IN THE BOOM-AND-BUST BILLION DOLLAR CELLPHONE VIDEO GAME BUSINESS, TODAY’S CINDERELLA STORY IS TOMORROW’S OLD NEWS. MEET THE PLAYERS – THE WINNERS AND THE LOSERS – IN THE MOST HIGH-STAKES GAMING BATTLE OF ALL TIME.
Early in 2012 the biggest story in the video game industry came down to one word: booty. “Booty” is among the word clues in Draw Something, the cellphone game that has swept the planet. To play, you choose a word from a list of three and then draw a picture of it on your screen. Once you’re done, you send it to the phone of your opponent, who has to guess what you drew. It’s kind of like Pictionary for the iPhone generation. The secret of the game’s appeal is that you can draw whatever you want. That gives it an edge over the other big games of our time – Angry Birds, Call of Duty: Modern Warfare 3, etc. – because it lets you express your personality and, when words like booty come up, your twisted imagination. While a kid might draw pirate treasure, adults might sketch something more lascivious.
Although only some of the clues are double entendres, there are websites devoted to Draw Something porn (like Draw Something Dirty). As one player joked in a tweet, “I played Draw Something for about two days, then I remembered I could masturbate.” When a game is monopolizing people’s masturbation time, you know it’s a hit. Released without fanfare for iPhones and Androids in February 2012, Draw Something became the biggest overnight sensation in recent gaming history. In its first couple of months, players downloaded it more than 50 million times, generating hundreds of thousands of dollars a day for Draw Something’s maker, OMGPOP – impressive booty for a game that cost less than six figures to make. In fact, six weeks after the game came out, OMGPOP – which had been on the verge of going out of business, another start-up tech firm headed quietly down the toilet – was bought by Zynga, the onetime video game publishing behemoth, for $210 million. There’s even a TV show in development based on the game. In the beginning, the stratospheric rise of Draw Something was thought to epitomize the new gold rush that’s turning mobile- game developers such as Dan Porter, Draw Something’s unlikely creator, into titans. Porter had one thing to tell the jealous game makers who disparaged his sudden success. “We’re fucking making money,” he said with a devilish grin when I interviewed him in April 2012. “We’re making a lot of money. We’re the hottest company in tech. I’m like, ‘Dude, we’re destroying you!’” But with so much money at stake, and so many players grabbing for it, today’s rising star can burn out tomorrow. And by mid- year, gamers were asking if Porter would eat his words.
Striking it big in video games is one of the most contemporary of dreams. With nothing more than a cool idea and computer code, a geek in a hoodie can make hundreds of millions. The dream of technologically inclined college grads used to be to work in movies or on Wall Street. Today? Young adults out of Ivy League schools dream of hitting it big working in their basements. The dream began in the early 1970s when Nolan Bushnell, a gangly young Mormon from Utah, launched the first great video game company, Atari. [Ed's note: see story on Bushnell in our September 2012 edition] Over the next decade – which became known as the golden age of video games – home and arcade hits from Donkey Kong to Defender seeded Pac-Man fever among the next generation of players.
With the personal-computer boom in the 1990s, intrepid coders rose to power by making and distributing games over the nascent internet. Start-ups such as id Software (creator of the seminal first-person shooters Doom and Quake) and Epic Games (maker of action hits Unreal and Gears of War) proved they could compete with the Nintendos of the world. migrating from our Xboxes and Wiis to our iPhones and Androids. According to a March 2012 report by the NPD Group, a market research firm, traditional video game sales dropped 25 percent, to $1.1 billion, compared with a year earlier. Even Nintendo, the most storied console maker in history, is taking a hit, with more than $500 million in losses in its latest fiscal year – its first reported loss in 30 years. Meanwhile, annual revenue from mobile games is projected to more than triple, from $5 billion today to $16 billion by 2016. When people first began talking about the new mobile-gaming gold rush, all conversation came back to the elephant in the room – or rather the big red bird in the room. Angry Birds, the game that forged the market, flew in from out of nowhere (Espoo, Finland) three years ago to perch atop the iTunes charts.
As id Software co-founder and self-made millionaire John Carmack once told me, “In the information age, the barriers just aren’t there. The barriers are self-imposed. If you want to set off and go develop some grand new thing, you don’t need millions of dollars of capitalization. You need enough pizza and Diet Coke to stick in your refrigerator, a cheap PC to work on and the dedication to go through with it.” The pizza and Cokes are paying off more than ever today but not in the way the major video game companies expected. Now that we’re all living our lives on smartphones, game playing is Despite its absurd premise – slinging birds at pigs – the game has become the go-to finger fix for cellphone addicts. The title has been downloaded more than a billion times and generated more than $100 million last year for its creator, Rovio, which, worth an estimated $9 billion, is now in the ranks of Finland’s most-valued companies, alongside Nokia. With that kind of money at stake, aspiring game developers have one question on their minds: How do they make the next Angry Birds, when odds are they’re just going to lay an egg?
There are a couple of things you notice when you walk into the Manhattan offices where Draw Something was developed. The first is the big red foam numero uno fingers with the word “Zynga” printed on the side. One morning last spring, the Zynga fingers were everywhere inside this bright, airy loft in SoHo. They were tacked to cubicles where 60-some employees pecked diligently at computers. They were resting on big red beanbags and piled on red and white pom-poms. There was plenty of celebrating going on after OMGPOP sold to Zynga. At the time the sale went down, Zynga was the gold standard of social gaming companies – the in crowd. The other thing you notice is that each of the conference rooms is dedicated to a drug dealer on The Wire, the classic HBO drama. The name of the dealer, along with a memorable quote, appears near each door. There’s Marlo (“I wasn’t made to play the son”) and Prop Joe (“The shit is just business. Buy for a dollar, sell for two”).
Though Dan Porter, a clean-cut 46-year-old in jeans and a polo shirt, looks more like Greg Focker than Avon Barksdale, he sells video games like the guys sell crack on The Wire. “That’s where I learned everything in business,” he says. Like what? The $210 million man smiles and quotes the line outside the Omar conference room: “It’s all in the game, yo.” Porter never expected to be in the game at all. Growing up in Philadelphia, he wasn’t a computer geek and couldn’t code a lick. His video game experience was limited to playing Defender at the local bowling alley. But what he lacked in programming skills he made up for in entrepreneurial hustle. After college, Porter helped launch Teach for America, a national teacher corps in the US, and led TicketWeb, a ticket-sales site that he helped sell to Ticketmaster for more than $35 million. Porter was working for Richard Branson, owner of Virgin, on a series of music festivals when he met Charles Forman, a programmer who’d been running a fledgling dating site with the clunky name I’m In Like With You. Porter, intrigued by the success of online games, came onboard in 2008 as CEO to transform Forman’s outfit into a game company, which they redubbed OMGPOP because it sounded contemporary and cool. “I wanted to call it WTFMOM, but it turned out that was a porn site,” Porter says.
OMGPOP scored $17 million in funding, but the company’s games – including Puppy World and Hamster Battle – never got out of the doghouse. Forman left the company, leaving Porter in charge. Porter had heard the stories about start-ups like Rovio and Zynga making millions on mobile and social games. If they could do it, why not him? “I was like, I want to make a game,” he recalls. “I’m not a game designer, but I played all these games on an iPhone. I kind of understood what makes games work: the rhythm, the pacing, the sense of fun, the way they mess with your mind.” Mess with your mind, indeed. The best cell phone games give you something to fill your micro-slices of downtime – riding the subway, waiting in a checkout line. You don’t have to read pages of instructions to play; you can jump in and know intuitively what to do. Swipe your finger here, tap the screen there. Unlike Grand Theft Auto or Mass Effect, a great mobile game is designed to be played in brief intervals, delivering a little dopamine hit that sates you until you can play again. “You always feel like you want to take one more crack at solving the problem,” Porter says.
In this sense, cell phone games like Angry Birds and Doodle Jump hark back to the first golden age of arcades, when playing, say, Space Invaders was as simple as moving your ship and shooting. You don’t need to memorize a million combo moves on your Xbox controller. The secret is to divine the old adage about what makes a game compelling, whether it’s chess or Cut the Rope: It needs to be easy to learn but difficult to master. Few have mastered the formula better, or seen a bigger payoff, than Jason Kapalka, co-founder of the Seattle-based developer PopCap. The company’s pioneering puzzle game, Bejeweled, defined fingertip candy for a new generation. The object is to line up a series of brightly coloured gems that vanish with a satisfying sparkle, only to be replaced by more. PopCap presaged the mobile boom by targeting casual gamers – moms and bored secretaries – on the web. But the company was still struggling. “We knew an audience was big but was very hard to reach,” Kapalka says. Then smartphones came along. “Now nongamers have devices that can easily access games,” Kapalka says. “That caused this enormous explosion.” Bejeweled went on to sell more than 50 million copies, and in July 2011 PopCap sold to video game publishing giant Electronic Arts for $750 million. (Though PopCap sold for more than OMGPOP, its rise was not nearly as immediate.)
As Porter knew, PopCap wasn’t the only company striking it rich in the new golden age of gaming. In 2011 Keith Shepherd and Natalia Luckyanova, a young husband-and-wife team in Raleigh, North Carolina, became overnight sensations with their hit mobile game Temple Run. Inspired by the opening scene of Raiders of the Lost Ark, the action game casts you as an adventurer running away from freaky beasts after stealing a temple idol. Released in August 2011, Temple Run has been downloaded more than 100 million times, and it made its creators instant millionaires. “There have been a lot of people banging down the door and wanting to talk to us,” Luckyanova says, “companies wanting to acquire us, venture companies wanting to invest, which is great but a little crazy.” Shepherd still can’t grasp his unusual success. “To see people playing the game in public, on the metro or at a bar, is a little mind-blowing,” he says. As for the money, Shepherd plans to treat himself soon. “I got my eyes on some fancy rides,” he says. With games like Temple Run and Bejeweled paying off for their creators, Porter wanted his shot at fame and fortune. “I wanted to make a game that was played by everyone,” he says. And crazily enough, he did.
Late last year Porter was visiting a friend who worked at a hip-hop record label. He had come to show off progress on his new game, which he’d been working on since June. The game was Draw Something, a new version of a title the company had released on the web with moderate success a couple of years earlier. His friends were skeptical. “They were like, ‘Yeah, yeah,’” he says. “They described it as my Ahab moment.” The original title, Draw My Thing, was a bit like an online game show: Players took turns drawing pictures that others online had to be the first to guess. Porter thought that bringing that kind of Pictionary-like social experience to mobile games would be unique and addictive. As with all game development, this one evolved by trial and error. Initially, to play the game you had to draw something based on a choice of three different words, then the other person had to type out a best guess. But as Porter watched his buddy try to guess the picture he had drawn, something wasn’t clicking. “It’s a bong!” the guy said. “A joint! Weed!”
Actually, it was supposed to be a flower in a vase. But it wasn’t Porter’s lackluster drafting skills that bummed him out. The game wasn’t working. Typing out words on a phone was annoying, and the virtual keypad would pop up and cover half the screen. Players needed to be able to choose answers that were less open-ended. A successful cellphone game had to have, as Porter put it, “the right form” – a sleek, organic way of cramming everything into the screen space without confusing the player. Porter went to the best place for brainstorming – the streets of New York City. He walked around the block until it hit him: tiles. To help ground players, he would show scrambled letter tiles below the drawing to help them narrow the possible answers. Keeping things simple was a mandate. Throughout the development, Porter kept trying to put himself in the mind of an elderly player. “If an 80-year-old person can figure it out, everyone can figure it out,” he says. He knew that the best party games are inherently funny (e.g., beer pong or drunken charades). For Draw Something to get people talking, and laughing, he wanted players to try to draw things that were contemporary (say “Wu-Tang” or “Hunger Games”) and open to interpretation (“wet” or “facial”). The game needed to appeal to both sexes as well, and the best way to do that was to make something that wasn’t just fun but also flirty.
“I thought, This game has to be a way for boys in high school to flirt with girls in high school,” he recalls, and he was dead serious. Porter felt that young people especially needed a more playful way to flirt than texting, which can feel loaded at times. A drawing game could be innocuous but sexy too. “It gives you something to talk about,” he says. The other question was: How could someone win the game? The answer came to Porter one afternoon when he was watching his son and a friend play catch in the park. At one point, Porter’s wife told the kids she’d take them for ice cream if they reached 1,000 catches. “That’s it!” he thought. Rather than compete against one another, Draw Something gamers could play cooperatively, working together to reach the longest possible streak of correct answers.
By February 2012, Draw Something was complete. To make a blockbuster video game like Call of Duty, a company can spend blockbuster-film-style money: $100 million easily, with a team of 150 people. A team of five made Draw Something. There was just one problem – OMGPOP was going under. The company had burned through its $17 million in funding, and Porter was in the unenviable position of having to let good people go. “I felt terrible,” he says. When the investors suggested he raise another round of funding, Porter declined. “Look,” he said, “we’re in the business of making games. If we can’t make games, then I don’t want more money just for the sake of staying alive. I feel good about this game. Let’s see what happens.” The investors eyed him from across the table. “This game is all or nothing for you,” they said. “I bet it all on this game in that sense,” Porter says. “I was like, Holy shit, this might be the last game we ever make.”
He began freaking out. What the fuck was he doing? He was gambling the future of his company. To keep from going nuts, he began waking up at six every morning to meditate and chill. On an early February morning, Porter got up before sunrise, shut his eyes and visualized the best. Then he took the subway to the office and uploaded Draw Something. At the time, if you wanted to cash in on the mobile-game gold rush, you had to get the attention of Zynga. Founded by Mark Pincus and named for his late dog, Zynga has had a market cap as high as $9 billion. It was built on the success of social and mobile games such as FarmVille, CityVille and Zynga Poker. When I visited the company’s San Francisco headquarters in April, it was like arriving at Willy Wonka’s factory. Visitors walk through a neon light tunnel to get inside, where some of the 1,700 employees play Ping Pong and vintage arcade games. There’s a “Zyngabago” motor home parked inside and a full bar for Friday happy hour. Marvin Gaye’s “Sexual Healing” is blasting throughout the café, and the lobby rises six stories, revealing the exposed-pipe ceiling. This is the house that video games built, and Zynga built it, in part, by acquiring game developers looking to cash in. One of the biggest scores was Newtoy, a small Texas-based start-up run by two brothers, David and Paul Bettner. The Bettner brothers scored big with their Scrabble-style phenomenon Words With Friends. Zynga purchased Newtoy in December 2010 for $53 million. David Bettner described joining the behemoth as “strapping a rocket booster on our back.”
But with thousands of new games released online every month, how could a little gamer with a big dream get noticed by the big dog? Travis Boatman, senior vice president of mobile for Zynga, distills his strategy to three key words: free, accessible and social. “When you can play a game with everybody, that’s a very broad game; that really resonates with our company,” he says. And there was no game being played by everybody like this little drawing game from New York. On the day of Draw Something’s release, Porter was watching the number of downloads. The game was being sold for 99 cents. There was also a free version that included ads. OMGPOP did almost nothing in the way of marketing or advertising. If a game doesn’t crack the iTunes chart of the top 25 apps, it’s almost like being invisible. Porter saw his game rising but not breaking the all- important barrier. “I kept thinking, Fuck, we’re close!” Charles Forman, Porter’s original partner, was watching too – considering the balance of his bank account since leaving the company had dropped to just $1,700.
Porter had a colleague create a little matrix window on his computer monitor that tracked the game’s downloads and the number of illustrations being created by players in real time, almost like a stock ticker. The first time he checked it the ticker said there had been 1,000 downloads and 8,000 drawings created. Porter and his team tweaked the game to improve its performance speed. By the end of the first day, they had 30,000 downloads. Each morning when Porter woke up in his Park Slope apartment to check the ticker, the numbers increased: 60,000; 90,000; 120,000 downloads. Ten days later, they passed 1 million. “It was weird as shit,” Porter recalls. “I was like, Who are these people?” The game was soon earning hundreds of thousands of dollars each day. Zynga was asking the same question. Porter had fortuitous timing. The Game Developers Conference, the annual gathering of all the major and independent game makers, was scheduled for March in San Francisco. Porter already had plans to go. Now he was rolling in as the big man, the whiz kid who was living the ultimate 2012 dream: developing a golden app. Draw Something ranked number one on both the free and the paid iTunes charts. As Porter walked the halls, other mobile-game developers began showing sour grapes. “Oh yeah, that’s not even a game!” “I had a drawing game, but I just hadn’t made it yet!” “I was like, whatever, dude,” Porter says. “You didn’t fucking make it, so who cares?”
Porter went to the Zynga office to meet with the executives, including Mark Pincus. Porter was impressed by how much Pincus had clearly played the game and how he picked up on the important details. “I got the word Tumblr in the game,” he told Porter. “I get it. It’s relevant.” But sometimes your mind does funny things when you’re faced with living out the ultimate dream, and Porter, despite being wooed by so many suitors, wasn’t sure he wanted to take the pot of gold after all. One night he went to Brooklyn’s Crown Heights neighbourhood for dinner and overheard a table of middle-aged women complaining about their jobs. Something inside him twisted. Why sell out if it meant leaving the job he loved? “I was like, Fuck, even when we’re failing I have the best job,” he says. “We’re in SoHo making games. Most people think their job sucks.” But then Porter realized he could stay on as an executive and continue his work under a buyer, which is exactly what he and the investors decided to do. There was just one last thing to take care of – hiring back the people he had laid off. But Porter had to act fast and hire them back while their stock options were in place, though he couldn’t tell them why. “Let’s have coffee,” Porter emailed the former employees. “I’m going to take you back,” he told them at Le Pain Quotidien. “But you have to start this afternoon.”
On March 21, just six weeks after Draw Something was released, Zynga announced its purchase of OMGPOP. “The OMGPOP team has created a game that’s fun, expressive and engenders real social interaction,” Pincus said. “Draw Something has captured the imagination of millions of people around the world.” The plan was to use Zynga’s power and resources to scale the game even higher and take over the world by localizing it for different countries, changing the language and cultural references of the game’s clues. In an even more perfect ending, Porter decided to share the wealth – spreading $30 million among his firm’s 40-some employees, including those he had hired back. When asked why he did something so unusually generous, Porter shrugs. “I don’t know,” he says. “It was the right thing to do.”
Before I leave Porter’s office, I challenge him to a quick round of Draw Something. I look down at my screen and see a black line rising up, then over and down. Then another black line up and over and down. Buildings, I wonder? Then I see what appears to be a large pancake circle at the top of one building, then another pancake on the other. But wait – they’re not pancakes. They’re two feet, connecting to two legs that rise beyond the screen. Beneath the buildings Porter has scrawled the word Tokyo. The answer, I realize, is Godzilla, and he’s on top of the world. But as I leave his office, Porter walks me past the Omar and Prop Joe conference rooms, past the pile of Zynga pom-poms, and shows me a wide- screen monitor mounted across from an elevator. The monitor displays a feed of tweets about the company. “It gets you the pulse of things,” he tells me. Just then, as though on cue, a tweet comes up: “Draw Something loses 5 million users a month after Zynga purchase?” When I ask Porter about that, he shrugs it off, attributing it to misinformation.
In the lightning-fast online world, the backlash comes even faster. In the wake of the Zynga purchase, game developers are crying hype and overvalue. As Cliff Bleszinski, designer of the blockbuster franchise Gears of War, says of the high purchase price of OMGPOP (and PopCap), “It’s ironic that all those companies sound like a bubble bursting.” Indeed, in the weeks after our interviews end, a complicated series of events began to threaten the video game industry’s newest behemoth. Suddenly Zynga’s earnings began to fall, as did its stock price – down 10 percent, then 40 percent and 70 percent. The Wall Street Journal called Zynga’s situation an “earnings disaster.” Then, in early August, the company’s chief operating officer, John Schappert, resigned. Meanwhile, the popularity of Draw Something quickly began to fade. “People bring you up,” Porter responds when asked about the decline. “And then they bring you down.”
All of which begs the question: Who will fill the void? Which tiny start- up will be the next OMGPOP, the next Zynga, the next billion-dollar juggernaut? Chances are you’ll find out soon – while playing some new game on your cell phone.
by David Kushner
Illustration by Johan Lazar
Published in Playboy South Africa February 2013