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.

http://www.ft.com/cms/s/2/37c3d96e-280c-11e1-a4c4-00144feabd...

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...

I don't know if I agree with that. At the time of the original Angry Birds launch, I didn't really think they could branch out as far as they could.

Rovio really redefined the limits.

Draw Something would obviously have to go in a different direction. But board game, game show?

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...)

By the way, it looks like Zynga is in talks to buy OMGPOP, looks like one big hit is all it takes!

> Sometimes it's nice to provide a few jobs and make some bank.

Unfortunately, with $17M VC funding, I doubt the stock owners feel the same.