candy crush

I am what you might call a committed Candy Crush player. The kind that waits for KING to issue new levels and then promptly completes them. So I was interested to check out the sequel to the billion dollar franchise, Candy Crush Soda Saga (iPhone, Android).

I didn’t like the game at first. What’s this purple float that rises from the bottom, inverting gravity so candies float up instead of fall down? The game also looks weird. Gone are the candies’ bright, colorful hues; replaced by this strange, purplish, dark-ish tone that looks like the candies are old and drenched in fruit punch. Ugly.

But I plowed on…and after completing a dozen levels, I now kinda like it.

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The conventional wisdom is not to invest in videogames because of its hit-driven nature. Only a handful make money and it’s difficult to predict which will. A company that produced a successful game may never produce another. Like a music band that’s a one hit wonder.

Videogame companies typically make a bad investment, because you want to invest in a repeatable business model. Not luck.

The traditional console games industry has combated that with franchises. Gamers who love a game will remember the brand and are more likely to buy the sequel. Grand Theft Auto, Halo, Madden, etc. are all examples of this.

Unfortunately, this strategy does not appear to work for mobile, casual games. Casual games, by definition, have simple gameplay. Is it possible for a sequel to feel fresh and new, yet still have the same simple gameplay?

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Microsoft is acquiring Minecraft maker Mojang for $2.5 billion. I’ve got mixed feelings about the transaction.

The strategic benefits are questionable and financially, Minecraft is worth maybe $1.8 billion — a valuation which assumes a sequel is as commercially successful as the original, and which assumes the intellectual property rights founder Markus Persson took out of Mojang is part of the transaction.

A $1.8 billion valuation leaves $700 million that new revenue streams like additional merchandising, a successful movie, etc. are unlikely to cover.

The best possible explanation might be that Microsoft is using its foreign cash reserves to pay for the acquisition — money that would be difficult for Microsoft to use domestically for tax reasons.

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In yesterday’s post, we casually mentioned Tinder as an example of how a successful app is both great product and great marketing. Nothing just sells itself. There are lots of wonderful products that die a quiet death because nobody knew about them.

“Marketing” might be a misnomer, because technically product is part of marketing. What we mean is a go-to-market strategy: price, single-minded proposition, awareness building and distribution strategy.  Not only do you need product-market fit, you need an effective way for product and market to find each other.

Take Snapchat as an example. Snapchat, despite being the same essential product from inception, puttered along at first without any traction. In fact, Bobby Murphy, one of the co-founders, got a full-time job elsewhere while the other, Evan Spiegel, returned to finish his final year at Stanford. The two had basically given up on Snapchat. Then they got their lucky break: Spiegel’s mom introduced the app to her popular niece who went to a school where Facebook was banned; soon, all the students there used Snapchat. Murphy and Spiegel saw the numbers and realized they had a hit, and that the way of achieving it was through teens and schools. The rest is history.

Note: the big break wasn’t a product change, it was simply marketing.

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