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What does it take to make a successful games company?

By on May 10, 2010

I chaired a very august panel of games industry figures at the inaugural Investec Digital Media Conference last Thursday.

The conference brought together leading digital media companies together with a range of investors and was illuminating and informative. I was particularly impressed by Michael Acton Smith’s description of Moshi Monsters’ success, Wil Harris’s exposition of how video content will work on the web and his experience at Channelflip and the newspaper panel, particularly Tim Brooks of the Guardian Online and James Bromely of the Mail Online.

The games panel was incredibly varied:

  • Ben Holmes, Partner at Index Ventures and investor in Stardoll, Mind Candy (who make Moshi Monsters), Playfish and
  • Christoph Gerlinger, CEO of Frogster, a German-listed company that offers free-to-play roleplaying games with a client download
  • Riccardo Zacconi, CEO of skill-based gaming business
  • SImon Guild, Chairman of Bigpoint, the browser-based MMO company
  • Kieran O’Neill, CEO of Playfire, a social network aimed at hard core gamers
  • Chris Deering, Chairman of Codemasters

What does it take to succeed?

The world is changing. We’re moving from games in boxes to games as services. What did the panellists think a twenty-first century games company needs to succeed?

  1. A combination of creativity and business skills: Traditional developers are not retailers. They are not consumer marketers. They don’t know how to talk to their audience and persuade them to part with money. Ben Holmes of Index said that there are many creative developers, and many good business people; looking for the rare individual or management team that combines both is what he spends most of this time doing.
  2. Endlessly refreshed content: Consumers want new content all of the time. If you are going to run a business that only releases 20% of your content upfront, you’d better have a plan for keeping your content flowing to stop consumers from getting bored or leaving.
  3. Scale: You need to be big. For skill-based gaming, you need a critical mass to match people of similar skill level. For other businesses, being big enables you to extend the life time value of your business by cross-promoting your titles.
  4. Focus on metrics: You need to understand your audience. Don’t guess; look. That’s not to say you can’t have a strong creative vision, but more often than not you can answer the questions you have about what your audience like simply by looking at your numbers.

And what’s the most exciting thing about games in the next five years?

  • Motion sensors
  • Console-quality games in your browser
  • More and more people of all demographics playing games
  • The emergence of Facebook as a fabulous new distribution platform

Do you agree with the panel? What would you have asked them if you had been there? (I’ve got a lot of conferences coming up this year, so your questions won’t be wasted.)

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: