This multi-part series examines the history of Knockabout Games, a mobile games startup I co-founded in 2002, near the start of the pre-iPhone “first wave of mobile gaming”. The start of the series can be found here, and last week’s post on Knockabout’s demise can be found here.
I wouldn’t feel too sorry for Knockabout, by the way. We shut the company down cleanly, without debt. Everyone found work quickly. Our publishing partners still talk fondly of the titles we created for them. And something odd happened after we closed the doors.
Early in Knockabout’s existence we did a deal with Motorola to OEM our pinball game on some of their handsets. It was a colossal waste of time and money that we never thought we’d recoup (our max upside projection was about 10k– we did it mostly for the relationship). We’d only ever seen one royalty report, and it was so small as to be inconsequential. We had written the whole thing off.
Except that, three months after Knockabout’s end, we started getting checks from Motorola. Checks that were large enough that we could have saved the business if we still had staff or an office or anything. But we didn’t. So we distributed the money to the shareholders. We had no way to project how much would come in or for how long, but every quarter a new statement and royalty check would arrive in the mail. For two years, money came in and went right back out.
On top of all that we got inquiries from both Microsoft and Sony about the pinball game, and ultimately licensed it to both of them.
Was all that enough to make up for the cash we sunk into the business? No. But it did soften the blow substantially. Monty and I often joke that we should have made pinball and immediately shut the company down. The real lesson, perhaps, is that we should have put more faith in our own IP and focused on that with a smaller staff. We didn’t need to build the shop like our past businesses — a few guys would have been sufficient to achieve sustainability and from there we could have scaled up as appropriate.
The larger observation is that speed isn’t always as critical as it appears. Any time you enter a new, emerging space, there’s a tendency to view the window of opportunity as small. You have to move fast, grow quickly, establish a foothold before the value chain ossifies and fills up with established players. To some extent that’s true. But I think there may be a case for being patient and growing organically, not worrying about the timeline and just adapting as you go. If you’re small, really small, you’re actually pretty nimble — large tectonic shifts in the space don’t kill you.
That wraps up the series on Knockabout Games. The entire sequence is below: