Gabe Leydon, the chief executive of Machine Zone, is the man on the Iron Throne of mobile gaming.
His company’s Game of War: Fire Age has been in the top-grossing charts ever since its release in the summer of 2013. And this summer, more than two years after its release, it became No. 1, eclipsing King’s Candy Crush Saga match-3 puzzler and Supercell’s Clash of Clans strategy game.
Leydon bet everything on Game of War, putting a team of 80 people on it for 18 months. They created a messaging infrastructure, built a translation layer so people around the globe could join each other in alliances, designed a complex strategy game that players would come back to over and over, and even raised a round of venture funding to underwrite it all. He even took out a Super Bowl ad with supermodel Kate Upton, in commercials that have gained a life of their own on YouTube.
Machine Zone also launched a new series of commercials starring singer Mariah Carey in a new campaign for Game of War. And now the company has more than 550 employees, compared to just 95 before the launch, and it is adding 200 people in Las Vegas to deal with customer service.
Leydon hasn’t spoken much about this success, but he has a lot to say. He predicted the coming age of mobile game dominance in 2012, and that came to pass. He was our surprise “mystery speaker” at GamesBeat 2015, where he talked about the challenge of creating a global franchise and why it makes sense to put everything behind one game. His comments are a stark contrast to those from Niccolo De Masi, the CEO of Glu Mobile, who advocates operating a portfolio of games.
Here’s an edited transcript of our interview.
GamesBeat: I thought you were bringing Mariah Carey with you. I’m trying out for your new commercial.
Your success all comes from one game. Your strategy doesn’t resemble any other company’s. How do you explain this?
Gabe Leydon: The game we wanted to make is incredibly complex. When we started building Game of War, back in 2011, we wanted to build something that the whole mobile ecosystem could play together at the same time.
What we started with was an Android-first game, because it was easier to release than on iOS. But we built it to be a very complex experience. It has immense amounts of concurrency, translation systems we built to embrace this global community coming together inside a single game, distribution technology so it can work on Android.
We wanted to try to get this ultra-hardcore experience that was the exact opposite of what everybody was doing – an Apple-esque UI, simple, easy to understand the experience. Nobody was thinking that people wanted games with thousands of options. If you look at the PC market and console, they’re all about that. We wanted to make a very complex, very large experience.
It’s very technical. It’s really hard. It’s closer to something like EVE Online. It’s the largest single-shard game in the world, ever. It’s bigger than Second Life, much bigger than EVE Online. It’s very hard to manage. It’s not something where you could have 10 people working on it. That’s just impossible.
GamesBeat: It has a gigantic messaging infrastructure under it.
Leydon: The backend is built on something we call multi-messaging, which is a messaging processing technology. It’s a cousin to high-frequency trading. It’s not a typical game server. We’re just able to process all the actions in the game very quickly. It’s very interesting tech. We’ve worked on it for more than four years now. We can handle more than a million players playing together at once in the old version of Game of War. No other game in the world can do that.
GamesBeat: If you’re a player, you don’t even notice this, right?
Leydon: You notice it in some aspects of the game. There are certain events, certain parts of the game where everybody gets together. It’s very hard computationally. There are a lot of challenges for us, because the game keeps getting bigger, and our biggest events have thousands of players fighting over a throne at the same time. You can see it there. You can see it in the fact that you can view any player at any time. There’s no servers in the game. It’s all just one big world. This takes a lot of people to run. It’s closer to a PC MMO in terms of operations than it is a typical mobile game.
GamesBeat: In our prep talk, I asked you, “Why don’t you just do more games?” You replied with something like, “Why doesn’t Blizzard just do four World of Warcrafts?”
Leydon: Yeah. Originally, World of Warcraft was made by 35 people. It grew up to need around 4,000, when you include customer service. These games aren’t easy. They’re very complicated. They’re very hard to run. We’re currently at about 550 people.
GamesBeat: You came up onstage in 2011 and predicted that user acquisition costs would soar out of control. Game of War was what you saw as a solution to that problem. What do you think looking back on that prediction?
Leydon: It’s kind of obvious — $40 billion or so gets spent on brand marketing, digitally, on the desktop. Currently about 15 or 20 percent of that has moved over to mobile. You’re going from very large screens that can show maybe eight to 10 ads at a time down to very small screens that can show maybe two. There’s a ton of congestion when that money moves from a large screen size down to a small screen size. It’s the equivalent of taking three lanes out of the freeway.
All this money comes from brands into the mobile space and it’s going to cause tremendous inflation in CPM costs. It’s been ramping up. We’re seeing more and more, and we’ll see a lot this Christmas. By 2017 the majority of the digital spend will be in mobile. Mobile phones can’t support that many impressions. They support much fewer impressions than desktop. A tremendous amount of money will fight over far fewer impressions.
It’s going to be a bigger issue moving forward. That line is a continuation from 2011 to 2017 and it’ll just keep going. It’s arcing upwards now.
GamesBeat: Your timing was good, back in 2013.
Leydon: If you look at top-grossing, today’s top 25, most of the apps are from 2012. There are a few apps from 2014. I don’t think there are any from 2015, at least in the United States. There are some in Japan and China. But most of 2013’s apps, I think, were developed in 2011.
It was a group of people who saw the trends, saw where things were going. Browser-style games were working well on the phone. We all focused on those core browser genres and brought them over to mobile and made them a more mobile experience. That was a really big move. It’s still where it is today. What keeps it there is the rapidly increasing cost of distribution. Those early guys probably aren’t getting as much distribution as they used to be, but they have enough traffic to make a game the size of where they are.
GamesBeat: How important was the advertising, like Kate Upton or Mariah Carey? Why did it make sense to do that?
Leydon: I’m a big fan of Asian free-to-play. If you look at Chinese free-to-play, Japanese free-to-play, there’s lots of celebrities involved in marketing those games. Working with Kate, we were focusing on American football, so we worked with someone who was a Sports Illustrated cover model. Somebody who watched football would probably know who she is. We already had a character in the game who looks like her, so we could do it without everyone thinking we were just going for a hit on the American football audience.
We didn’t honestly know how any of it would go. Clash of Clans started about eight months prior, but we were kind of taking it to a different level. TV is interesting. It’s hard to get it right, but if you get it right, it can work. It takes an orchestrated effort across television and digital. You can’t just do TV. You have to do really well on the digital side in order to make it work. But there are definitely pockets where you can spend and have it work out for you.
GamesBeat: You get all of this free advertising on YouTube as well.
Leydon: Machine Zone’s been big in the digital ad space for a while. I don’t think anybody knew, even when we were blasting out ads—I don’t know if the general public knew what Game of War was. But as soon as you go on TV, people think it’s a brand. It’s weird. Even though digital is way, way bigger than television. There’s just something that happens as soon as you go on TV.
GamesBeat: From some of the people looking at you from the outside in, there’s a feeling that you’re overly dependent on one game, that this can’t last. What can you convey from the inside out that shows you’re putting a lot of thought into your strategy?
Leydon: It depends on the observer, but I would say, looking at other video game companies, that I don’t think the multi-title strategy is going to last. That was our bet in 2011. The market is too competitive. The process of creating an app, running an app, and marketing an app is too complicated to do for five games a year. Especially if you want to grow a game to a very large scale. I don’t think it’s possible to do five games a year. I’m not even sure it’s possible to do two.
It may look weird, but you can hear everybody’s statements about what they’re doing. They’re collapsing the number of games they’re making. Right now they’re saying, “Oh, we’re only going to make four or five a year,” but I would guess that in two years they’re all going to be making one.
GamesBeat: If you look at your 550 people, that makes you bigger than Supercell, smaller than King, and smaller than Zynga. What do you choose to do with the teams that you have, now that you have this great engine of profit?
Leydon: Most of it is all in R&D and infrastructure. There’s so much to do. We’re adding hundreds of thousands of man-hours. The customer service requirements are crazy. We’re way behind. We just announced that we’re opening this facility in Las Vegas and we’re hiring about 200 people out there, just for customer service.
It’s incredibly complex in every way. If you want to market at the level we market at, you need well over 100 people just to manage the 300 or 400 ad networks out there in the world. If you want to run television globally it’s a gigantic effort. If you want to keep adding features it’s a huge effort. The QA across 3,000 devices is a gigantic effort.
I see it as our responsibility to build out infrastructure and be able to create the company that can support mobile at scale. Mobile at scale is huge. It’s terribly complex. There are basically no tools for it. There’s no engine you can get. There’s a whole bunch of third-party services that can do one little piece, but none of them are particularly good, because they’re not made by people who actually do this stuff. They’re made by outsiders who think they know what we need to do, but they typically don’t. There’s a tremendous amount of tools and management and infrastructure overall that we need to build.
Supporting a mobile game is a way bigger effort than the industry gives us credit for, I think. Managing it all is incredibly hard.
GamesBeat: What do you think the game industry is going to be like in 2017?
Leydon: 2017 will be, on the distribution side, probably three to five times harder than it is now. People complain about how difficult it is today. People in 2017 will look back and say we had it easy.
The complexity of running a game across all devices and all territories will go up. The requirements for a company to be able to execute on that in a high-quality manner will go up accordingly. I can see successful global game companies growing into the range of thousands of people.
Where I aim to position the company—There’s a lot of tools and technology and processes that don’t exist for free-to-play at the moment. We need to create them and stay ahead of the curve. Niccolo sees distribution problems and solves them with stars, which is totally viable. I see it as a technology problem that there currently isn’t a solution for. That’s what we’re dedicating our R&D toward.