Dots started as an art project and evolved into a successful game. The initial inspiration came from an artist's work in Japan. The game was well received upon launch, with the help of Betaworks' network and Facebook marketing. The clean and minimalist style of the game was effective in attracting a broad audience. The studio now focuses on creating games with more narrative and engaging characters. The game development process includes prototyping, production, launch, and live updates. New levels and gameplay are added to the game every three weeks.

- The development process for creating new levels in the game Dots involves introducing new mechanics, art, and gameplay every 3 weeks, with weekly events for players.
- Kabam, a game development company, experienced shorter development cycles when they were on Facebook, but the cycles became longer when they moved to mobile games.
- Mid-core games, which require more time and engagement from players, were the focus for Kabam, and they found that acquiring customers for these games became more expensive over time.
- Licensing intellectual property (IP) such as Marvel helped reduce customer acquisition costs for Kabam, as they could target fans of popular IPs.
- The lifetime value of customers in mid-core games tends to be higher than in casual games.
- The distinction between casual, mid-core, and hardcore games is based on the level of engagement and time commitment required from players.
- First-person shooter games on mobile devices have historically not been successful, but recent releases like Fortnite have seen initial success.
- The focus for game developers is on finding new areas to generate revenue, but mid-core games have proven to be profitable.

- The speaker discusses the need for innovation beyond just theme in game development.
- They mention the challenge of finding the right talent and genre for mobile games, using the example of racing games.
- The cost of customer acquisition has increased significantly, requiring a large investment to reach profitability.
- Prototyping and beta testing are important steps in game development.
- The speaker emphasizes the importance of releasing a game with a significant amount of content to keep players engaged.
- Building and managing a community around each game is crucial, especially when dealing with a portfolio of games.
- Long-term franchises and projects are now a focus in game development.

- The speaker discusses the concept of long-term franchises and how their monetization model is based on free-to-play games.
- They compare games to TV shows, with a focus on building a loyal audience over time.
- Indie game developers often pre-sell their games to bug test and build a fan base.
- The speaker mentions platforms like Steam and Humble Bundle as helpful for indie developers.
- Twitch has affected game development by making games with emergent behavior more popular to watch.
- Mobile games have not yet found success in streaming, but games like Hearthstone and PUBG have potential.
- Esports and VR are seen as areas of future traction, with AR being a stepping stone towards VR.
- Blockchain games are mentioned but are currently facing challenges similar to VR.

- The speaker believes that blockchain games are currently facing challenges similar to those of virtual reality games.
- The accessibility and user experience of blockchain games need improvement in order to attract more players and developers.
- The speaker mentions games like CryptoKitties and CryptoCelebs as examples of early blockchain games with simple mechanics.
- The potential for blockchain to enable ownership transfer of in-game goods and titles is discussed.
- The speakers highlight the importance of creating addictive game mechanics and iterating on game loops.
- The process of coming up with successful game ideas is discussed, with one speaker mentioning the influence of aesthetics and the other mentioning consumer insights.
- Advice for those entering the gaming industry includes starting their own company if they have the means or gaining experience at a gaming studio. Unity is also mentioned as an accessible game engine for beginners.

- Unity and other game engines are accessible tools for starting game development
- Modifying games has become a cultural trend, with a sub-genre of game modifications on platforms like Steam
- Paper prototypes and creating work to show potential employers is important for differentiating oneself in the industry
- When starting a game studio, it's advised to raise enough money for multiple games, as the first one is unlikely to be a hit
- Roblox has been successful in opening up a development platform for kids
- Balancing creativity and de-riskifying the business side of game development is a common challenge
- The importance of finding the right fit for game themes and genres, as well as dealing with clones, is discussed
- Candy Crush is a favorite game that the interviewees have not made, and they discuss the story of its clone, 2048

- Dots started as an art project and became a successful game with a broad audience.
- Kabam experienced shorter development cycles on Facebook but longer cycles on mobile games.
- Licensing popular IPs helped reduce customer acquisition costs for Kabam.
- Mid-core games have higher customer lifetime value than casual games.
- The distinction between casual, mid-core, and hardcore games is based on player engagement.
- First-person shooter games on mobile have historically not been successful, but recent releases have seen initial success.
- Game developers focus on finding new areas to generate revenue, with mid-core games being profitable.
- Innovation beyond theme is important in game development.
- Prototyping and beta testing are crucial steps.
- Releasing a game with significant content keeps players engaged.
- Building and managing a community is crucial for game development.
- Long-term franchises and projects are now a focus.
- Blockchain games face challenges similar to VR games.
- Creating addictive mechanics and iterating on game loops is important.
- Starting a gaming company or gaining experience at a studio is advised.
- Unity and other game engines are accessible tools for beginners.
- Modifying games and creating work for potential employers is important.
- Raising enough money for multiple games is advised when starting a studio.
- Roblox has been successful in opening up a development platform for kids.
- Balancing creativity and de-riskifying the business side is a common challenge in game development.
- Finding the right fit for game themes and genres, and dealing with clones, is discussed.
- Candy Crush is a favorite game discussed, along with the story of its clone, 2048.

Patrick Moberg - https://twitter.com/patrickmoberg - is the cofounder of Playdots - https://www.dots.co/ - which is a mobile game studio in New York. They make:

Dots - https://www.dots.co/dots/
Two Dots - https://www.dots.co/twodots/
Dots and Co - https://www.dots.co/dotsandco/

Holly Liu - https://twitter.com/hollyhliu - is is a Visiting Partner at YC. Before that she cofounded the gaming company Kabam - https://kabam.com/

The YC podcast is hosted by Craig Cannon.

Let's start with an explanation of what Dots is, what the whole entity is, and we'll just go from there.

So Dots started as sort of this little art project that was born at Betaworks, which is an incubator investor in New York City.

And it was sort of my final synthesis of art and technology, which I had been dancing in between up until then.

So games was this really natural progression.

So it was sort of my first foray into that, and I think it was a lot of right place, right time.

as a group, we're kind of surprised by how well and how far it took off, and sort of the fan base that it resonated with.

And so we've now built a studio around that idea.

Paul Matzkoff And had you made a game of any kind before?

Walker It's funny, I feel like right when I started learning how to program, I was messing around with 2D arrays and grids and very similar to what Dots became, but that was like 10 years earlier.

And then I kind of hit a wall because I was so new to programming.

So I moved to server-side stuff and started doing much different type of work.

So it was interesting to come full circle back to that after programming for a long time.

But in the interim, there wasn't a lot of interest in games.

Paul Matzkoff Yeah, well because it obviously resembles a Damien Hirst piece, right?

Did you try out other things where you're like, oh, maybe I can match this up, or was that the first?

Big point of inspiration was this artist, Yeo Kusama.

So the year before, I went on this trip to Japan and went to the city Matsumoto, where they were in a retrospective of this artist's work.

It's a little more off the grid than Damien Hirst.

But the whole city was covered in her work.

So the buses were wrapped, the Coke vending machines were wrapped.

There was a couple big museums that were showing just her work, and so it was sort of dots everywhere.

And so the way the program at Betaworks was run was basically an open prompt to build a prototype of whatever you wanted within 3 or 4 months.

But you had to launch something at that time.

And so I was kind of looking back on that trip and I think her work was really formative because it, it was like beautiful, but accessible.

was like the idea that it could almost be playful to be, to be like interacting with something beautiful, was kind of the impetus.

And so I like started with screenshots of just like, what could a mobile game look like that would be different from what sort of what else is available?

Yeah And the gameplay kind of came from that design like it was very much like Okay, here's what it here's what it could look like How would this play and so I started sort of like the rules kind of came from there.

Paul Matzkoff And are you prototyping these interactions and then showing them to people?

I don't know much about game development, so how do you figure out those mechanics?

Huffman I think what was really cool is that, So Paul Murphy, who would later become my co-founder with Dots, the way he ran this program at Betaworks was that basically every week we would check in on Thursdays and either talk about what you did or later in the program show what you had completed.

And so we got in this weekly cadence that I really wanted to show something every Thursday.

And so it kind of drove that prototype really quickly, and it made me want to make things that I was proud to show.

And So I found that was a great way to produce that type of game.

And so it was like every week getting in people's hands and sort of seeing how people reacted to it.

And is that the same way you develop games now?

So we sort of have 3 that are live in the store.

We've done a few others that didn't make it to full releases.

We can get into it later, but we'll put stuff in test market and do that on a bigger scale.

So I think Dots was really born out of friends and family testing it, and now we just need to do things at a bigger scale to know how it'll resonate with people beyond our network.

Goldberger Yeah, and so the initial launch, how was it received in the beginning?

Again, I think a lot of luck, a lot of right place, right time.

I think Betaworks, it was their first foray into games.

And so I think their network, which is a very substantial and influential network, I think it was cool.

It felt cool to them to be a part of a game launch.

And so people with tons of Twitter followers talked about it day 1.

And then we, I think Paul was forward thinking.

He was like, we've got to try Facebook marketing, which at the time, no other, I think, very few other Betaworks companies were doing.

he was just like, this is a good thing to test that with.

So we had a really small budget, and I think there was actually a mistake and it all got instantly bought a ton of players.

It was still relatively small compared to other budgets now.

I think Paul talked about it like he fucked up, but it kind of worked out.

So it was kind of like that great word of mouth, this foray into Facebook marketing in a really early time.

I think the aesthetics led to really inexpensive sort of CPIs, cost per install.

I think it was just such a clean image of a white screen with dots on it that I think that just popped in the sort of Facebook feed.

I think it was like I always felt like the less character a game had the more like a wider audience could almost project whatever they wanted onto it.

So it was like maybe you won't find the most hardcore fan but it's going to appeal to such a broader sort of audience.

you've kind of see that cut out in things like catch up or there's like voodoo games which do like these really simple games like that are all sort of geometric shape driven.

think for like that particular title, it was like awesome.

And then to see that evolve into our second game, 2 Dots, which was directed by David Howzen, he took it in this way that I didn't really anticipate, which was more character and a rich art world that I think was ultimately the right decision.

In hindsight, I think fans from the first game who wanted a deeper gameplay, they were hungry for a product like 2Dots, which had both the deeper gameplay and the deeper aesthetic.

It was just the right mixture that I actually didn't know was going to work that well.

I kind of had this idea that Dots was going to remain this sort of minimalist approach.

But what's been cool is now we've sort of have this studio that can support different types of perspectives on stuff like that.

So now CPIs are way more competitive because there's games with higher LTVs.

It's like really easy to slip and just use them all the time.

So I mean, the goal is basically to get a lifetime value that's more than the cost per install.

And then once you sort of dial that in, you can kind of scale it.

But then you start competing with other people who most likely have higher LTV games.

So because the sort of mobile game industry has evolved so much, there's people with higher LTVs who are willing to pay much more.

So the competition on Facebook has gotten really steep.

But going back to your initial point, is that like the clean style still effective?

I think it's like difficult to create high LTV games with that style.

Because I think you do want passionate niche audiences, which can be large, but they want to gravitate around a certain theme or something like that if they're going to financially invest in something.

So now it's about building more narrative, building bigger characters, getting people really engaged.

And I think for a lot of people that work

at the studio, I think they're excited to do that.

Like it's not just an end to the means of like financial growth.

It's like people like narrative and I think both working on it and sort of interacting with it.

So it's kind of a like 2 birds with 1 stone sort of thing.

So what does that mean on the creative side?

Like are you turning these games out in 3 months now or like when you storyboard or do you even storyboard like these longer games?

The big thing with a game like 2 Dots is that it's basically a game that, and this is kind of disseminating throughout the entire games industry, it's like Games have multiple phases.

So there's sort of pre-production where you're prototyping and pitching a game idea.

Then you move into production, the sort of time it takes to get it to a launchable state,

And now things have live ops, which means you're adding additional content and doing updates, whether it's to maintain stability or performance, or to add new levels or other things to a game.

So we have a really finely tuned process that makes new levels, which includes sort of either a new mechanic, always includes sort of new art, and sort of new gameplay for players every 3 weeks.

So there's sort of new levels added every 3 weeks.

And then on top of that, there's weekly events that are sort of levels you can only play for that week.

And if you complete them, you get sort of a medallion or sort of bonus sort of things.

And so this has all sort of been, like it evolved for.

So Patrick was explaining what it meant to develop Dots, and then 2Dots, and how it was different in terms of storyboarding, creating a game.

Because his first prototype was a couple weeks before you had it.

And 3 months to launch, and then because it was sort of more arcadey, the gameplay loop was pretty much infinite.

So now we're like, with 2Dots, it's like in a live ops operation.

So we do releases every 3 weeks, and weekly events and stuff like that.

And so Holly, on your side, what did that mean at Kabam?

So early, early on when we were on Facebook, the development cycles were a lot shorter.

Within about 3 months we could launch a game and that was really because I think our game mechanics were simpler even for a mid-core game.

Yeah, so mid-core games tend to be a little bit more engaging.

Well, not more engaging, but you have to spend some more time.

So a mid-core game is something like, I don't know if anybody's heard of Civilization, but those are kind of like the strategy-based games we started on.

Strategy-based games are kind of like, if you have resources, you want to build those resources so that you can build your village.

And then ultimately, in most of these things, is You build these villages so that you can raise an army and go attack people.

It's usually there's some type of battle mechanic.

And a lot of our initial games, we eventually moved into racing games or RPG games.

RPGs is a lot of role playing where you can build out a character and that you can do something with that over time.

But oftentimes, there was some type of attack or battling of some sorts.

And so it always kind of led towards something that was quite competitive.

But early on, our cycles were a bit shorter, mainly because web was a bit shorter.

Also, I guess if technically it wasn't, yeah, it was 3 months, but there was a lot of stuff that wasn't built out when we launched.

Like when we first did something like an MVP on Facebook.

It was just trying to catch, just kind of move as fast as possible to get an MVP.

We were able to build resources to build the buildings and you could get to an army, but you could not attack.

So the main part of it, we're like, it's just going to take so long for them to get to that stage.

But as we moved on to mobile, the cycles just got a lot longer to today.

I mean, it takes us about probably like 18 to 24.

18 months is on the short side, like 24 months, like 2 years.

And it's partly kind of for us, the mechanics have gotten more involved on mobile game.

You couldn't just push a new code every day.

Also, the quality has gotten a lot higher.

We've moved into 3D art, which is a very different setup than 2D.

I don't know with dots if it's, it's probably still 2D, I'd imagine.

We're like dipping our toe in the water of 3D.

Oh, we can have a discussion around that.

It's very, It was very different in terms of that.

And then also on top of that, we did a lot of IP licensing.

So you've got to talk to the Fox people about, hey, does this make sense?

Or the Hunger Games people with the characters.

Like, you can have massive hits if you get rights to that stuff?

So I think I might be jumping the gun, but somebody did ask about.

Yeah, no, we should read the question properly.

CAC is growing, and CPIs are reaching like $3.

And me and Patrick were discussing about, there's just 2 sides to each side.

It's CAC, which is cost of acquiring a customer, for those that don't know.

And then CPI, which is cost per install, which is part of that.

It's literally you have to get an install in order for

And then the other side is what we call LTV, which is the lifetime value of the customer.

And we're constant, which I'm pretty sure you guys are at Dots, trying to sort out like what's that LTV, because it changes over time and you want to model it correctly, because you just don't, the game's still live.

And you're like, oh my goodness, there are people who are playing from inception.

And that actually plays into your average LTV.

So either way, the whole trick is to get your LTV really high and your CAC low.

And so what this person was asking is as your CAC gets higher and higher, it's very hard to collect that margin.

So for us on our end, we saw that, that our cost of customer acquisition was just getting higher and higher.

And I do think it's because we are what we call the mid-core game.

So people who maybe identify as gamers and those people are not necessarily all your friends.

It's not necessarily they're all into a certain show.

You could have friends that are just your friends.

And not everybody wanted to go build a farm so they could build a building.

It's not something my grandma would want to play or my mom.

Whereas Dots is probably so much more accessible.

So for us, the IP has been very helpful in reducing that cack, because I don't have to explain what Marvel is.

Like, I could go after the Marvel fans, and it's so much cheaper than just trying to get them to understand what is Edge World or Dragons of Atlantis.

once we acquire that customer, their LTV does tend to be a bit higher than casual.

I think 1 helpful way to describe the different casual, mid-core, and then there's hard-core, it's casual, you play whenever you have free time.

And then hard-core, you schedule your life around playing.

We've also found in our mid-core games, especially when we went to mobile, we had to make the site what people could input short enough so when they're standing on live.

For us, to kick off building a building, like, it was almost like a setup game in some ways.

Some pieces were super, like, set up and then come back and see what was the result.

So we had to, like, adapt some of those things.

But I think the ones, They've gotten more adaptive in terms of like what you're saying.

You don't build your life around it, but you think you're intentional about it.

Especially our Marvel game, you have to, especially when you're battling, it's quite engaging.

Like you're not going to just put it on auto battle or something of that sort, right?

It's like, they're trying to make it like Street Fighter for your Marvel characters.

But early on, we certainly had to reduce it so that it would just be like filler, like it could fill your time while you're waiting in line.

And I think we just found that with mobile platform.

It was very hard to sit there and not think about interruptions and not think about like, I really wish I could capture World of Warcraft type.

Even though we're on our phones all the time.

Yeah, I was going to say, has hardcore become a thing on mobile, or is that still console, PC?

I think what's interesting happening right now is that 2 games, Fortnite and PUBG, are the number 1 games right now.

And so both of those just got ported to mobile.

So you can basically play against other PC players on your mobile device.

So I think those lines are going to blur, but right now it's still fairly segmented.

It'd be interesting to see if the porting, because I still feel like your platform does have impact on your game design.

So I wonder like how they kind of adjust it for that because I haven't seen, I'll be honest, I haven't seen total successful first-person shooters on mobile.

I mean I think these are historically no.

Fortnite like just came out last week or something.

It'll spike and then sort of maybe die off.

It's really novel right now to play this on like against other players on your mobile device.

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Gaming Studio Founders - Patrick Moberg and Holly Liu