Wednesday, March 26, 2014

PUBLIC OR PRIVATE OWNERSHIP WHICH ONE BRINGS BETTER RESULTS FOR A GAME COMPANY?

This is actually very simple question, because the answer is obvious and a fact that can't be disputed. Privately owned companies are doing better when you take the long approach and follow them through decades. The reason for this is that they can focus on improving their business without the constant pressure of stock owners who only care about money. Private companies also care about their surroundings and make better propellants of good in society and community where they operate. This in turn means that they get better goodwill and therefore better workers. It might not be true what comes to CEO as private companies tend to pay less than public companies. But CEO is not really all that important instead they are more often than not the catalyst of destruction in a company they lead.

WHAT THIS HAS TO DO WITH GAME COMPANIES?

Well, right now there is very interesting pair of mobile game companies fighting for the crown of highest crossing game of App Store and Google Play. Supercell is doing it with their Hay Day and Clash of Clans and King Digital with their Candy Crush Saga.

SO WHICH ONE IS PRIVATE AND WHICH IS PUBLIC?

Japanese Softbank bough majority of Supercell and can be considered private company because Softbank has amazing take on long term operations and doesn't care much about quarterly success. King Digital is taking different road and running for IPO. Lots of regulatory stuff in the works for King and playful conditions for Supercell. What do you think, which is nicer?

WHERE THE PROFITS GO?

Supercell says they are happy to pay taxes and amazingly enough they DO PAY out massive cut of their earnings as taxes. What comes to King I am not sure - and I'm just speculating here - but since their headquarters is in Ireland, a country know for ample opportunities for tax planning (avoiding taxes at any cost), I believe that King Digital will not turn out to be a model member of society. Instead the money that company earns goes to people who already have quite a bit of money - now where's the good in that?

People who look at the world solely through the dollar binoculars quickly move on if they get more money from somewhere else. There is next to nothing in terms of long-term relationship building or any feeling of gratitude. On the other side of the coin - Supercell side that is - we have lots of support and projects designed to involve company's local communities. To me it looks like workers in Supercell just might code that extra mile.
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