David Kim claims that the mobile games industry moves so fast that the environment actually morphs into a new industry every other year. Within the last two years, an entirely new crop of companies and people have emerged. He insists, “I’m not in the same industry just because I’m in the same company.”
David Kim, CEO of Animoca, has been doing games, online content, and services since the 90s. By the time he and his business partner started on mobile gaming, they had already published games for PC and consoles such as Xbox, PlayStation and Nintendo. By this time, he says, “The mentality and the operations behind Animoca are established and part of our group’s DNA.” But he emphasizes that there is no industry like the games industry in terms of its pace of change and dynamism, saying, “The constant learning process that is required to stay ahead of the market is exhilarating, if a bit tiring at times.”
Making Work Fun
The achievement Kim is most proud of in his career started ten years ago with a company called mail.com, which he bought and then sold. In the process, he collaborated with his current business partner and friends with whom he runs Animoca. Working with these close friends brings him his greatest satisfaction; as he points out, “Work doesn’t feel quite as much like work when your co-workers are also your friends.”
As CEO of Animoca, Kim makes decisions on the strategy and direction of the company. Because they are still in the growth stage, he must be involved with the forward planning, while his partners are responsible for the operational side. He has built, run, listed and sold many companies, mainly in the internet/tech industry, so he is cognizant of the aggressive growth nature of the games industry. Even so, he is constantly surprised by the rate of change, which seems to increase every year. He believes there is nothing more exciting professionally than this fast-paced business with life-changing technologies and content, combined with enormous financial opportunities.
Not a One-Hit Wonder
The biggest challenge Kim sees in the industry is an ecosystem with an unstable business model that is unprofitable for the majority of apps. Platform providers, advertising companies and publishers of big hits are all making money, but out of the millions of apps, only a small minority show a profit. He sees the majority of companies, both big and small, being built around the concept of making the next big hit, but that is unrealistic and unsustainable. This situation will see many developers and publishers wither away, investors lose money, and innovation suffer until equilibrium is reached.
Kim and his partners have responded to their analysis of this ecosystem by deliberately designing Animoca to not be a hit-driven business. Although they do have hits, such as Star Girl and Pretty Pet Salon, they rely instead on their hundreds of apps to provide a more reliable cash flow. Kim’s baseball analogy: “We don’t necessarily need to have a home run to keep scoring. All we need is a steady flow of singles and doubles with the occasional home run to push the score higher.”
An important trend Kim sees in the future of the games industry may be brand advertising, since this is a revenue source which has not yet been fully exploited. So Animoca has been building a proprietary system for their apps that will support ads and maximize activities of their millions of users. This system can also help developers and publishers promote brand advertising when they are ready to use it for a more mainstream revenue source. Until then, it allows Animoca’s apps and their partners’ apps to be more widely discovered and distributed.
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