The Secret to Building Forever Franchises: Owen Mahoney
Jan 27, 2025
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Owen Mahoney, former CEO of Nexon and VP at EA, offers a sharp critique of the gaming industry. He argues that fun should take precedence over flashy graphics, emphasizing a return to engaging gameplay. Mahoney discusses the staggering rise in game development costs and the risks they pose, along with the crucial balance between product and distribution. He also shares insights on his favorite M&A deals in gaming and outlines how to create enduring franchises beyond temporary blockbusters. His candid take is both refreshing and thought-provoking.
The gaming industry has shifted focus towards high development costs and graphical fidelity, often at the expense of delivering engaging gameplay.
Owen Mahoney underscores the importance of establishing 'forever franchises' to achieve sustained growth and long-term player engagement in gaming.
The current struggle in the gaming sector highlights a stagnation in innovation, necessitating a renewed emphasis on creativity and player enjoyment.
Deep dives
The Evolution of the Gaming Industry
The gaming industry has undergone significant changes over the years, particularly during the time Owen Molling spent with Electronic Arts (EA) and Nexon. Molling's early experiences at EA coincided with the rise of the PlayStation 2 and pivotal moments, such as the launch of Madden Football and Grand Theft Auto 3. He emphasizes the importance of understanding the market dynamics, highlighting how EA expertly navigated their shift from package goods to embracing new business models. During his tenure, EA recognized that the key to their success was leveraging established franchises, allowing them to introduce new titles like The Sims, which became one of their most successful games.
The Role of Licensing in Game Development
Licensing intellectual property (IP) has become crucial for differentiating games in a crowded market, according to Molling. He explains that utilizing recognizable franchises, such as FIFA or Disney, creates immediate appeal for consumers who are eager to engage with familiar content. As development costs skyrocket, securing well-known IP helps to mitigate risks in a landscape where players are increasingly selective. This approach, while effective, also reflects an industry's struggle to consistently innovate beyond established formulas, often leading to a significant reliance on licensed content.
Challenges of Rising Development Costs
The podcast highlights how development costs for AAA games have reached unprecedented levels, with estimates suggesting that some projects may exceed $200 million. Molling points out how this inflation of costs affects industry creativity and the ability to take risks on new IP. The fixation on high-quality graphics has led to many developers prioritizing visual fidelity over engaging gameplay, which in turn can alienate gamers seeking innovative experiences. As the industry focuses more on cinematic elements, the essential principle of delivering fun games has taken a backseat.
The Importance of Longevity in Game Franchises
Molling stresses that the concept of 'forever franchises' is essential for sustaining growth within the gaming industry. With Nexon's longstanding titles, such as Dungeon Fighter and MapleStory, demonstrating their potential to generate continuous revenue over decades, he asserts that the current industry mindset needs to evolve. Unlike traditional media where new releases must consistently replace older ones, successful gaming franchises can maintain player engagement and monetization over time. This approach challenges the common belief in the fleeting lifecycle of games, showcasing how deep engagement can lead to enduring success.
Reflecting on the Future of AAA Games
The conversation also addresses the current state of AAA games and the prevalent dissatisfaction among developers and consumers alike. Molling observes that while many talented developers are trapped in repetitive and unfulfilling roles, the industry's drive for innovation has stagnated, leading to frustration on all fronts. To shift this dynamic, he advocates for a re-examination of core game development principles, emphasizing the need for projects that focus on player enjoyment rather than exhaustive graphical prowess. Ultimately, a collective effort is needed across the industry to spark meaningful change and prioritize creativity and engagement, particularly in the face of widespread job reductions.
Gaming isn’t about blockbuster budgets or flashy graphics - it’s about fun. And somewhere along the way, we’ve forgotten that.
In this episode of Secret Stash, hosts Justin Kan and Archie Stonehill sit down with former Nexon CEO Owen Mahoney to unpack what’s gone sideways in the gaming industry and how to fix it. Here’s what you’ll hear:
⭐ How game development costs are driving up licensing deals
⭐ Why fun is losing out to graphics fidelity in a battle no one asked for
⭐ The ultimate debate between distribution vs. product
⭐ Owen’s two favorite M&A deals at EA (and the one mistake everyone should avoid)
⭐ How to build forever franchises instead of wannabe blockbusters
Owen calls it like he sees it, and the result is a refreshingly honest take on what gaming can and should be.
Read the highlights here: https://dev.stash.gg/blog/secret-stash-ep-7-owen-mahoney
0:00 - Intro
1:41 - Getting into gaming
3:14 - What EA did right
7:30 - Licensing and development costs
13:08 - Poor man’s Hollywood
20:15 - Distribution vs product
25:05 - Nexon is misunderstood
32:08 - EA’s 2 best M&A deals
37:41 - The biggest M&A mistake
41:31 - Forever franchises
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