9 ms·

As a YC founder turned gamedev, I can tell you that failure is the norm in both pursuits. As with YC, the question is: can we create more outsized outcomes when

by psawaya 9mo ago

As a YC founder turned gamedev, I can tell you that failure is the norm in both pursuits. As with YC, the question is: can we create more outsized outcomes when we succeed?

daedrdev 9mo ago
Great point, I think I'm just being overly pessimistic Related, I find it interesting is that gacha games seem to ahve the highest possible returns but almost none are made by western game companies.
- dpoloncsak 9mo ago
  Aren't games like CSGO, FIFA, and Overwatch almost exclusively run on gacha-profits?
  - jsheard 9mo ago
    Yes they are. The implementation tends to differ from how eastern-developed gacha games work, but they're making billions from virtual slot machines nonetheless.
    - dpoloncsak 9mo ago
      Yeah, I still indulge in video games, and understand that on the surface CSGO skins feel different than Genshin summons, but from 100 feet up it's all the same crap, imo I do kinda get what you mean, though. Gacha mechanics feel expected in anything western, while 'loot boxes' are still a 'feature' of some games in the east. Eastern studios have definitely noticed, though, and are running the same playbook.
      - dpoloncsak 8mo ago
        ...I think I mixed up East and West oops
  - modwilliam 9mo ago
    Overwatch is not
    - dpoloncsak 9mo ago
      Didn't they bring back loot boxes?
      - deleted 9mo ago
        [deleted]
      - modwilliam 9mo ago
        Yes, but you basically can't pay for them. Revenue is basically all from direct cosmetic sales or the battle passes
        dpoloncsak 9mo ago
        I see. You can remove 'Overwatch' from my original comment and the point still stands, but I do appreciate the fact check. I know Blizzard from HearthStone and Diablo....not great experiences with gacha there haha (Diablo Immortal, atleast), but those are far from the most popular Eastern games
        fwip 8mo ago
        The battle pass contains loot boxes though, right?
        modwilliam 8mo ago
        Yes
  - spacemarine1 9mo ago
    I think it is possible to be successful in games without being predatory. Humble Bundle was a demonstration of that. I don’t believe that ultra-predatory mechanics are long-term sustainable. They usually yield a “ring of fire” effect that creates a growing ring of users for a while but really you’re burning out all your core users and will implode. This is how many describe the original Zynga model. Supercell (founded around the same time) has cultivated longterm ecosystems and IP by respecting their players. EGG takes a similar long-term perspective.
    - YetAnotherNick 9mo ago
      [flagged]
      - Loughla 8mo ago
        It's successful in my opinion by offering really good value with fair practices. It's not a secret, I think.
      - bigstrat2003 8mo ago
        If you don't consider tens of millions of dollars in revenue a success, your definition of "success" is completely out of whack.
        Espressosaurus 8mo ago
        It’s not successful for a VC. VCs are looking for the billion dollar exit. 10s of millions is 100-1000x off what they look for
        YetAnotherNick 8mo ago
        Depends on development cost, no? If game development costs 10s to 100s of millions of dollars, 10 million in revenue is a failure.
    - dpoloncsak 8mo ago
      >I don’t believe that ultra-predatory mechanics are long-term sustainable I don't think they're trying to be. I think they're whale hunting, find a few high spenders, and milk them for all they're worth. Then they spin up a new IP (or license one out), rinse and repeat
- trueismywork 9mo ago
  You're right though. Industrial software/hardware in general always has money in all times. But gaming is essentially entertainment and people only spend on entertainment last. So gaming industry has a lot of failure but even if you're successful in a huge way, you won't earn huge money. There's a big cap there.
  - awkward 9mo ago
    Games are a zero marginal cost industry driven by hits. The cap is pretty high. The floor is what you should be worried about.
- chrisweekly 8mo ago
  FTR, A "gacha" game is a video game that uses randomized rewards and in-game currency to encourage players to spend money or time. (Sharing to help others bc I had to look it up.)
Analemma_ 9mo ago
I don't think that's possible and frankly I'd much prefer capital not even try. To the best of my knowledge, the only games which generate the really outsized outcomes you'd need for a VC portfolio do really gross, anti-player shit (gacha, lootboxes, whale fishing, etc.) to get it. Or they become distribution monopolies like Valve, which is fine-ish when Valve is private but would be a ongoing catastrophe if it had been VC-funded. I'd rather not encourage that.
- mikepurvis 9mo ago
  I agree. I'm not the moral police, but video games ultimately have to walk a line where they serve up entertainment that is engaging/addictive without being all-consuming and abusive, and do so for an amount of money for which there is general consensus is "reasonable". Trying to ride that to the moon is a very different proposition from a B2B play where you sell some service that concretelt delivers $X/mo recurring value to each customer for a $Y/mo price tag, and X > Y, but Y - your costs still turns a healthy profit. If you do that right, everyone is winning and the economy as a whole grows, not at all the same as the zero-sum game that is soaking a few whales and ruining their lives.
- 7777777phil 9mo ago
  I appreciate this perspective.. but I think there might be a false dichotomy here. Some of the biggest gaming success stories didn't rely on exploitative mechanics - Minecraft, Among Us, even Fortnite's initial success was based on solid gameplay before the monetization kicked in. The question is whether you can build sustainable platforms that create genuine value rather than just extracting it. Steam takes 30% but provides real distribution value. Maybe the trick is focusing on companies that help other developers succeed rather than trying to create the next Genshin Impact
  - jsheard 9mo ago
    > Fortnite's initial success was based on solid gameplay before the monetization kicked in. Fortnite is a bit of weird backwards example because the early PvE iteration had paid lootboxes, but they were scrapped in the Battle Royale spinoff which actually got popular, and eventually removed altogether. They still do things like engineering FOMO to drive sales but ironically the games monetization was the most exploitative when nobody was playing it. But now the siren song of lootboxes is calling to them once again... https://kotaku.com/fortnite-loot-boxes-gambling-roblox-2000642980 https://kotaku.com/fortnite-loot-boxes-gambling-roblox-20006...

by psawaya 9mo ago

As a YC founder turned gamedev, I can tell you that failure is the norm in both pursuits. As with YC, the question is: can we create more outsized outcomes when we succeed?

daedrdev 9mo ago

Great point, I think I'm just being overly pessimistic Related, I find it interesting is that gacha games seem to ahve the highest possible returns but almost none are made by western game companies.

dpoloncsak 9mo ago
Aren't games like CSGO, FIFA, and Overwatch almost exclusively run on gacha-profits?
- jsheard 9mo ago
  Yes they are. The implementation tends to differ from how eastern-developed gacha games work, but they're making billions from virtual slot machines nonetheless.
  - dpoloncsak 9mo ago
    Yeah, I still indulge in video games, and understand that on the surface CSGO skins feel different than Genshin summons, but from 100 feet up it's all the same crap, imo I do kinda get what you mean, though. Gacha mechanics feel expected in anything western, while 'loot boxes' are still a 'feature' of some games in the east. Eastern studios have definitely noticed, though, and are running the same playbook.
    - dpoloncsak 8mo ago
      ...I think I mixed up East and West oops
- modwilliam 9mo ago
  Overwatch is not
  - dpoloncsak 9mo ago
    Didn't they bring back loot boxes?
    - deleted 9mo ago
      [deleted]
    - modwilliam 9mo ago
      Yes, but you basically can't pay for them. Revenue is basically all from direct cosmetic sales or the battle passes
      - dpoloncsak 9mo ago
        I see. You can remove 'Overwatch' from my original comment and the point still stands, but I do appreciate the fact check. I know Blizzard from HearthStone and Diablo....not great experiences with gacha there haha (Diablo Immortal, atleast), but those are far from the most popular Eastern games
      - fwip 8mo ago
        The battle pass contains loot boxes though, right?
        modwilliam 8mo ago
        Yes
- spacemarine1 9mo ago
  I think it is possible to be successful in games without being predatory. Humble Bundle was a demonstration of that. I don’t believe that ultra-predatory mechanics are long-term sustainable. They usually yield a “ring of fire” effect that creates a growing ring of users for a while but really you’re burning out all your core users and will implode. This is how many describe the original Zynga model. Supercell (founded around the same time) has cultivated longterm ecosystems and IP by respecting their players. EGG takes a similar long-term perspective.
  - YetAnotherNick 9mo ago
    [flagged]
    - Loughla 8mo ago
      It's successful in my opinion by offering really good value with fair practices. It's not a secret, I think.
    - bigstrat2003 8mo ago
      If you don't consider tens of millions of dollars in revenue a success, your definition of "success" is completely out of whack.
      - Espressosaurus 8mo ago
        It’s not successful for a VC. VCs are looking for the billion dollar exit. 10s of millions is 100-1000x off what they look for
      - YetAnotherNick 8mo ago
        Depends on development cost, no? If game development costs 10s to 100s of millions of dollars, 10 million in revenue is a failure.
  - dpoloncsak 8mo ago
    >I don’t believe that ultra-predatory mechanics are long-term sustainable I don't think they're trying to be. I think they're whale hunting, find a few high spenders, and milk them for all they're worth. Then they spin up a new IP (or license one out), rinse and repeat
trueismywork 9mo ago
You're right though. Industrial software/hardware in general always has money in all times. But gaming is essentially entertainment and people only spend on entertainment last. So gaming industry has a lot of failure but even if you're successful in a huge way, you won't earn huge money. There's a big cap there.
- awkward 9mo ago
  Games are a zero marginal cost industry driven by hits. The cap is pretty high. The floor is what you should be worried about.
chrisweekly 8mo ago
FTR, A "gacha" game is a video game that uses randomized rewards and in-game currency to encourage players to spend money or time. (Sharing to help others bc I had to look it up.)

Analemma_ 9mo ago

I don't think that's possible and frankly I'd much prefer capital not even try. To the best of my knowledge, the only games which generate the really outsized outcomes you'd need for a VC portfolio do really gross, anti-player shit (gacha, lootboxes, whale fishing, etc.) to get it. Or they become distribution monopolies like Valve, which is fine-ish when Valve is private but would be a ongoing catastrophe if it had been VC-funded. I'd rather not encourage that.

mikepurvis 9mo ago
I agree. I'm not the moral police, but video games ultimately have to walk a line where they serve up entertainment that is engaging/addictive without being all-consuming and abusive, and do so for an amount of money for which there is general consensus is "reasonable". Trying to ride that to the moon is a very different proposition from a B2B play where you sell some service that concretelt delivers $X/mo recurring value to each customer for a $Y/mo price tag, and X > Y, but Y - your costs still turns a healthy profit. If you do that right, everyone is winning and the economy as a whole grows, not at all the same as the zero-sum game that is soaking a few whales and ruining their lives.
7777777phil 9mo ago
I appreciate this perspective.. but I think there might be a false dichotomy here. Some of the biggest gaming success stories didn't rely on exploitative mechanics - Minecraft, Among Us, even Fortnite's initial success was based on solid gameplay before the monetization kicked in. The question is whether you can build sustainable platforms that create genuine value rather than just extracting it. Steam takes 30% but provides real distribution value. Maybe the trick is focusing on companies that help other developers succeed rather than trying to create the next Genshin Impact
- jsheard 9mo ago
  > Fortnite's initial success was based on solid gameplay before the monetization kicked in. Fortnite is a bit of weird backwards example because the early PvE iteration had paid lootboxes, but they were scrapped in the Battle Royale spinoff which actually got popular, and eventually removed altogether. They still do things like engineering FOMO to drive sales but ironically the games monetization was the most exploitative when nobody was playing it. But now the siren song of lootboxes is calling to them once again... https://kotaku.com/fortnite-loot-boxes-gambling-roblox-2000642980 https://kotaku.com/fortnite-loot-boxes-gambling-roblox-20006...