Key Moments
Gaming Studio Founders - Patrick Moberg and Holly Liu
Y CombinatorKey Moments
Mobile game development cycles have ballooned from 3 months to 18 months due to increased complexity and quality demands, making high LTV and low CAC a constant challenge.
Key Insights
Dots began as an art project inspired by Yayoi Kusama's dot-based artwork, prioritizing aesthetics and accessibility.
An early marketing splurge on Facebook, possibly due to a bug, resulted in a $10,000 cost per install for Dots.
Mobile game development cycles have extended from an estimated 3 months in early Facebook gaming to around 18 months today.
Cost per install (CPI) can reach $3, necessitating a Lifetime Value (LTV) significantly higher to ensure profitability.
Indie developers can iterate quickly by developing in the open, like Minecraft, or by utilizing accessible tools like Unity.
Esports and AR are seen as growing areas, with AR potentially bridging game accessibility and business success.
The genesis of Dots: Art meets technology
The game 'Dots' originated from Patrick Moberg's art project at Betaworks, driven by a fascination with combining art and technology. Inspired by artist Yayoi Kusama's pervasive dot-themed exhibitions, the concept aimed for beauty and playfulness. Moberg's prototyping process, facilitated by weekly check-ins with co-founder Paul Murphy, led to rapid iteration where gameplay mechanics emerged from the aesthetic design. The initial success of Dots was partly attributed to 'right place, right time' and its simple, accessible design that allowed players to project their own meanings onto it. Early marketing on Facebook, reportedly costing around $10,000, achieved unexpectedly low cost-per-install (CPI) figures due to the game's clean, eye-catching visuals.
Evolving game mechanics and user acquisition
As the casual game market evolved, the simple, geometric aesthetic that made Dots successful also made it difficult to achieve high Lifetime Value (LTV). This led to the development of 'Two Dots,' which incorporated deeper gameplay and aesthetics to cater to fans seeking more engagement. The market has seen a significant rise in CPIs due to increased competition. To combat this, companies focus on increasing LTV, aiming for it to exceed the cost of acquisition. This shift necessitates building more narrative-driven games with engaging characters to foster deeper player investment. While simple games might attract a wider audience, they often struggle to capture the passionate, niche audiences that drive high LTV.
The dramatic increase in mobile game development timelines
In the early days of Facebook gaming, development cycles for games like those at Kabam were much shorter, often around three months, with a focus on Minimum Viable Products (MVPs). This was feasible due to simpler mechanics and less stringent release processes. However, the transition to mobile platforms has significantly lengthened these cycles to an average of 18 months. This expansion is driven by several factors: more complex game mechanics, the need for higher visual quality (including the shift to 3D art), and the intricate process of IP licensing. Furthermore, the shift from web to mobile requires adhering to app store submission guidelines, which adds considerable time. The current model includes 'live ops,' meaning continuous content updates and stability maintenance, further extending the product lifecycle and development considerations.
Navigating the economics of game development: CAC and LTV
The core economic challenge in modern game development is balancing customer acquisition costs (CAC) with lifetime value (LTV). With CPIs rising and competition fierce, the goal is to maximize LTV while minimizing CAC. This is particularly challenging for 'mid-core' games, which aim to attract players who schedule time to play, often involving strategic elements or battles. For Kabam, leveraging established Intellectual Property (IP) like Marvel has been instrumental in reducing CAC because marketing doesn't need to explain the brand from scratch, allowing them to target existing fan bases more affordably than building awareness for original IPs. The increasing cost of acquisition means that every new game launch must be highly strategic and well-tested, with significant budgets allocated even for initial market testing.
The spectrum of gamers and platform influences
Games are often categorized by player engagement levels: casual (played in free time), mid-core (scheduled play), and hardcore (life revolves around playing). Mobile platforms initially favored casual and mid-core experiences due to the nature of on-the-go play and potential interruptions. While hardcore gaming has largely been associated with PC and consoles, the emergence of mobile versions of games like Fortnite and PUBG, allowing cross-platform play, suggests a blurring of these lines. Despite this, the adaptation of complex first-person shooter mechanics for mobile has been historically challenging, though recent successes indicate potential shifts.
Strategic genre selection and the rise of specialized talent
Choosing the right genre and ensuring the development team possesses the necessary specialized talent is crucial for success. Studios must be thoughtful about genre selection, considering market needs and internal capabilities. For instance, attempting to build a racing game with a team experienced only in RPGs or strategy games could lead to failure, as mechanics like drifting require distinct expertise. Kabam's experience with the 'Fast and Furious' game highlights the need for deep genre knowledge, requiring designers with extensive experience in racing mechanics. This specialization trend means that a game's success is dependent not just on having the right genre, but also on having the right team with the appropriate skill set.
Indie development strategies and the role of community
Indie developers face different challenges and opportunities. Strategies like developing 'in the open,' as seen with Minecraft, allow for early player engagement, bug testing, and community building, often with a lower upfront cost. Platforms like Steam and Humble Bundle support indie creators, and tools like Unity make game engines more accessible. Paper prototyping and creating a portfolio of work are vital for aspiring developers. Modifying existing games also serves as a low-barrier entry point into game development. Building a passionate fan base from the outset is a significant advantage for indies, leveraging their reputation and craft.
Future trends: Esports, AR, and blockchain's potential
The future of gaming is seen in several key areas. Esports continues to attract significant attention due to its viewership and potential for viral growth, although successful mobile esports titles are still emerging. Augmented Reality (AR) is poised for growth, with major tech companies investing in the platform, bridging accessibility and business success. Blockchain gaming, while currently facing accessibility hurdles (e.g., requiring MetaMask), holds potential, especially for virtual economies and new monetization models. However, the core challenge remains: creating genuinely engaging games that players want to play, regardless of the underlying technology. The success of games like Candy Crush and the challenges faced by 2048 highlight how simple, accessible mechanics, even when cloned, can dominate certain segments of the market.
Mentioned in This Episode
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Game Genre Classification
Data extracted from this episode
| Genre | Description | Play Style |
|---|---|---|
| Casual | Play whenever you have free time | Play in free time |
| Mid-core | Schedule time to play | Intentional play, not life-defining |
| Hardcore | Schedule your life around playing | Life-defining |
Common Questions
Dots began as an art project at Betaworks, an incubator in New York City. It evolved into a game that synthesized art and technology, inspired by the dot-based work of artist Yeo Kusama.
Topics
Mentioned in this video
A game development company where Holly Liu previously worked, transitioning from web to longer mobile development cycles.
The company that started Fig, a crowdfunding platform for indie game developers.
A streaming platform that can impact game development, particularly for games that are engaging to watch.
A platform that enables user-generated content and has been influential in opening up game development to a younger audience.
A game company whose titles like Overwatch are discussed in relation to streaming and mobile gaming.
A platform used for early and effective marketing of the game Dots, noted for its low cost per install due to aesthetic appeal.
An incubator investor where Dots originated as an art project.
A game publisher known for creating simple, geometric shape-driven games.
A brand whose intellectual property (IP) was licensed to help reduce customer acquisition costs by targeting existing fans.
A platform described as a Kickstarter for indie game developers, started by the Double Fine team.
A platform mentioned for its role in supporting indie game developers and their fans.
A game development company noted for raising the quality bar in mobile gaming and developing games like Brawl Stars.
A company supporting the AR platform, indicating its growing importance in the gaming landscape.
A company supporting the AR platform, indicating its growing importance in the gaming landscape.
A company supporting the AR platform, indicating its growing importance in the gaming landscape.
A company that is mentioned for its philosophy of gamifying natural human hobbies.
A favorite game of one of the speakers, similar to Candy Crush in its successful casual game mechanics.
A strategy-based game cited as an example of mid-core gaming, involving resource management and military conflict.
The second game developed by the studio, offering deeper gameplay and aesthetics compared to the original Dots, meeting fan demand.
Mentioned as a game that requires more explanation than IP-based games like Marvel.
A popular first-person shooter game that has been ported to mobile, allowing cross-platform play.
A game mentioned as an example of a simple mechanic where the value came from selling celebrities.
A favorite game of one of the speakers, representing successful casual game design.
A platform mentioned as a place offering opportunities for indie game developers, alongside Humble Bundle.
A mobile game that started as an art project at Betaworks, known for its simple, accessible, and aesthetic design.
Mentioned as a game that requires more explanation than IP-based games like Marvel.
A popular first-person shooter game that has been ported to mobile, allowing cross-platform play.
Cited as an example of a theme used in early casual games that proved to be derivative.
A game developed by the team mentioned, which would have been ill-suited to build a racing game due to specialized mechanics.
Mentioned as a game that was released before completion, allowing players to be part of its development and bug testing.
A game from Activision Blizzard mentioned in the context of downloadable games and eSports on mobile.
A successful mobile game that also became popular on streaming platforms, indicating potential for mobile eSports.
A game from Supercell in test markets, being developed with the intention of becoming an eSport.
A digital wallet required to access blockchain games, cited as a barrier to wider adoption.
A game engine that is accessible to most people and recommended for aspiring game developers.
Used as an example of high-production value television that requires significant character development, similar to modern game design.
Cited as an example of a TV show with a long tail of retention, contrasting with movies which have a peak and decline.
Mentioned again in the context of IP and genre fit, where early conversations with them were limited by the available engine.
A film franchise whose IP was licensed for a game, requiring experienced designers to capture the essence of racing.
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