I was part of a great panel discussion last night at the Microsft NERD center in Cambridge sponsored by the MIT Enterprise Forum. The panel was titled “Reducing Risk in the Games Business”, and I was joined on the panel by Scott Triola (5X5 Advisors, formerly of Blue Fang Games), Tarrnie Williams (Roadhouse Interactive), and Toby Ragaini (Zynga Boston). There was a lot of good discussion around analytics and using data to make sure you are delivering an experience that customers want, including tips like checking day 1 retention rates. Our contribution was a bit different - the risks in the educational games business are different, as are the customer requirements. I talked about the 3 major risks we have faced as an educational games company and how we have attempted to deal with them: is there a market for educational games at all (we made games with crossover appeal into the commercial games space like Making History), the unique technological requirements in education (we built a platform to handle web delivery, LMS integration, assessment support), and the requirement that educational games prove they are teaching the correct things (we designed a process that starts with learning objectives).

Another major topic of discussion was funding. Investors traditionally have been hesitant to invest in the gaming business because it is a hits driven content business with high costs. But the rise of digital distribution, mobile platforms, and social gaming have opened things up quite a bit. Some advice from the panel was to go with investors you think you can work with (not just the highest valuation), smart money is better than dumb money (go with investors who know your market), and be prepared for some hard times along the way.

One particularly poignant part of the panel was hearing about Blue Fang Games shutting down in September. Blue Fang had great success in the PC games space with the Zoo Tycoon franchise (which my kids grew up with), but stumbled trying to find their place in a new mobile/social game market. They weren’t able to generate the critical mass to compete with the larger players in the space and ultimately folded.

Other bits of wisdom came out of the evening as well. Tarrnie mentioned that promoting mobile games inside the ecosystem works, but promoting them outside doesn’t. The concept of short, iterative development to get quick feedback was advised, as well as the importance of trying things and failing quickly. And one of my favorite quotes of the night: “You always have 3 options - the right decision, the wrong decision, or no decision. No decision is by far the worst of the three.”