> The lifetime of a company has been getting shorter and shorter for centuries.
Really? Because Apple was founded in 1976 and I'm guessing they aren't going anywhere. Google was founded in 1998 and I don't think they're going anywhere.
Your assertion is really flimsy, and I think based on seeing a large number of mismanaged companies that flare up and die quickly and then concluding this is normal or even unavoidable. While it may be common, that doesn't mean it's what has to happen.
Rovio took their success and drove it into the ground. They absolutely saturated the market, coming out with new Angry Birds games and tie ins almost constantly and flooding store shelves with very low quality (and in my area, often dingy) plush animals, further lowering public perception of their brand.
I'd argue that if Rovio had been more judicious with their successful IP, that public interest in it wouldn't have disappeared so completely.
You seem to be arguing that the fade was unavoidable since Angry Birds is just a game where you launch birds at pigs with a sling shot. But that doesn't mean the follow up games needed to be. Super Mario Bros was just a game where a guy jumps on things. Now I'm not really saying that Angry Birds was necessarily an IP with as much legs as Mario, but I think they burned it down.
Rovio chose the short term, maximum immediate profit path, and now we're seeing the result of that. Zynga did the same thing. When you go all in immediately, and don't think about what is best for your long term, you burn out public interest in whatever you have to offer. When you don't take the time to make what you're putting out compelling, people will start to conclude everything you have to offer is just going to be more of the same. And they'll be sick of it.
This is not the only path available, and asserting that it is just the way things are now is ridiculous.
> Bad example, as Apple almost died back in the 90's.
They did almost die, but that's why it's a great example. Why did they almost die? Because they started shitting out bad products. Why did they turn around? Because they re-evalutaed and looked at the products they were offering and reduced the number of them in order to focus more on those few products.
> Also, using a company founded in 1998 (16 years old) as a counter example to the parent argument who's scope was "centuries" is not ideal.
The scope of "centuries" is a joke. He didn't cite any examples, and "business" in the 1400's isn't really relevant or meaningful in 2014. My examples were to illustrate how absurd his "centuries" comment was by pointing that two of today's largest companies are very young (I haven't done a count but I'd be surprised if any/many of the top 100 companies were much more than one century old.)
It's also selection bias. We tend to remember companies more if their names are still in use.
Borland was founded in 1983. By 2008, the only value left in it was its trademarks. So those were purchased, and now that company "still exists", in the sense that a few of its old names are being used to conduct business in the same industry. It was killed by gross mismanagement at the executive level.
Eastman Kodak was founded in 1888 and practically invented consumer-grade photography with the Brownie. But by 2012, the only thing left of value was its patents and trademarks. It even built a digital camera as early as 1975, which makes it look a lot like it was killed by being run over by its own car. But the trademark is still in use.
Beatrice Foods, founded in 1894, died in 1984. RCA was founded in 1919, and died in 1986. Compaq: 1982-2002. TWA: 1930-2001. General Foods: 1895-1990. MCI: 1983-2006. Pan Am: 1927-1991. Montgomery Ward: 1872-2001. American Motors: 1954-1983. Woolworth's: 1879-1997. Tower Records. Polaroid. Zenith. Circuit City. Borders. Blockbuster Video.
A business will tend to operate under the name of the oldest trademark that it can pass off with a straight face. That doesn't make it the same company. It may be that the new business entity picked up the lovely old facade out of the bargain bin and just slipped it on like a mask.
Make no mistake. Rapidly changing technology has made the international business environment brutal for companies of any age. Protected niches are being pried open and picked clean by the suits who happened to bankroll the lucky garage full of nerds. The fraction of workers that can count on stable, decades-long employment is dropping like a parachute in a vacuum chamber (or like a stone, if you prefer). And those are the people that cause their companies to retain their essential culture and character.
Companies aren't just dying faster. The ones that survive are forced to change so rapidly that actual death might be a less shocking development. It isn't really surprising that Roxio blazed out after its one-hit wonder. What is surprising is that it took so long for them to settle back down to the baseline.
Good point - Apple as we know it was essentially re-founded in 1997 when SJ took over. Wasn't there an almost immediate and total overhaul of their product lines and direction?
I'm a game developer. I'm not sure what I would do if I were to have a huge success. You speak as if it was obvious what they were supposed to have done.
I'm not trying to be a smart ass. I would really like to know what you think Rovio should have done. Hopefully with your advise I'll know what to do if I ever have such a huge success.
I think it boils down to, they're a company that is very good at making games. From a casual outside observer's point of view, they seemed to think they could jump straight into being very good at animation and merchandising. They made, what, 30 or 40 games before angry birds was a hit? They didn't seem to have the same level of commitment to 30 or 40 iterations of animation, or merchandising.
It's fine to expand into new markets, companies do it all the time. You probably don't want to bet the farm on something you're not very very good at though, unless it's threatening your survival. Western union moving from the telegraph to money transfer is a pretty iconic example.
Compare to Mojang (survivor bias warning...) they're still pretty small. I haven't played it, but Scrolls is supposed to be really fun. Haven't heard anything bad about Cobalt either. I was very excited for x10k or whatever the space programming game was. They did a ton of merchandising, but they didn't do it in house (as far as i can tell). They took the check from lego and let the big toy maker do their thing.
Do what you think is best, but even if there's some non-game thing that makes sense, ask yourself if you really want to go head to head with Hasbro or Pixar. Really understand what you're getting yourself into.
Honestly, I think there's something to be said for taking the money and walking away. It's not what any CEO wants to do, and it's probably not what investors want either - but it's management's duty to do what's in the shareholders' best interests, even against the wishes of those same shareholders.
If you've had a one-off hit that you know is a one-off hit, maybe the best thing to do is to sell off sequel/merch rights to the highest bidder or any employees who want to continue, then wind up the company. Of course, that judgement is the hard part. Maybe they really did believe they could continue making games that would be just as big.
> I'm not trying to be a smart ass. I would really like to know what you think Rovio should have done. Hopefully with your advise I'll know what to do if I ever have such a huge success.
Yes you are trying to be a smart ass. But you're wielding sarcasm like a 5 year old with a chainsaw.
I already outlined what they should have done; not flood the market with sub-standard crap until everyone's sick of them. Pretty obvious if you're not blinded by greed.
>Because Apple was founded in 1976 and I'm guessing they aren't going anywhere. Google was founded in 1998 and I don't think they're going anywhere.
I'd bet everything I have that you'll be wrong. Look at any list of "top companies" over decades or centuries, and you'll see that, almost exclusively, they eventually disappear, via bad business, takeovers, whatever. There are so many massive, "successful" companies that you've probably never heard of because they no longer exist.
That said, not sure why people are ragging on Rovio so badly. These guys absolutely crushed it.
Really? What other paths are available for game companies? Any examples?
Take Nintendo and Mario/Zelda/Metroid franchises. You spend years developing quality titles that you rotate through to avoid saturating the market. Probably the easiest way to do that is to actually develop more than a single franchise, but still, throwing as many slightly modified versions of your original game at app stores as fast as possible is definitely not the way to build a long term business.
Blizzard (WoW, SC, Diablo), Microsoft (Halo), Nintendo (Mario), Pocketwatch Games (Monaco), the makers of Towerfall, DoubleFine. That's just off the top of my head as somebody who isn't very current with the game scene. I've included a mix of big companies, medium ones and smaller indie ones. There are other paths.
I love their games, but I wouldn't really describe DoubleFine as a success right now; they've burned through a lot of community goodwill recently, and additionally had to lay off 16 people after an unannounced project was cancelled.
I wasn't trying to list currently successful companies, rather companies that have stood the test of time. Despite the goodwill they've burned through and the layoffs, I think they will continue to exist and make games for a while.
Blizzard has milked the WoW cow for all it's worth. And all three series you've listed were created in the 1990's, so not exactly a beacon of innovation.
I'm not sure how your point relates to the topic being discussed.
Blizzard has kept WoW going strong for a decade, releasing expansions (not sequels) every two years. Diablo is on it's third iteration since debuting in 1996.
These are examples are a game developer taking a different path than releasing as many titles as possible as fast as possible.
Not concerned about innovation here. I was listing companies that have made a lasting career of videogames, which is what the parent was asking for.
And while Blizzard has milked WoW for a lot, I don't think they're done. They're planning for another decade at least and I don't doubt they'll do it, profitably.
Finally, yes the series were created in the 90's but they've updated them with thoughtful sequels with good content. SC2 is not just a reskin of SC in the way parent comments are describing the Angry Birds franchise.
Look at Nintendo or Blizzard or Capcom or any other gaming company that hasn't simply flared up and burned out like some of the recent mobile developers who didn't know how to handle their success.
Don't just take your one IP and drive it into the ground like Rovio did with Angry Birds. Diversify. But do so thoughtfully. If you release a bunch of crap, that will dilute your brand as well.
Talk about using anecdotal evidence and outliers to prove a point. Most studies, which don't focus on mega-corps like Apple and Google, but rather look at small, medium, and large businesses do show evidence of companies having a short lifespan, much like the product cycle itself.
I apologize for not citing sources, but the research is out there, and I don't have time at the moment to find them.
Dunno it it's 'success' but it may be sensible management. Things like Angry Birds are always going to be boom and bust. Hiring when there's lots of cash and laying off when there isn't may be kind of sensible. Though banking the money and not hiring loads of people may have been better.
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Reading up a bit they are less one hit wonder than you might think. Mikael and Niklas Hed, the guys who set up and have mostly run Rovio were designing and coding games since they were 12, and after founding the company in 2004 produced 51 games before Angry Birds. The company went from startup to 50 employees and then back to 12 by 2009 when they hit hard times. Post Birds they have gone to 800 employees and now I guess down to 700. They still made $37m profit in their last reported year (2013).
Having a one hit wonder is success. Forming a company around it to milk that brand is also a good strategy. But it would be naive to think every one hit wonder can be converted to a long term business strategy. Some can and some can't. But its just more difficult. You can't blame every company that fails for that - its the nature of the business.
"The lifetime of a company has been getting shorter and shorter for centuries."
Um: the concept of a joint-stock corporation is a recent phenomenon, for the most part. Though the concept dates back to 1250 and Société des Moulins du Bazacle (a milling company), for the most part they're a creation of the Industrial Revolution, dating to 1800, and until the late 19th century, companies were of limited scope and lifetime in many areas, including the United States.
What has been happening over the course of the 20th century is that various measures of corporate performance, vitality, and stability have been declining, among them the residence time of companies on measures such as the Dow 30 Industrials (the "Dow Jones Average"), Fortune 500, and similar indices. That's accelerated notably since the 1960s, as referenced in Deloitte and Touche's "Center for the Edge" study "The Shift Index".
> "The lifetime of a company has been getting shorter and shorter for centuries."
> Um: the concept of a joint-stock corporation is a recent phenomenon, for the most part.
"Company" is a far more general term than "joint-stock corporation"; they are not even approximately equivalent. Its true that joint-stock corporations as a common form of structuring a company is a fairly recent phenomenon, but generalities about companies aren't limited to the period where joint-stock corporations were a common way of organizing them.
The discussion concerned Apple and Rovio. Both are joint-stock companies.
Rather than discuss what you aren't talking about, how about if you describe what you do have in mind, and the form(s) of corporate structure involved, and what time periods.
I think you'll still find that prior to the Industrial Revolution, there were relatively few companies of any significant description. Sole proprietorships and the like, and a very few royal charters. 90% of all production was directly agricultural.
>Rovio's expansion into animation and merchandising continued to hit its profits hard, leading to today's 110 redundancies.
I wouldn't say they grew the company too fast. I can definitely see why merchandising would have been a huge hit on profits.
With the amount of angry birds garbage I saw in stores in my area, compared against the number of people that would possibly want said garbage, well...it was just a waste of money.
It's like some old executive thought it would be a great idea to expand into merchandising, as if this were still the 80s or 90s where people bought rooms full of that kind of useful shit.
Anyone who has looked at the income inequality mountain that has appeared since then knows that the people who would buy that kind of crap can't afford to. Though, it doesn't surprise me that the kind of executive who would be able to make a decision like expanding into merchandising would be upper class and completely out of touch with how little people want their garbage and would have seen it as a complete waste of money.
They pulled in 400M+ of revenue out of a game where you launch birds at piggies using a slingshot. I think they did some things right.
The lifetime of a company has been getting shorter and shorter for centuries.
Mobile applications, games especially, are the new extreme in that development. These companies have a very limited lifetime.
It is only natural that companies in this industry expand rapidly, face the limits of their growth, and then start shrinking.
The idea of lifetime employment is long gone. After Rovio dies, theres a Supercell or a Mahjong spewing up somewhere else.