From the linked (and more interesting, IMO) NY Times piece:
Draw Something is the creation of OMGPop, a social gaming start-up in
New York that has been churning out titles for the last four years, but
has struggled to produce a hit. Games like Cupcake Corner, a bakery
simulation, and Puppy World, in which players care for virtual canines,
both gained modest followings but failed to catch on among a wider audience.
“For a long time, we made games that did not get any traction,”
said Dan Porter, the chief executive of the company. Draw Something,
however, “was a crazy out-of-the-box success,” he said.
Draw Something has charted a turnaround for OMGPop, whose finances
were flailing. Its original founder, Charles Foreman, left the company
about a year ago. Although the start-up raised $17 million in venture
financing, the company had nearly burned through that reservoir. Now,
though, Mr. Porter said, the company earns revenue in the six figures,
generating more money for the company “in a day than we used to in a month.”
Similar parallels to Rovio here, it's interesting to hear about how many other games they made before they found their massive hit.
Also interesting to find out that they were nearly out of cash.
I heard from a friend that used to work there that they were oddly averse to making mobile games- until recently all their games were Facebook-based. Draw Something is one of the few they actually prioritised as a mobile app, and it paid off.
This is the story! I was interested in this company early on because the products were great - I was playing the progenitor to this game, "Draw My Thing", four years ago - so I agree that there's more than luck going on here. For all their talk about "trying for years", it's telling that a search for OMGPOP on the App Store basically only yields three games.
Their main aim seemed to be to become a platform (albeit consisting of their own games) more than making hits. So they were reluctant to build iOS or Android-specific things (their early efforts were half-hearted compared to their impressive web games) and they were slow to build on Facebook as I recall.
>"That would be 36.5M$/year although I doubt those kind of revenues are sustainable."
Of course it's not sustainable, but you can certainly recover your investment, plus...a lot more. Then you move onto the next thing. It works if you're making $10k or even $1k a day.
It's a proven model that should be used more often in this "hits-driven", fad-based tech world. You can get cash flowing positively and quickly with a good idea. Not every game or photo sharing app that takes off should be thought of as a billion dollar, world changing business. Sometimes it's nice to provide a few jobs and make some bank.
This model interacts a little quirkily with the expected lifecycle of companies which take VC investment. (If you haven't raised $1X million from VCs, feel free to ignore what any VC would say about you.)
There are a couple of clocks ticking. One is burn rate versus reserves, and having a portfolio strategy where you produce X flops to 1 hit and then cover your expenses does stop that clock. There are other clocks (+), and the studio model does not really have a pause button for them unless you're acquired for strategic reasons.
+ Prominent among them "How many days are left before nine months before the date at which the oldest VC fund from which took money expires?"
There are unfortunate-for-the-entrepreneur consequences of any of those clocks running out, since right before the buzzer it will be suggested that they sell the company. At that point, the value of the portfolio amassed by the studio model gets evaluated, and unfortunately the value of most past-the-new-release-window studio-esque IP is very, very, very tiny compared to the value of e.g. a company with an existing base of 200,000 customers and permission to charge 220,000 credit cards next month. It is not necessarily the case that the sale will value the company higher than the investor's liquidation preferences. That is just one way under which an entrepreneur who lead a company generating profits every year could be told that their 30% stake in the company was valueless.
You might have said the same about Angry Birds, and yet they've been able to milk that into about $100 million in annual revenue with App sales and licensing.
It's difficult to make the comparison, Angry bird had a product that you could build a brand around (albeit a fairly one dimensional brand); where this game is inherently much less "brand-able" However, this does reset the clock and put some revenue into the system. I wonder which of the games/portfolio of games OMGPOP pitched to VCs to get to $17million... It must have been a really good one; just goes to show you that even the best "ideas" don't always pan out. There will always be an element of luck associated with a new venture. Maybe this is where OMGPOP turns the corner...
Angry Birds lends itself to a product, they have a very specific set of characters and goals/tasks, as well as a back story. DrawSomething is much more broad, there is no direction in it; the only goal is to essentially play pictionary; I can do that at home. Where they've changed the game is that you can now do it easily with your friends hundreds of miles away. That simplicity is what limits it, but also makes it so popular.
You can draw a parallel to something like pinterest; is it a hugely popular site, absolutely, but what can they do now to make money? license it? develop a product? sell you products that people pin? so far the answer is no for all 3 of these options (the last option is something they're working furiously on to monetize the site, but the volume and randomness of items that people pin make it so fragmented that it's difficult...)
Warning: Anecdote, not data, etc:
I just started playing with Draw Something last weekend, and I do have to say, it's really powerful: Getting a message a friend of you (!) has drawn something(!) and you don't know what(!) and you can score points(!) by guessing is really powerful, and wants you to open the message (and, thus, reply, as that is built in).
I also like how they combined free users and paying users, to grow the network and make revenue.
I don't know if they will exist in a year, but in a few weeks they have grown faster than Instagram in 1.5 years (and THAT was a really quick growth in itself!).
This is actually the first mobile app that my friends were using before me. Wordfeud was pretty big, saw a couple people every now and then playing it on the train. DrawSomething I've seen dozens of people playing on the train and lots of my friends play too.
From what I've seen, classic game makers get obsessed on silliness enabled by the platform. Annoying, repetitive cut-scene animations, for example. Monopoly on the DS was like the website of a retailer (or Homer Simpson) in 1996.
I think independent developers do a better job understanding the platform and how to cut to the fundamentals of the game with the best presentation.
Based on my own sales history (I've made 5 figures in one day on the app store before), I can guarantee you that based on their top grossing rankings, they are making much more than $100K. They are sandbagging when they say "more than 100K"
With 2 billion drawings, Omgpop possesses a valuable source of information. It would be interesting to see how different people illustrate equal words differently or equally in their illustrations. This could contribute to e.g. best practices when communicating with graphics or the like.
I know that luck is the intersection of preparation and opportunity, but I think the opportunity part of that equation is still a little random, especially in the context of casual social and mobile games becoming big hits\fads.
It's (relatively) easy to find successes, but I'd be more interested in postmortems of the ones that fail... companies that make good products for years but never get that push over the cliff.
Slightly O/T, but does anyone else find the reviews for this app a tad, well, suspicious? Virtually all 5* and the wording of the reviews is all very similar.
The app prompts you to give it a five star review at various points. It presents you with a button that says "rate this app five stars" or something along those lines. I haven't pressed it so I couldn't tell you what process comes after that, if any.
How else would your friends get in touch with you to start trading drawings? It's unobtrusive and slick. The only facebook related things I've seen from this app are terrible drawings that people are sharing.
I shared my username with my friend via iMessage. I am very wary of adding any sort of application to Facebook, especially anything with "in-app purchase".
Is there not some kind of IP issue arising from copying the fundamental part of an existing game e.g. pictionary - "guessing a word from a picture".
I'm only asking, just seems a bit like shooting fish in a barrel releasing these kind of games and sooner or later one of the people who came up with these ideas is going to start noticing and want a piece of the action.
Pictionary includes a board game element with teams and some other folderol I think.. the core gameplay element, I.e. "I draw something, you guess what it is" has been around long before there was a Pictionary, or a Draw Something, or an Isketch, or InkLink, or ....
It would be like trying to sue someone for an implementation of tic tac toe. Though in today's environment, I'd be shocked to learn someone hasn't tried.
I'm not sure how it works with board games however I do know that for computer/console games mechanics are not patentable. Tetris is an exception because if you use the same shape blocks then they get you for the artwork. I highly doubt that you can patent drawing in a game form.
This is the reason that CEO of Omgpop keeps saying in his interviews that he has never (extremely unlikely) played, seen or heard about Pictionary before making this game.
Whooooa. They raised $17M in VC to develop this game and were in danger of running dry? I mean my God... something's not right about that. It's hard to imagine an iOS game that couldn't be developed, tested and deployed for well under $1M. To put this in perspective, Halo 3 employed about 300 devs and artists, and cost around $30M. I get that VCs need to put in a lot of money to fill their quotas, but what was all of that spent on? Marketing?
[EDIT]Sorry. My mistake. I misread the article as meaning that $17M was raised for this game. I didn't know they'd put out 42 games. I retract my criticism.[/EDIT]
iminlikewithyou raised money four years ago to develop games for the web. You're just hearing about them years after after they changed their name to omgpop and released 42(!) games.
Your mistake about the purpose and timing of the $17M notwithstanding, it certainly still sounds like a lot of money to me. The amounts of venture capital seemingly just 'floating around' in the West and East coasts of the US are staggering to me as an outsider. (That's seemingly — I realise that companies do actually have to work to attract funding.)
Also interesting to find out that they were nearly out of cash.