Book Review: The Age of Gold

I recently got through the audio book version of The Age of Gold: The California Gold Rush and the New American Dream, and while it started out a little slow, it picked up partway through and there were a couple things I really enjoyed about it.

The book is a history of the California gold rush, starting with John Marshall's initial discovery in 1848, through the goldrush itself, and through to the construction of the railways connecting east and west coasts. The book presents the history by following several individual's stories, some of whom came overland, some of whom came by ship, crossing at the Panamanian isthmus. It ends by telling what became of all those individuals, ranging from cases where they ended up destitute to cases where they went on found lasting legacies (e.g. Leland Stanford went from mining supply sales to railroad tycoon to founder of Stanford University)

The stories the book tells have numerous humorous anecdotes and interesting factoids. For example, when mining companies started using nitro glycerin to blast through rock, the used Wells Fargo to ship it to them - only they didn't tell them WHAT was in the boxes they were shipping. After a few sudden disappearances of post offices, they decided it might be a good idea to disclose the contents.

What I liked best about it was that it connected various other pieces of American history that I've read about elsewhere. From some of the 49-ers following the Oregon trail, to the part California played in funding part of Lincoln's efforts in the civil war, to role the gold rush would have in America's support for the gold standard, for me this book was like that piece of the jigsaw puzzle that lets you connect two large patches you've been working on in isolation.

Finally, the author makes the argument in the end, somewhat convincingly, that the gold rush was a major contributor in forging the entrepreneurial spirit that would see America become the world's leading economy in the following fifty years.

The Age of Gold: The California Gold Rush and the New American Dream

Playfish's Smart Move in the Facebook Gold Rush

This is a good piece on why Playfish sold itself to EA.

New markets (for game makers or anyone else), the successful ones anyway, tend to turn into gold rushes. Someone takes a chance, stakes a claim, hits gold, and then in come the hordes of followers that heard about the guy that got rich with only a mule, a pan, and the clothes on his back.

In recent years we saw a casual games gold rush, a console downloadable (lead by XBLA) gold rush, an iPhone gold rush, and now it's "Wagons, Ho!" for the Facebook gold rush.

With each of them, the market achieves an equilibrium over time as competition increases faster than consumer spending does, and eventually you get to the same place as the rest of the games industry: A hit driven business in which a minority are profitable, a very small minority are extremely profitable, and the majority go bust trying to get to the top end of the curve.

What *differs* though, in how these markets evolve, is the tactics taken as the marketplace crowds. The strategies available are the same across all of these, but which is the right one, tactically, varies by platform.

They are:

1. Lowball on price: The PC casual download biz eventually went this way, and many are trying this tactic on the iPhone, but I believe it's a fools game, and some of the others below will turn out to be the real winners for that platform.
2. Out-Innovate: This one is easy. Go invent an awesome game mechanic/biz model/etc, that no one else has thought of, and that everyone loves and finds addictive. Oh, and make it hard to imitate. Easier said than done. The problem with this one is that there's no clear path.
3. Spend your way out of the clouds: Spend on development, spend on marketing, etc. Build a better looking title, get pretty screenshots, and then go pound the pavement to get more ink/photons than the other guy. (We saw many XBLA titles go this way as budgets went from $100k to $1M)
4. Out-Brand: This is another flavor of spending your way out of the clouds. Specifically, license IP/Brands, from games or elsewhere, can help your title stand out in a crowded space. This works especially well with a less scrutinous audience (doesn't necessarily mean hardcore, could mean just more price or time sensitive).

The interesting thing about the Playfish acquisition is that they pretty clearly are claiming that #4 is going to be the strategy of choice for Facebook, and I have to believe they are right.

Dropping price doesn't work because the FB games are mostly free/freemium. Innovation is risky everywhere (better to be 'fast follower'), and increasing the game budget... well that will happen, but it's not clear where it ends, or if FB games are ready for Unreal engine license.

So that leaves out-branding, and as the article points out, the EA acquisition gives Playfish the financial resources with which they can go do this, plus a great set of connections at EA with their own IP and licenses from other EA partners.

[note, of course you'll see ALL the above strategies employed in each of these markets, but there will be majority gravitation toward one or two at any given time]