company that's venture-backed before shipping anything seems odd to me.

The startup world in general is moving toward a hits-driven model, but a game company whose product is only used for entertainment takes this to an extreme. A game like Glitch doesn't solve any problem, and it's not even a generalized tool like Twitter where the problems it enables solving become apparent later. It's simply a game, that will live or die based on how well it entertains people. It's very hard for me to understand how investors evaluate an idea like this before anything has shipped. (Of course, Stuart Butterfield probably raised money based on past success alone.)

It doesn't even seem like the company had plans to build a portfolio of games like a Zynga or EA. So they raised a bunch of money before they had even a glimmer of product-market fit, hired a bunch of people, and then figured out that their game wasn't good enough.

The only strategy that seems to work in the game business is to be a low-budget, low-profile indie developer for a few years till you have a portfolio of titles that you've developed yourself or for a publisher, then raise financing (debt or equity) to develop a larger project on your own steam. Raising money from the start for a single high-profile, whimsical product seems destined to fail.

Of course, hindsight being 20/20 and all that.

[wmf]

Good MMOs are supposed to last for years. Perhaps they pitched it as a "casual WOW".