Game reruns: How RockYou's 'life beyond the megahit' strategy works

RockYou CEO Lisa Marino talks about the company's strategy for rescuing social games -- so far, from Playdom and Digital Chocolate -- that are past their prime, and running them profitably.
In April, RockYou made an interesting announcement: It was taking over operations for some social games that their original operators were planning to shut down. In the case of several Playdom games -- including the onetime powerhouse Gardens of Time -- it was buying them outright from its original developer/publisher. In the case of both the Playdom games and also titles from Digital Chocolate that RockYou licensed rather than purchased, the company also brought developers from the original studios on board to continue to run the games. Marino likened the move to running a cable network that takes once-popular shows from other channels and repeats them them for an audience of fans. Sure, you won't end up making The Sopranos that way, but you're still serving its audience -- and making money. These games were once hits and still had dedicated fan bases, but the companies that had created them were ready to move on. RockYou CEO Lisa Marino reckoned her company had what it takes to make a success where other companies saw only failure -- and, as this new Q&A reveals, she confirms that to be the case. To find out more about this strategy, Gamasutra spoke to Marino about it -- and asked her how things have gone since the company transitioned the titles over.

How do you determine which games are "worth it" and which are not?

Typically, we look at games that are running a profit (but flat or even slightly declining P&L), have a stable user base consisting of 75K+ U.S. DAU, and under-monetized from an ads perspective.

How did you hit on this new business model?

We didn't necessarily stumble upon this model. Advertising, and more importantly, making ads a key/core component of gameplay, is something that has always been part of our philosophy. As more and more gaming companies are moving off .coms and/or Facebook and on to mobile or other platforms, many titles are being sunsetted, and many very loyal players are being left behind.
"Many titles are being sunsetted, and many very loyal players are being left behind."
Having operated as a game developer, we know how passionate players are about these games, and by implementing what we are best at -- in-game video ad delivery mechanisms -- we are able to keep operating, updating, and offering continued gameplay to users for years to come.

The Digital Chocolate games are licensed and the Playdom games are acquisitions. Does either model have pros or cons? Is there one you prefer?

There really is no preference from our perspective. For us, it is much more about the quality of the title(s) and its user base.

Why are these games viable for you, if they aren't viable for the companies that originally produced them?

In most cases, revenue/profitability has either flat-lined or started to decline on a lot of these titles. There are only so many potential users/players any game can attract. With only 2 percent of the player base typically monetizing, the opportunity to grow, and continue to do so at scale, becomes increasingly more difficult for game developers.
"With only 2 percent of the player base typically monetizing, the opportunity to grow, and continue to do so at scale, becomes increasingly more difficult for game developers."
This is something that RockYou recognized very early, back when we developed our Deal of the Day ad placement in 2009, which was the original incentivized ad product in social gaming. Knowing how to introduce ads as a key component and integrating them into the core loop of a game is something we have become very good at. What has allowed us to do this is having very successful owned and operated properties like Zoo World, which is five years old and still very profitable on a small but very loyal user base. Basically, there are really three things that allow us to run these games successfully, where others may see them as "past their prime": 1) We are able to grow revenue because of our strength in ads, 2) We have become very proficient at operating games in a low-cost environment and 3) We have a very scalable infrastructure (low server costs, QA/CS teams that cover multiple titles, etc.)

You use the metaphor of "reruns" which I think is apt. As I understand it, your goal is to get games that have dedicated followings already, correct?

Yes. We are not currently spending to necessarily grow the titles with new users, but rather, to make sure we provide the highest level of service, updates, content releases, etc. for the existing player base. By introducing ads and increasing the game's monetization, we are able to keep the games in operation longer, and provide premium content for loyal players. (Rather than these titles being sunsetted, as when the current developers in some cases shift focus.)

Where the metaphor breaks down a bit is that you end up employing developers yourself to continue the game services. Would you have to bring on developers from every game you acquire?

This is usually dependent on the developer partner we are in conversations with. If they are willing to part with the games team, we will then go in and make offers to those we deem as critical to the continued operation of the title(s). In some instances, that is the entire team, in others it is a portion of the team, and still in others, there is no one available as part of the acquisition or licensing deal.

Have the games you've taken on lived up to your expectations, in terms of revenue? Has it changed much, if at all, from what the prior operators were seeing?

In a word, yes, they have behaved just as we had expected/predicted given the projections within of our overall model. We generally have seen increases in revenue, which can be attributed to three main factors: - Increased ad revenue through game mechanic enhancements that drive up unique video views per user per day, without compromising player experience. - Achieved game synergies. Gaming by its nature is a scale-driven business for core infrastructure elements such as IT ops, CS/QA, art and other functions, and we achieve this scale as we add new games into the RockYou portfolio. Our ability to have teams work on multiple titles simultaneously also augments our scale. - Finally, achieved cost savings via migrating everything to RockYou’s colo/data center, thus achieving cost reduction and further overall profitability for each game's P&L.

Has the transition in operations been as smooth as you anticipated for the games and for their teams?

Of course not. Every game is a snowflake in terms of team size, dynamic, game infrastructure, and goals. We are experts at being able to adapt titles from all different set ups to the RockYou model.

What kind of response have you seen from the players so far? Have they been appreciative? Have they stuck around?

"On top of this, we are seeing other player communities reach out to us regarding their games requesting that RockYou consider taking over these titles to prolong the game's life."
The response from players has been fantastic to say the least, and not only from the communities within the titles we have acquired/licensed. Player forums and individual CS tickets have come in by the hundreds thanking RockYou for extending the life of the games they have come to play and love over the last two, three, or four years and beyond. On top of this, we are seeing other player communities reach out to us regarding their games (after being messaged that these games will be sunsetted), requesting that RockYou consider taking over these titles to prolong the game's life. These player communities are so heavily invested and engaged in their games that many have made close friendships within these communities and are not ready to let them go. This was our theory all along, and it is this type of feedback that not only proves our model, but truly benefits all parties, both RockYou and the original developers, but most importantly the player communities themselves.

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