Angry Birds CEO hops into slingshot, goes 'WEEEEE!'

Someow you knew the wiring was on the wall when they kept coming out with successive versions of the same game with random words tacked onto the end. It seems like a combination of greed and no mid- and long-term strategy (getting more, different games in the pipeline) are doing for the like of Rovio and King.

As long as it's a family (small) business, they'll be ok. It's the ones the run for IPO that seem to tank quickly and burn a lot of folks. The Hed family can probably all retire now.

As someone who works in this business I'll just give my thoughts.

I've been working for fairly successful companies making iOS/Android games and apps (though to my knowledge most revenue comes from games, in particular in app purchases).

There are several worrying problems that smartphone game makers face:

1. Zero brand loyalty. Users barely know the makers of gamers, let alone wait to see what their next output is. Ask the average user of Temple Run who made it and they will stare blankly, as though it isn't an important question. This is a big problem if you are trying to build a storng team with a good reputation. Compare this to console games. Pretty much everyone knows Rockstar makes GTA etc.

2. Barrier to entry is so low. There are two standard frameworks used to make smartphone games, Unity3d and Cocos2d. Unity has more or less cornered the market. It also gives away a free version to developers (not a trial version) with somewhat limited functionality, but in no way makes making a successful game impossible for small teams with not much capital. This is a major headache as nobody knows where the next big game is going to come from. Which leads to my next point.

3. Nobody knows what they're doing. Over the past 4 years I've worked on several smartphone games (as a programmer) and am keenly aware that the industry is riddled with overoptimistic expectations. Spend a few thousand dollars on a game (very easy to do considering buying assets and models, Unity licenses etc), and expect to make that back in the first month? Don't hold your breath. Management have very little idea how to do any kind of costing or expected income. Usually estimates are wildly off base. Some hapless managers cling to weird KPI's, like Daily Average Users as though that means anything. Who cares if the DAU is not too bad if NOBODY is spending even one cent on in app products? There is a lot of insanity in this industry. (Incidentally I remember someone at work scoffing at Riot Games League of Legends game for having such a low ARPU (average revenue per user). Completely ignoring the fact that they make megabucks. ARPU is a crappy indicator, only useful if your game is scraping by.

Next, producers and game designers do not know what the ingredients for a successful game are. They claim they do, they claim if we do X,Y,Z then the game will be popular. But it's just guesswork, usually copying and tweaking games that are already popular, but have been popular for at least a year, so I see it as unlikely anyone will want a rehashing of that game. Possible but unlikely. Which leads to my next point.

4. Everyone copies everyone. This is the most depressing point. Since nobody knows what sells, nobody wants to take much of a chance and so the number of game permutations are limited. We pretty much tweak, rehash, relabel and remake each others' games. And once a game reaches the top of the charts, you can be sure all over the world people are trying to copy it as fast as they can.

5. The market is too crowded. Too many games, too many companies. Not enough money being spent.

Having said that, working in these teams is incredibly fun, the programming can be challenging and interesting. I meet a lot of great people, and the glimmer of hope before the release of a game creates a great buzz in the atmosphere. Meetings can be hilarious, everyone is enthusiastic, even after a launch failure.

The industry definitely needs culling, and when that happens perhaps I'll do web development or something, but for now it's just too much fun.