Show Me: What Does A Successful Product Launch Look Like In 2018?Aidan HornsbyLast Updated: October 15, 2018
Flow helps teams get work done. In our “Show Me” series, we profile the people, companies and teams successfully building and marketing products right now.
At first glance, the boom-and-bust world of mobile games doesn’t seem like the best place to learn about bringing a product to market. In a world where multimillion dollar budgets flop regularly and hits seem to come out of nowhere, building and selling a successful video game can feel more like a crapshoot than marketing.
But A Thinking Ape (”ATA” for short) isn’t your traditional game studio. And it’s not a traditional software company either. In fact, the company defies categorization in almost everything it does.
Ten years ago, it was one of the first Canadian companies to graduate from Paul Graham’s prestigious Y Combinator startup accelerator. But when it came time to choose a home, the company left Silicon Valley and set up shop in beautiful Vancouver, British Columbia instead.
While other studios seem to be at the mercy of the marketplace, churning out bad sequels and hiring and firing employees depending on the success of their latest hit game, ATA has taken a more sober approach, steadily growing to more than 70 employees while avoiding the hype cycle.
If you ask ATA co-founder and CEO Kenshi Arasaki what he thinks the key to launching a successful mobile game is, he’ll be first to admit that he hasn’t cracked the code yet.
“I think we’ve probably made every mistake in the book when it comes to launching games,” Arasaki told us.
“Every time we launch one, we learn a lot.”
Lesson #1: Avoid becoming fragile
Arasaki says that ATA’s slow and steady approach is designed to avoid one of the biggest threats to any successful games company: fragility.
“The boom and bust cycle can be very, very fragile. What I mean by that is: let’s say you have a really small scrappy team that creates a hit game, it goes to the top of the charts, and it generates lots of revenue.“
“Typically, what studios do at that point is they go, ‘Wow, we’re making more money with no budget: let’s greatly expand the teams and we can make an even bigger game!’ And they hire like crazy, they rapidly expand the budget by an order of magnitude or more, and now they have this world-class, gigantic operation going.”
Arasaki says that huge budgets, far from helping teams build on past successes, actually hinder them by forcing them to take fewer risks.
“You get these companies that have this gigantic team and budget, and now they’re scared, because launching a game becomes a huge risk. They can’t trial something completely new or something crazy, because if it fails, it’s a huge hit to the company. It might even bankrupt them.“
And if bloated budgets and teams don’t bankrupt the company, Arasaki says they can do something even worse: force them to start making boring games.
“Instead of being optimized for building completely new things, they become optimized for trying to guarantee that there’s less downside in releasing a new game.“
“That’s when you become like EA Games, and you start doing Madden 2014, Madden 2015, etc.“
Lesson #2: Accept that nothing is guaranteed
One reason why big budgets hinder studios more than help them, according to Arasaki, is because games don’t work like traditional software.
“The problem is that in games, because it’s such a creative endeavour, nothing is guaranteed.”
“You can’t have that slow and steady incremental growth, building upon past successes, as you can with say traditional software. If you’re trying something new creatively, no matter what your budget is, it may or may not work.”
Instead of brute forcing their way to another hit game, Arasaki points out that the most successful studios today seem to embrace the spontaneous, even chaotic nature of games development.
“This is why you see a completely new trend show up games every few years. You have games like Fortnite, PUBG, Pokémon Go—every year someone comes along and shows everyone else that, hey there’s a completely new genre of game that can be really successful. Or that there are levels of success even within existing genres that weren’t possible before.”
Lesson #3: Keep things small
As ATA has grown, instead of increasing the size of their teams, they’ve gone in the opposite direction: they’ve gotten smaller.
“We’re in the process of starting a new game right now, and the team is going to start with two people,” Arasaki tells us.
Yes, you read that correctly: two people. For Arasaki, the smaller the teams, the more likely they are to take risks, take a chance on creative new ideas, and deliver ATA its next hit game.
“At ATA, we try to keep the teams quite small, because we realized that even if a team has a massively successful game, past performance is no indication of future success. Especially in games.”
“We give the teams complete ownership, they’re completely decentralized, and they can create their own culture and their own processes so that they’re not afraid to try new things.”
For Arasaki, ATA’s success will depend on its ability to keep things small, and to maintain a culture of experimentation that often eludes much bigger studios.
“Our vision is to get to a point where we have lots of tiny teams just creating all these prototypes of things that may or may not work. If they don’t work, it’s not a big deal, because it’s a small team and the cost and risk to us isn’t that large. And if it does work, we can double down on it.”
Lesson #4: Be picky
When you’re launching an app or game, you want it to rank highest in its category on sites like iTunes and Product Hunt, right?
Not so fast.
While other studios might depend on hits and the hype cycle to make money, ATA has taken a pickier, more data-focused approach.
“Because we have such good per-unit economics in terms of how our users monetize on a per user level, we control our app store ranking,” Arasaki told AdWeek in 2011.
“That’s why you never see Kingdoms at War at the top of the top grossing list, but we keep it on top of our sub-category… As you go up in ranks you get more users, but the quality goes down. We figured out where we need to be in the app store to have the highest ROI per user.”
This approach might seem counterintuitive, but it’s paid off for ATA in a big way. At one point, the company publicly reported revenues of 46 cents per daily active user. Arasaki says that for their newest game, Kingdoms of Heckfire, it’s even higher.
The industry average? 4 to 6 cents.
Lesson #5: Look inward
If you ask Arasaki how his company manages to avoid all of the bad habits of its competitors, he’ll tell you it’s the product of a long and painful process of self-reflection.
“Pain + Reflection = Progress,” Arasaki tells us, quoting the famous American investor Ray Dalio.
“We do a lot of introspection in terms of how we can improve things at the company. For example, one of ATA’s core values is ‘have wonderful arguments.’ We’re pretty candid each other, and that’s led to this really great cycle of self-improvement, not just for the leadership team personally, but for the company as a whole.”
‘Radical candor’ has become a bit of a buzzword, especially since the publication of Dalio’s Principles last year. But talking to Arasaki, you get the sense that ATA really does live and breathe by this philosophy.
“I think a large part of that cycle of continuous self-improvement means being able to very clearly articulate what your goals are for the future, in a meaningful way, one that’s meaningful to yourself.”
“In general, that process tends to be quite inward-facing, rather than something that’s processed by people externally. That might be one of the reasons that we maybe aren’t as well known as other studios: because we’re not just trying to follow a trend in terms of where games are going.”
For Arasaki, successfully launching a new game often has less to do with ATA’s competitors than it does with ATA itself, and finding ways to improve what it’s already doing right.
“It’s like that sports analogy: ‘Your biggest opponent isn’t your opponent. It’s yourself.’ I think what we’re always trying to beat is our past selves, not some other company.”
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