In a recent news release, Machine Zone, developer of Game of War and Mobile Strike announced that they are rebranding as MZ and will launch a cloud platform to allow other game developer to leverage the infrastructure they have built to support their massive scale.
My analysis is that the cloud platform move is a mistake. Here are 3 reasons:
Content is King and Middleware is the Peasent
When we started SOOMLA, one of the gaming gurus I consulted with advised me: “In Gaming, content is king, there are no successful Middleware companies”. This was 100% true 4 years ago and it is 99% true today with one exception – Unity. As a startup company you are in a position to bet your life and believe you will succeed where others failed before. An established company however, with an ability to create content hits should avoid such risky moves.
NIH is Strong in Gaming
If anyone should know this it’s MZ. About 90% of the revenue in the mobile gaming space is now concentrated in the top 50 companies. Almost all these companies suffer from NIH mentality. NIH stands for Not Invented Here and is mostly refering to companies with a strong bias against outsourcing. The game backend is considered core by most companies so the chances of outsourcing is low.
Game Publishers Protect Their Data
For MZ to be successful with their B2B business, other game publishers will have to trust them with their data. I know very few companies who are willing to share their data with 3rd parties. Even fewer will be willing to share their data with their competitor. The only companies who might be comfortable with their data being at the hands of MZ are the small companies and they typically don’t have the money to pay.
The fact is that many companies try to provide cloud services to game developers and none of them was successful in building a significant business. No reason to believe MZ found the secret sauce here.