Wednesday, August 1, 2012

The Gaming Gold Rushs

We are living interesting times in gaming. From time to time, someone will declare the death of something game related so a new, better thing will take its place. The current trend is people making social and mobile games declaring that traditional gaming, with consoles and $60 games will die. And today, news that Zynga, one of the most famous makers of Facebook games is in serious financial troubles. All of that remembers the famous gold rushs humanity suffered in its History.

Every time that someone strike a successful business, people rush to make similar enterprises in hope to be as successful as that very first guy. Success comes to two kind of people. The ones who do it first and the ones who do it better. But to both of them, this just means short term success.

Long term success comes only to those who perceives the changes in their business and adapt accordingly, by also being very effective in determining for how long they can stay the same way before the gold mine dry out. As it happens with the gold rush, the ones who kept rich was the ones who perceived that simple mining would end up soon, and used the money they got from gold to invest in other stuff, like stores, cattle and more traditional, less fast profitable but more sure fire than just gold mining.

The next to fall?
Being able to perceive when something is a short term success is hard, specially when you are gaining lots of money. You just perceive it when the money start disappearing. The bubbles happened more then once in History. The .com bubble in the late 90s/early 2000s, the videogame crash of the 80s. All of them created because of stories of fast success that attracted too many people with no knowledge about how to make their business a long term affair.

I doubt that Zynga failing will just kill the social gaming scene. It will work as an warning to other companies about what they can become if they don't be careful. They will need to change the way they make business, diversify and improve in order to avoid a similar destiny. After all, we still mine gold, make videogames and have .com companies. Look at Google as an example of a .com company being successful and how they are working to broad the scope of their business.

Ultimately, it is sad that Zynga may be no more, not because of its games, but because of all the people who worked there hoping for success. But it is a warning about gold rushes. Not everyone will succeed and even less will keep being a success in the long run. So, before just declaring something to be the next big thing and the death of the old big thing, it is better be careful. Because only time can prove which one is right and to what extent.

Because not all that glitters is gold.

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