If you click on a link and make a purchase we may receive a small commission. Read our editorial policy.

Kixeye's War Commander

CEO Will Harbin on capturing the Facebook core gamer, VC investment and the myth of the social bubble

GamesIndustry.biz The remarkable thing about social games from my point of view is that they've actually taught people the very rudiments of playing an isometric strategy game, which has always been a hardcore genre. There's an enormous amount of opportunity for people to create games for those people.
Will Harbin

Of course, my favourite game of all time is Command & Conquer: Red Alert, and I'm very proud of the fact that I think we're having a major hand in reviving the isometric RTS genre and kind of furthering the genre. Battle Pirates, to my knowledge, is the first true MMO RTS out there in terms of persistence, synchronous [gameplay], etc.

And that again is in keeping with our hiring strategy. The common story I hear when I'm talking to people that are coming from, let's say, Playdom or Zynga, and are coming and thinking about [joining] with us, they're like, "Well, I'd much rather on games that I want to play" and then I think that the differentiator between us and... and we hire a lot of people from Activison and EA as well, and we could launch four games or more in the time that it would take one of those guys to launch one game. I think we hired a guy last week who was working on a title, he'd been working on a title for three years and it's still not even close to being launched, and our company's not even three years old. So it's about shipping product and it's about making games you want to play.

Our philosophy is you don't have to spend to spend $40 million to make a great game. I have criticisms about both the AAA game developer and the mass marketed casual game developer. On one end of the spectrum with the AAA developer they're spending $40 million and I'd say 39 of those $40 million are being spent on things that don't necessarily add to the gamer's delight. I'd definitely apply the 80/20 rule to something like that. And I think you can just be more efficient about delivering a delightful quality experience to the user than what they've done.

Don't get me wrong, I love playing those games, but it's like kind of going to a huge blockbuster movie on the IMAX - to get that experience, to get the core of that experience, you don't necessarily have to go to those lengths.

We resonate with people who have gripes about both ends of the spectrum and we kind of sit right in the middle. We deliver great games and we do it in a good timeline and from a cost effective business model.

GamesIndustry.biz Having that agility within the work environment must be a great lure?
Will Harbin

One thing I've noticed is when they're working on these three year dev cycles and and these large teams, you've got these very talented engineers working on a tiny, tiny little piece of the game and they're just so narrowly focused. And with us we work on teams, total games teams, of like five to fifteen people. So if you're an engineer that comes on to one of our game teams you're working on a big piece of the game. I mean, you might be responsible for half the client facing stuff, so that's another big proposition. We like to challenge people.

GamesIndustry.biz Is there still a lot social investment out there from venture capitalists? Because obviously your position is one of success, but a disruptive kind of success that VCs really enjoy. Do you get the picture that it's still a healthy market in general?
Will Harbin

There's many parts to this answer. One, there's many tiers of venture capitalists and investors, so first I'll focus on what I'm seeing in Silicon Valley, the top-tier investors. I think it's never changed with the top tier investors, they typically invest in markets and teams. Typically, proven teams in proven markets, that's the winning strategy. I think this is absolutely a proven market, but it's not that much different from any other market in which it's hard to compete. It's crowded, people are kind of chasing the same thing, so I don't think there's anything that magic about this market relative to other markets. You can roughly get kind of the same success rate of companies in this market and others, so I don't think there's anything that special about the online browser gaming market. Other than it's a bit disruptive to the traditional gaming market because this is so accessible. And that's true of most new markets we see, usually the differentiations are in accessibility.

AAA developers are spending $40 million and I'd say 39 of those $40 million are being spent on things that don't necessarily add to the gamer's delight. I'd apply the 80/20 rule to something like that

So that being said, I don't think the top-tier VCs are rushing to seed unproven teams in this space, the only people that we're seeing that are going to get early funding in a big way are people like Greg Richardson from Rumble. Our differentiation was I'd started a few companies before and I was leveraging investors I've used in the past and they already trusted me.

But if you're coming in with just a business plan and you've made a couple of casual games without a lot of success you're not going to get any funding. You really have to prove it. You've got to come in and prove your model and really you're only going to get money to scale your business. You're not going to come and be able to just raise a bunch of money and just start a business from scratch if you haven't done it before and you haven't done it in this space. In that respect it's the same as any other market that venture capitalists are looking at.

I would say there is a different segment of investors spread across the globe who are looking to follow on other successful investments, and they might have a higher tolerance for risk. I can't really comment because I've never taken money outside of Silicon Valley, but I'm sure it's easier to find money in different places.

But for us and with classic Silicon Valley VC, the criteria for a social gaming company is no different from any other company that they're invested in. They analyse the market, they analyse the team, and if things look good they rate it a scale, they give them money. There's not an influx of early stage money into the gaming market from Silicon Valley.

GamesIndustry.biz The press has suggested there's been a bit of a bubble around the social space and it's due to burst sometime in the near future. Kabam, they got $85 million dollars in series D funding, and that struck me as a potential example of that.
Will Harbin

You have to have your ear to the ground to kind of understand what's going on in our neighbourhood. With Kabam, specifically, they've never been profitable and they've done two rounds of lay offs, so I'd say the bubble for them is absolutely going to burst.

But other than that I don't think that there is really a big bubble to burst. There aren't a lot of inflated companies out there. For the most part, most of us are profitable. I mean any company that's driving real dollars to the bottom line and delivering a quality product to the user in a thoughtful manner, there is no bubble to burst. I think there absolutely was a funding bubble, maybe two years ago lots of people were getting funding and failed, and I think the bubble slowly deflated rather than kind of had a big pop.

We have found it a lot easier to hire, I don't know if that's because we're doing a better job or maybe others aren't doing as well, maybe it's a little bit of both. But I don't think we're ever going to see any kind of a pop because it's a successful market. I mean it's got hundreds of millions of users playing, spending money and its just millions of consumers voting with their wallets. This is just an experience that they love, so it's very different from past bubbles before. Bubbles are usually caused by investor hype and industry hype, this is not being caused by any external hype, it's our internal hype. It's all external interest from the consumer and its really hard to say that there's a bubble when it's driven by consumer interest.

Sure, there are lots of companies out there that have spun themselves via PR that leads others to believe that they're more successful than they actually are, and I think the day is coming for those companies just like in any other industry, but for the most part this is simply just a new platform for an existing industry. This is still the games industry; 80 per cent of our employees have been in gaming for a long time, so it's not some brand new industry. It's the same industry, it's just a much more cost effective and accessible platform.

GamesIndustry.biz I got the impression over the last few months that this belief in a bubble, or at least that things have been somewhat inflated, has been down to two companies: Playdom and its acquisition by Disney, and Zynga's market performnace since its IPO. Do you see all this as a flash in the pan?
Will Harbin

Yeah, I do. Even though some would consider Zynga's IPO to be lacklustre, I think Zynga's really going to be a happy surprise over the next year in the public market. Personally, I would rate Zynga's stock as a big buy. I think it's a well run company, I think they've got a lot of smart people over there, and they've got a stranglehold on their specific market, which I think is the mass-market casual social game, and they're driving major collars to their bottom line. I mean, that company is enormously profitable.

From a relatively unsophisticated investor's point of view, over the last couple of quarters when you saw their books it looked like they weren't that profitable, but you have to dig through the numbers and realise that they were just making a lot of big investments in themselves. If they wanted to be more profitable they could. And they will be, and I think Zynga's going to surprise a lot of people. It's going to be a huge success.

In terms of Playdom and the acquisition by Disney, I just don't think it was a very smart acquisition on Disney's part. And most people were saying that when Disney acquired Playdom. It just was not a smart acquisition. There's a lot of manufactured success there from what I understand, and I don't think anybody in the industry is surprised that Playdom isn't doing well for Disney.

But I do think it's unfortunate, because it was the first kind of big acquisition for a big public company and a lot of people were watching it and unfortunately it hasn't done that well for Disney, so it has soured people's opinion on the industry. But the good companies are not selling, and that's what I'll say.

GamesIndustry.biz So it seems like the near future of the social space is going be the filling out of the niches with a more diverse array of products and experiences. Is that they way you see it?
Will Harbin

Yeah, I think there's a lot of market opportunity and there's a lot of people like us who are going to take that market opportunity and deliver products. So yeah, I think that's a pretty fair assessment. I don't think... just the way that the core gaming market behaves I don't think we're going to see hundreds of millions of core gamers playing one game online. I think it's going to come from companies who are focused on strategy games and focused on RPG. I think we'll see some interesting first person shooters in the browser this year, just because of new Flash 11 which is a great resource for us. But yeah, generally I think that's a pretty safe assessment, that we will see more players like us that come and fill the niches.

GamesIndustry.biz Can you give me more details on the platform that you've got coming?
Will Harbin

Sure. So obviously Facebook has to balance lots of things. They have to make an open platform, that they're not curating, they have to make it accessible to developers and users alike, they have to have an ad platform, they have to promote across from other applications, and they've got to optimise for a bunch of stuff. It's not only optimised for gaming.

So there's two things that I want to accomplish. One, I want to make the absolute best, cleanest experience for playing a game on your browser - so very clean, no ads, no promotions in your face. Our platform is only going to have a few of our games; in the future maybe a handful of third party games that we pick out and we invite to the platform. It's not going to be open, it'll be highly curated by us.

So one, first and foremost again, just the cleanest, best game experience. No noise, nothing in your face beyond the game. Two, it's simply what it's not - it's not Facebook. We'll hopefully appeal to the users who for some reason or other, rational or not, just refuse to play games on Facebook, and there does seem to be a pretty good number of them. So yeah, it's going to accomplish those two goals for keeping it simple.

GamesIndustry.biz We've been talking trends, is that something you see trending over the next year or so? Companies actively moving away from Facebook? Because, again, I think when you talk about the social space a lot of people just substitute the term Facebook for that.
Will Harbin

I don't think it's any kind of a trend, I think it's just a natural evolution for a company to move to areas in which they didn't start. So we're seeing games that started on Facebook move off of Facebook. We're seeing game companies that maybe started off of Facebook move into Facebook, so case in point... I mean, I don't think we're being that original about this. Kabam is offering games on their own site, and I think the more established players like us are looking for ways to capture more of the market and its the logical next step.

But also you're seeing companies like Bigpoint starting to experiment on Facebook as well. It's obviously been making games kind of similar to ours for a while off of Facebook, and they're trying to find success on Facebook as well. I think it's just kind of a normalisation of the markets, and again if you've started at A you're going to look to B to extend your market. Also some companies started on B and they're looking to A.

So I don't think anyone's leaving Facebook. Facebook's a great platform, it's a great ad platform, it's a great distribution platform, I have no complaints about Facebook whatsoever. I think they're very fair as a partner and it's a great relationship so I'm always going to make sure that relationship is fostered and we continue to have success from Facebook. This is simply just about expansion.

GamesIndustry.biz There's seems to be a lot of opportunity for companies in this general area, to branch out and be present in many more places than just a social network or just a browser window.
Will Harbin

This is really a browser game kind of play. It's not Facebook, it's not our platform, it's just about delivering a quality, hyper accessible experience to the user, and we are super excited at the direction the technology is going towards the browser with the Flash 11 player, and now Unity can export to Flash, and next year we'll see the Unreal Engine supporting Flash - it's great time to be a browser game developer.

But at the same time it's going to be more expensive and it's going to be more effort to develop browser games as technology increases. So I hope it doesn't move too quickly because I do want to still stick to our core values, where we're not spending too much time and energy on extraneous polish and we'll still just focus on the basic game mechanics and just making fun games.

GamesIndustry.biz Do you think console manufacturer's are paying attention to this? What Kixeye does can't really exist there because they're closed systems to a great extent. Do you think this sort of thing is on the minds of Microsoft and Sony?
Will Harbin

Actually I haven't thought about it that much. I mostly just think about the publishers versus the platform makers. They'd be stupid if it's not on their minds, and I don't think they're stupid. I certainly think that they're thinking about it, and I'm sure they're making some plays. That's a tough one, I don't know what they're going to do. Obviously EA's been thinking about it, they've been executing it. Activison has been thinking about it a lot and is on the verge of executing, and so if the console guys aren't trying to think about how to capture this market it's their loss, but I'm sure they're thinking about something and we'll see it soon.

Related topics
Author
Rachel Weber avatar

Rachel Weber

Senior Editor

Rachel Weber has been with GamesIndustry since 2011 and specialises in news-writing and investigative journalism. She has more than five years of consumer experience, having previously worked for Future Publishing in the UK.

Comments