Gabriel Leydon foresees the “true dominance” of mobile games coming (interview)

GamesBeat: Yeah, I noticed they said they were going to spend 50 million bucks right about now.

Leydon: I think that was just on TV commercials, by the way. It’s not just one company. It’s many companies with billions of dollars. That’s what we’re starting to see. We’ve got Gree.  DeNA is going to come in, Zynga’s going to come in. Zynga is going to start pushing harder. That means EA is going to have to push harder. So all that stuff’s happening this year.

GamesBeat: What do you guys do, then? Are you in a sort of lucky boat where you don’t have to spend?

Leydon: No, absolutely not. We have a huge audience. We’ve been doing this longer than anybody, so we have a tremendous first-mover advantage. For the type of games that we make and the type of audience we have, we’ve been cultivating these people for over three years. If you’re brand new coming into the space — wow. It’s really hard. So we have that going for us. Also, we’re focused on a very different type of games. We have a lot of new technology. So the stuff that’s out right now is not reflective of the things that we’re building. We’re actually pretty comfortable with what’s coming up next for us. We’re not competing on the same level as others. We’re making a very different type of product.

In my opinion, the only viable strategy for someone who’s not a multibillion-dollar company is to innovate. You really have to differentiate yourself in this market. But the cool thing about mobile is that the technology ceiling is a lot higher. Nobody’s really hit it. Whereas on Facebook, everybody’s making the same games because that’s the most Adobe Flash can do.

There’s a lot of room. You see this with Draw Something, right? There’s a lot of room to make apps that fit the device differently from the type of games that work on Facebook. Whereas on Facebook, there’s only the one type of game that works.

GamesBeat: The OMGPOP folks sold out at $180 million, and some people said, “Hey, they sold out too early.”

Leydon: They did. I agree.

GamesBeat: You can say that, I guess, but if you’re worried about things like the rising cost of user acquisition, then you should sell.

Leydon: Yeah, yeah. They would be stupid not to take it. But by the same token, they had a real opportunity to take over that “With Friends” space, which is a big space. That’s what I think about that. Essentially, they were a real threat to that at Zynga.

GamesBeat: It raises that question: Is copying and cloning a good model?

Leydon: It’s a good model if you have scale. Right? If you have cheap scale, it’s a great model. Cheap scale. If you have expensive scale, it’s a terrible model. So if you have cheap scale and a special deal with Facebook, where you get discounts on ads, then you can clone a game and you know you can scale that game cheaper than the other guy. So you say, “Oh, I don’t know what works. I don’t need to know what works, all I need to do is find out what works and have cheaper scale than them, copy it, and scale it out.” Because you don’t have to take any risk. If your scale is cheaper, you want to avoid risk, right? If you just want to scale fast. If you want to scale fast and you have the ability to do it cheaply, you just clone. Does that make sense?

GamesBeat: How do you see some of these forces coming together and shaping the way the mobile game industry is going to look by the end of the year?

Leydon: I see what everyone else sees. I don’t think I see anything in a really unique way. The first-generation mobile companies are going to struggle and they’re going to have to prove that they belong there. That’s what we’re going to do. The big money guys are going to come in and throw money around, hoping that they can buy something that works. What I think we’re going to see this year is a lot of rich guys wasting a lot of cash. You’re going to see maybe some success with that, and probably a lot more failures than successes to be honest. Throwing money around in a market isn’t really a good idea. I don’t know if consolidation is the right word, because I think there will be more developers rather than less. If you look at what’s happening with Temple Run — Temple Run is a great story. It shows the power of Apple and the App Store. The App Store is so vital. It’s so important, because it creates stories like Temple Run. That doesn’t happen on Facebook anymore.

GamesBeat: The fairy tale for a developer….

Leydon: Yeah. That doesn’t happen on Facebook anymore. It used to happen on Facebook. It used to be the norm on Facebook. It happens on Apple now every month. Every month, there’s a new one. And that’s the importance of the App Store, the index, essentially. Having an index instead of having it be share-driven. It’s driven by what’s popular, right? And that’s a really good thing.

It has its problems, we’ve seen its problems, with people trying to exploit that. But the reality is, it’s better for developers than a share model, where someone just pushing analytics and trying to control all the feeds can take over. It’s driven by what’s cool and what’s new. It creates more of these fairy tale stories. Like us. It is what happened to us with iMob. iMob was the first of its kind, and it just took over. It was this huge thing — this huge game. We couldn’t have done that without the App Store. It wouldn’t have worked like that. It scaled in three days. It didn’t take months. We did zero marketing.

People say the gold rush is over, and it’s absolutely not true. Look at Temple Run. Look at Draw Something. It’s not true. If you do make something great, the Apple platform will showcase it. So what I think we’re going to see is a lot of really rich guys throwing money at games that aren’t really that great, and they’ll waste a lot of money. But it’ll also have an effect on the smaller developers because it makes it harder for them to market. But I think the positive side is we’re actually going to see an explosion of independent developers being successful.

Yes, it’s going to be harder for the guys who are spending money to get users. But you’re also going to see more and more Temple Runs. That’s good news; that’s exciting news. The real thing that’s going to happen in mobile this year is that unique and talented developers are going to be extremely successful.