Dave Roberts: PopCap Games' Startup Secrets | Summary and Q&A

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April 29, 2013
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Stanford Graduate School of Business
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Dave Roberts: PopCap Games' Startup Secrets

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Summary

PopCap Games is a game company focused on creating enjoyable games for all age groups. They started in 2000 with their most popular game, Bejeweled, and achieved success with a few other games. In 2005, they realized the need for experienced management to steer the company towards long-term success. They hired a CEO who was not necessarily a games person but focused on improving the business side of things. They also recognized the potential value in bringing certain aspects of their business in-house, such as mobile development and retail console development. PopCap Games was later acquired by Electronic Arts for around $750 million, making it one of the biggest video game transactions at the time.

Questions & Answers

Q: How did PopCap Games start?

PopCap Games started in 2000 with a small team of founders, including the current CEO. Their first game, Bejeweled, became their most popular game and set the foundation for their success.

Q: When did PopCap Games decide to bring in experienced management?

In 2005, PopCap Games realized that in order to achieve long-term success, they needed a CEO with experience in leading companies. They recognized the need for someone who could hire high-caliber talent and guide the company towards becoming better and more successful.

Q: What challenges did the new CEO face when joining PopCap Games?

As a software guy rather than a games person, the new CEO's initial challenge was to build the business side of PopCap Games. This involved establishing departments for sales, marketing, distribution, business partnerships, as well as typical company infrastructure like HR and legal.

Q: What did the founders realize when they considered selling the company?

While contemplating the offer to sell the company for $50-60 million, the founders realized that if that wasn't the right move, they needed to make some changes in order to ensure long-term success. They recognized the importance of having experienced management and making improvements at PopCap Games.

Q: How did PopCap Games aim to improve their revenue?

PopCap Games had a self-perpetuating R&D factory that maintained a high quality bar but only broke even financially. The new CEO proposed bringing in more business in-house, rather than relying solely on partners. This meant expanding into areas like mobile development and retail console development, with the goal of making more money.

Q: When was PopCap Games acquired and by whom?

PopCap Games was acquired by Electronic Arts (EA) about a year and a half ago for approximately $750 million. The acquisition included the potential for an additional $1.3 billion based on performance, which is currently being worked through.

Q: How significant was the acquisition of PopCap Games by EA?

The acquisition of PopCap Games by Electronic Arts was believed to be the largest video game transaction in the industry at the time. It marked a significant milestone in the business's growth.

Takeaways

PopCap Games, known for creating games that appeal to players of all ages, recognized the need for experienced management to take the company to new heights. By bringing in a CEO with a software background, they focused on improving the business side of things and expanding into new areas. The acquisition by Electronic Arts further solidified their presence in the industry. Through these strategic moves and their commitment to crafting enjoyable games, PopCap Games continues to grow and navigate the ever-changing world of gaming.

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