Heroes and Zeroes–were my 2011 predictions right?

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At the London Games Conference 2011, I was asked to predict 4 heroes and four zeroes in an era of digital transition. With LGC 2012 just round the corner, where I am going to come up with 8 new heroes and zeros, how did my predictions fare?

(LGC has a voting mechanism in the auditorium, so delegates were able to vote whether they agreed with me. It made the event much more entertaining. We had people laugh out loud. It was actually fun. Who’d have thought it)

Zero 1: Zynga

Wow, did I call this one right. I’ve been a big fan of Zynga for a long time, but late 2011 seemed like a peak moment for me. Facebook changes revealed that each month, 20 million people were being drawn to the Cityville page by marketing and virality, but refusing to install the app. Monetisation was getting increasingly cynical, and I argued that the future of free-to-play games was about making true fans love what you do, not using psychological tricks to drive “whale” behaviour.

In 2012, Zynga floated, raised $1.6 billion, but since that moment, its share price has collapsed such that Zynga is now worth less than its cash and property. You can’t count any company with $1.6 billion in cash as out, but I would definitely say that in 2012 Zynga was a zero.

+1 to Nicholas

Hero 1: PlayStation Home

I tried to persuade the LGC audience that PlayStation Home was Sony’s unsung free-to-play platform. It offers a virtual world with an integrated billing platform, a committed community and a mechanism for developers such as nDreams (where I am a non-executive director) and Lockwood to make interesting games and virtual items. However, it is only a subset of the PS3 community and in 2012, there have not been enough break out activity.

The audience didn’t agree with me in November 2011, and I fear that they were right.

-1 to Nicholas puts me back to zero.

Hero 2: Nimblebit

Anyone who reads GAMESbrief will know that I am a big fan of Nimblebits games. Pocket Frogs kept my wife enthralled for hours. I finished Tiny Tower and have loved Pocket Planes. In 2011, I declared Nimblebit. Apple declared Tiny Tower one of the games of the year of 2011, and in 2012, Nimblebit launched Pocket Planes, a successful, more complex, top grossing game.

I called this one right, and the audience agreed. +1 to me give a running total of +1

Zero 2: Subscription MMOs

“Subscription MMOs are over,” I declared. They cap your revenue, put a paywall between you and your audience and make it harder to reach enough users to make a dedicated community. Although Rift launched well, The Old Republic tried and failed to sustain a business.

I declared a zero. So did the audience by a hair thin margin (49% hero; 51% zero). +2 to Nicholas

Zero 3: Handhelds

OK, so handhelds haven’t been completely killed by the mobile or smartphone yet, but it’s coming. Nintendo had to cut the price of the 3DS to below cost for the first time in its history. The Vita is DOA.

82% of the audience agreed with me. +3 to the analyst.

Hero 3: Gaikai

I was no believer in OnLive. I put OnLive in my 10 games business that are doomed, so the LGC audience might have been surprised when I put Gaikai as a hero. I liked Dave Perry’s iterative approach to finding a business model, the absence of the hubris that characterised OnLive and the clear commercial potential that Gaikai was already showing as a marketing tool, before it became a consumer proposition.

60 per cent. of the audience were persuaded, and so was Sony, which paid $380 million for Gaikai in July 2012.

I don’t think you can be much more of a hero than that. +4 to me.

Zero 4: THQ

I thought this was going to be controversial, especially to an audience with several traditional publishers in the room, including senior execs from THQ. I argued that the market was polarising and there was no room for a middle size publisher. 77% of the audience agreed.

THQ is still around, but has been punished by the market. The stock is down 80%, while the Dow is up. Just look at the chart below.

The market agrees with me. +5

Hero 4: Amazon

Amazon changed the way we bought books. Then everything else. Then how we read books with the Kindle. Then how we ran startups with Amazon Web Services. Then launched the first major challenger to the iPad in the Kindle Fire.

Amazon may still have problems: its profitability is still challenged, its margins are thin and it has taken major write-offs to some expensive acquisitions. But it is still the company that is changing the way we do business faster than anyone except perhaps Apple.

I’m claiming this as a win.

The results are in

Of my 8 forecasts, 7 were right, some spectacularly. Gaikai’s acquisition and Zynga’s fall from grace particularly. My hope for PlayStation Home let me down, and with my scoring system punishing heavily for a mistake, my final score is +6.

The audience did better. They weren’t convinced by my PlayStation Home arguments, which mean the LGC audience got a clean sweep. They accurately predicted every single one of the Heroes and Zeroes in 2012.

Come along to London Games Conference 2012 and see if you can help the audience keep their perfect score.

(You can also see how well my predictions for 10 games business that are doomed, made in 2010, fared in 2012).

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