2012’s biggest rumors and controversies in social and mobile games

2012 is coming to a close without any end-of-the-world shenanigans so it’s time for Inside Social Games to look back at the biggest rumors and controversies in the social/mobile games industry. 

We realize these aren’t always the most popular things for investors and developers to read, but the stories herein are often repeated within the industry even more than the success stories.  Some of the things listed below couldn’t be verified at the time or didn’t have enough substance to warrant a full news post.  In some cases, however, we were able to confirm certain details from reliable sources.  In keeping with tradition and out of consideration for these sources, we’ve chosen to keep them anonymous. 

6waves’ spectacular flame-out – partially confirmed

2012 wasn’t a good year for the company that started off as 6waves Lolapps.  The company received a huge amount of public criticism when it launched Yeti Town and was accused of cloning by Spry Fox after the two developers had signed NDAs to distribute Triple Town on Facebook.  The company then lost the second part of its name in March when it jettisoned over half of its workforce and pivoted from game development to publishing.  We’re told by multiple sources that the layoffs were actually noted on the company’s Google calendar by the company higher-ups, leading to a high-stress environment before they were officially announced.  Ravenshire Castle launched in May and subsequently flopped (it peaked at 50,000 daily active users and currently has 400).  Following this, 6waves started to focus more on mobile games than social.  Supposedly there was a deal with Kixeye in the works that “would have saved the company” but CEO Will Harbin personally killed it over the controversy surrounding Yeti Town.  Then, a few months ago, the company underwent more layoffs, settled the lawsuit Spry Fox had against it in a pretty spectacular concession that included giving up ownership of Yeti Town (this was, of course, only after the court denied 6waves’ petition to dismiss the case) and suddenly switched back to publishing social games instead of mobile titles.  We also heard from multiple sources that developers who worked with 6waves weren’t happy with the way their games were distributed. 

Rocket Ninja tries to re-invent itself, lays off staff in the process – confirmed and not surprising

Following last year’s controversial move to give the 2D action game Wrestler: Unstoppable a 3D makeover (something the game’s very loyal fanbase is still griping about), developer Rocket Ninja once again appears on our list.  Shortly before the developer publicly revealed its plans to shift away from games to a 3D “lightweight dating” system called Be3D, we heard reports that the company underwent a series of layoffs.  Then, immediately after our article went live, we heard reports of further layoffs that were only confirmed months later.  According to our sources, CEO Oded Pelled made the decision to move away from games on his own but was forced out because “he had the entire workforce against him.  After all, we were there to make games.”  We also heard that multiple people were denied unemployment benefits because of “legal mumbo jumbo” on behalf of Rocket Ninja’s employment practices. 

Although Disney’s been killing it with first-party social and mobile titles, we’ve been hearing stories about devs working on licensed projects aren’t doing as well.  The grapevine is currently saying Gazillion Entertainment is getting pretty low on funds while it works on its Marvel Heroes MMO; although there’s still some cash on hand from investors to get the developer into the new year, things don’t look good and we’ve heard the company isn’t able to meet some job seekers’ salary requests.  Meanwhile, another source says that Marvel’s terms for contractors to work on licensed titles come with a lot of prestige from the property but are so one-sided that “calling it ‘financial rape’ is an understatement.” 

Things aren’t as rosy for Kabam as they’d like us to think – partially confirmed

Even though Kabam is reportedly making money hand over fist off of Facebook, we’ve heard the company is having some issues.  The company was reportedly thinking about doing an IPO this coming year because it couldn’t find a buyer, but it recently backpedaled on that plan following the issues surrounding Facebook and Zynga.  Reportedly, the developer’s hoping to sell to a public game company next year like Warner Bros., Activision or EA.  On that note: The recent Warner Bros. investment didn’t actually infuse any cash in Kabam, instead it was a secondary shares swap.  Meanwhile, Kabam is still looking to acquire smaller developers and recently tried to pick up mobile studio Phoenix Age; that deal was almost for nine figures, paperwork was signed and then unapproved on the final day by Kabam’s board of directors. 

Everybody wants a piece of 5th Planet – confirmed

5th Planet Games has been enjoying a lot of success off of Facebook and some of the big players have become very interested in acquiring them.  We’ve heard stories of Zynga, GameStop, EA and Kabam kicking the company’s tires and/or putting offers on the table (to the tune of around $30 million), but clearly that hasn’t been enough for them to sell. 

Nexon has its eyes on Backflip Studios – confirmed

Speaking of developers being acquired, Dragonvale creator Backflip Studios is being eyed pretty seriously by Nexon.  You remember Nexon, right?  It’s the company that reportedly put in an offer to buy EA earlier this year. 

EA shifting away from social, focusing on mobile – confirmed

EA is reportedly pretty unhappy with how its non-PopCap social games (like SimCity Social and Outernauts) are performing and is shifting its other studios over to mobile.  The publisher has already scrapped everything browser-based that ClickNation was working on and moved the various teams to mobile. 

Get ready to see Activision on mobile – unconfirmed

Activision’s reportedly getting ready to make a big entry into the mobile games scene.  We’ve heard from industry insiders that the company decided to hold off on entering the market for three years and it’s now year three.  On that note, the deal between Flurry and Activision reportedly isn’t working out.  A lot of insiders are saying Flurry can’t make a decision on what it’s going to do, and most of the games the company is looking to publish have never been pushed live with Flurry’s backend in place.  Our sources tell us the only reason Activision’s talking to them is to make it look like they’re involved in the mobile market while they’re still formulating a battle plan. 

Zynga continues to anger EA with Respawnables – unconfirmed

Zynga’s recently-announced partnership with Digital Legends Entertainment left a lot of folks excited about the upcoming mobile game, but EA wasn’t one of those groups.  Digital Legends worked on several EA-licensed mobile titles like Battlefield: Bad Company 2, and EA reportedly believes their code for Battlefield was taken and used in the game. 

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