3 French games studios in trouble – are Social & Mobile still keys to success for games studios?

Innovation

credit FutureshapeTwo social gaming studios publicly announced they were closing these past few weeks in France, Mandala and Qozmo. We often hear from companies having a hard time that the Facebook market has been becoming tougher in recent years, and if several companies in the same space fail in a short time, this can turn into . True, Facebook is a quickly maturing market, with its gold rush phase firmly in the past, but does not mean there aren’t many opportunities to seize. I know firsthand how tempting it is to blame a failure on market conditions in any domain, but that’s never the whole story. So let’s take a closer look at what 2012 was made of.

Kobojo’s year of turbulence

Kobojo was in july 2012 the second largest French social games publisher, and is now 4th, due to a loss of about a third of its daily players. Its two co-founders have left the company, Vincent Vergonjanne having gone on to found gaming startup EVERYDAYiPLAY in Poland, while former CEO Franck Tetzlaff is looking for new challenges.

One should not confuse however turbulence with free-fall. I talked to Charlotte Lavergne, the new Marketing Director, and what she painted a much more balanced picture. First, one must realize that Kobojo’s current games like PyramidValley have been around for 2 years on average, and are pretty stable in their player numbers. So that’s for the foundation on which they can build, and for which the team (still at 60 people) deserves credit, as well as the original co-founders, no matter whether what triggered the change in management. What is certain is that 500k DAUs is still a solid base to build on.

Kobojo’s made some changes to its strategy, namely going much more mobile and starting to explore other platforms as well. They are currently soft-launching Questionary, an inherently viral trivia game on Facebook, Android and iOS. It has the potential to do quite well, maybe not at the Songpop level of awesomeness, but at least at a more than decent level. I believe they have the right elements, but then it’s a matter of cooking them perfectly together. Kobojo is also committed to innovate on another Facebook game project, that seems like quite a big deal internally, and something different from what they have done before, but Charlotte wasn’t ready just yet to disclose any specific information on the topic. All in all, it seems like Kobojo is facing its issues head-on, and is already turning things around, so it’s not unreasonable to assume they’ll manage to climb back up to 1M DAUs and beyond.

Alchemy, aka business as usual

Incidentally, when Vincent Vergonjeanne was telling me his thoughts on the social gaming market, and explaining why he favored mobile gaming in his new venture, his take was that social Free to Play games were especially difficult to get right, requiring an almost perfect alchemy. One key element in the context of rising user acquisition costs, was achieving a high organic growth, so that the lifetime value of players could exceed the costs of development and customer acquisition. It might sound obvious, but the trap of tunnel vision is ever present, and renowned developers and publishers, like THQ, have crumbled under debt.

In social gaming, I believe there is still ample room for growth and innovation. Video game developers, from indies to big names, have known this for a while, trying to balance building long-term revenue streams, i.e. hit franchises, and constantly innovating. Mobile/social gaming developers can do this just as well as traditional ones. It is however a very delicate exercise. Contrast Rovio‘s Angry Birds success, where every iteration on an essentially similar game-play is eagerly awaited by fans, with the much less positive reactions of players having tried one too many Zynga games. Think also of the almost overnight success of Pretty Simple Games, now France’s leading social games publisher, and the incredible footprint King.com acquired on Facebook over the last couple years. There isn’t necessarily always a great deal of innovation, but there is always the right alchemy.

So for 2013, it is somewhat video games business as usual. The industry, though still very young, has matured past infancy and started to find its stride. In France, some companies are rising, some are failing, and some are navigating in between. it’s getting closer to what traditional video games developers have been experiencing for the last couple decades. I am still more optimistic for the social and mobile games industry than for the AAA games publishers, as the next-gen consoles are now commanding production budgets so incredibly high that even sales of a million copies don’t cut it anymore. This year too will see great mobile and Facebook games emerge.

3 Responses

  1. Avatar
    Michael

    Actually, from what I know from some people inside, this is not 2 but 3 co-founders who left the company, and many things and numbers reported here aren’t acurate.

    • Avatar
      Liam Boogar

      Yeah, I think we had trouble getting clear indications on who was there and who had left – just a bunch of unreturned mails. Confirmed two.

      Would love to hear about which numbers are accurate, as well as what you think those numbers should be.

  2. Avatar
    Graeme Taylor

    To whom it may concern.

    I am one of but thousands of players world wide that has been ripped off by the company named Kobojo games France in the online game called Atlantis Fantasy.

    Daily i see one post after another in the hundreds from disgruntled players world wide asking for assistance from Kobojo games regarding game glitches, items paid for but not received, in game credits paid for but yet again not received once more.

    Even the companies online support system has gone totally ignored as far back as Early November 2012 from thousands of players world wide who having problems with the game used the online support ticket system only to find themselves blatantly ignored by Kobojo games France when doing so.

    This has to stop players are losing money at a staggering rate daily and yet when a player submits a support ticket asking for an explanation for the problem(s) or for the problem to be fixed and then reimbursed ( compensated ) for their loss due to the problem once again they find themselves totally ignored by Kobojo games France.

    We ( the world wide players ) are not asking for much, all we want is for our support tickets to be answered in a reasonable time frame in an expedient manner as quickly as possible.

    Failing any feedback or return of information / respect from Kobojo games France we ( the world wide players of Atlantis Fantasy ) will commence legal action without delay or without any further warning to either your company or to Kobojo games France via the European legal system and will commence to seek compensation for our losses in a timely manner.

    We find ourselves forced into a corner by the total lack of respect from Kobojo games France in failing to answer well over 100,000 support tickets from players world wide in an expedient manner within a reasonable time frame.

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