泥中蟠龍's Game愛歌 [A love song for games of the dragon waiting for an opportunity] No one can leave the island on foot

泥中蟠龍's Game愛歌

[A love song for games of the dragon waiting for an opportunity]

 

No one can leave the island on foot

December. 28. 2017.

 

I heard a heartbreaking story from an acquaintance in the gaming industry a while ago. Investors are reluctant to invest in mobile games, despite currently ongoing boom for the local gaming sector thanks in part to a couple of successful game makers. In particular, some start-ups are said to be cash-strapped. Even an investor who is interested in a big publisher's game project that a famous developer involves doesn't want to consider to commit capital to a game with a low success rate due to astronomical cost for marketing, user or marketing data tracking, and a global strategy, etc. I strongly argued that not every venture capital firm isn't like that and I actively examine details of the small start-ups, however, it is true that he pointed out that I don't represent the whole venture capitalists and most investors currently aren't interested in mobile games much. I also sympathize with him in his point of view about the reason why investment firms are passive in spending money.

 

There is no riskless investment, not to mention the cliché that 'Never let a good crisis go to waste.' The more you take the risk, the more you can expect high profit. Venture capital is high-risk, high-return investing in support of business creation and growth. VCs may turn the currently hostile environment by investing in a handful of prospective companies with good conditions. The latest cases that created huge investment returns were born from courage in the face of danger. A developer should persuade an investor to stress its strength. It's probably as unlikely that a game without a very distinctive concept, design, or gameplay will be a huge success, as it is unlikely that a classic arcade game Galaga will make a comeback thanks to the recent retro fad in the whole content industry. Game makers must have a point to encourage users to distinguish themselves from other ordinary game developers and use it when they make investors believe that their product is well worth investing in. Despite in case the project failed, they need to highlight the games' strengths that their return on investment will be pretty high if they succeed.

 

A market that is not open to business from companies in other countries is called 'Galápagos islands'. The recluse islands are often cited as explaining Darwin's theory of evolution. Galápagos each have their unique flora and fauna because of out-of-the-way places with the uncommon natural environment. On the contrary, it is difficult for those animals and plants that adapted well to the out-of-the-ordinary setting to survive in a normal environment. The local gaming industry has adapted to a peculiar circumstance for a long time may lose survival ability in the global market place. Now developers should try to leave the island. The effort is subject to take many risks and more challenges ahead. Challenges at great risks don't guarantee success. But I'd like to say that no one can leave the island on foot.

 

※ This is from Kyunghyang Games column by 泥中蟠龍 since September 2013.

(http://www.khgames.co.kr)

 

Translation by Kim Ki-hui

 

泥中蟠龍's Game愛歌 [A love song for games of the dragon waiting for an opportunity] Survivorship bias

泥中蟠龍's Game愛歌

[A love song for games of the dragon waiting for an opportunity]

 

Survivorship bias

 

December. 14. 2017.

During World War II, United States Armed Forces conducted a study of the damage done to aircraft that had returned from missions to minimize bomber losses. The study showed a tendency by the returning aircraft, in particular, to be hit on the wings and tail with a bullet and had recommended that armor be added to the areas that showed the most damage. However, questioning the analysis result, a researcher proposed that the Navy reinforce areas where the survived military aircraft were unharmed: cockpit and engine. The mathematician commented that the study didn't consider bombers that had been shot down in the engine or cockpit in their missions, while the majority of aircraft with holes on wings and tail returned home safely. If he hadn't detected the fallacy of the data analysis, the U.S. Army may have wasted a lot of budget due to unnecessary schemes and more fighter pilots could be killed. It's a form of selection bias and generally called "Survivorship bias" or "Survival bias".

 

While talking about commercially successful video games with developers, they used to say that they can succeed in attracting users if only they copy the elements which the top-ranked games have. However, failed imitative video games are more numerous than ones well receiving in markets. Of course, I don't mean that those key elements that make a game successful are bad or wrong. But if developers make the mistake of hasty generalization that some elements determine the success of the game, biased data is more likely to lead them toward the wrong directions. There are dozens of reasons that a successful game is loved by customers, whereas that could be the only way that a failed game is shunned by users.

 

Mentioning successful mobile-version games—Lineage series, TERA, Yulgang, and Fate/stay the night, etc.—based on well-known originals, quite a lot of people say that a mobile game built on the famous original must have achieved popularity and high profit. However, despite a notable original, I've seen a messed-up game with the poor outcome a hundred times. Game users' love of the latest successful games is not because they are constructed on well-made original works but because it just so happens that they are based on the originals.

 

Let's go back to the beginning of this article. "Survival bias" is a mistake that anybody can make. We need to look at the data from multiple points of view not to go astray. Game makers should see the market in a different direction while lots of uniformly similar-trend video games are released. The only way to reduce the probability of failure is that those game developers take a closer look at whether they have missed an element of success among excluded factors or they haven't found it yet. I hope that as many as game developers can return safely from the fierce battlefield for success.

 

※ This is from Kyunghyang Games column by 泥中蟠龍 since September 2013.

(http://www.khgames.co.kr)

 

Translation by Kim Ki-hui

 

泥中蟠龍's Game愛歌 [A love song for games of the dragon waiting for an opportunity] The founder and the owner

泥中蟠龍's Game愛歌

[A love song for games of the dragon waiting for an opportunity]

 

The founder and the owner

 

November. 30. 2017.

Recently, I heard of a painful story from the CEO of an investment firm. To sums up,

 

“Why do most chief executive officers are the majority shareholder in the video game companies and keep holding it since the firm received investment several times? Why don't they evenly divide profits with the founding members? I think there seems to be an issue."

 

As the introduction says, I worked extensively with video game development and I'm now working with investment in game studios. An investor who provides capital to start-ups showing high growth potential is called a "venture capitalist (VC)". Among them, the number of VCs that specializes in investing in game development is not significant. Therefore, I have been given a chance often to deliver a lecture on things that a game company needs to prepare to attract investment such as the process of attracting and writing up a business plan, etc. I used to say that the higher the stakes of the CEO, the better the win situation for attracting investment. A good few venture capitalists are reluctant to invest in a game developer where the leader owns a considerably low percentage of stock. If a venture-funded business, which wants to attract a follow-up investment after its initial one, has abnormally low CEO stakes, it can be a big hindrance to encourage investors.

 

Apart from that, along with investment firm-related problems, not only the CEO but also ex-VC pointed out that most successful entrepreneurs in the local gaming industry have tended to be tight-fisted to share money with employees and to think of themselves as not a founder or chief executive officer but an owner or ruler. I also have the experience of running a video game company in the past and I'm not the exception, either. I was at a complete loss for words when I was asked what I have done to change our perception of the industry as one of the venture capitalists who specialize in a video game.

 

The national gaming industry is the engine that drives all the other content industries and there are many listed companies. Every year, a couple of video game firms go public, which makes several persons very rich with about from a few hundred billion won to a few trillion won. A new star in the industry has been born this year and it is also expected to continue next year. However, the more the new rich share in profits, the more the industry will flourish. I hope that the number of would-be entrepreneurs, who make a game they want to create from the experience of the successful developer and its team, more than the number of future CEOs, who want to be the owner of the company from taking a leaf out of the successful owner CEO's book. I should change my perception of a developer where the CEO owns a high percent stake. And I expect that the small change will make a big difference.

 

※ This is from Kyunghyang Games column by 泥中蟠龍 since September 2013.

(http://www.khgames.co.kr)

 

Translation by Kim Ki-hui