Machine Zone

Machine Zone, Inc. (MZ) is an American privately held technology company, founded in 2008 and based in Palo Alto, California. The company is best known for its widely advertised freemium mobile MMO strategy games Game of War: Fire Age and Mobile Strike,[5] which have both simultaneously been ranked among the top ten highest-grossing mobile games.[7]

Machine Zone Inc.
MZ
FormerlyAddmired (2008–2012)[1]
TypeSubsidiary of AppLovin
Industry
Founded2008 (2008)
Founder
  • Gabriel Leydon
  • Halbert Nakagawa
  • Mike Sherrill
Headquarters
Palo Alto, California
,
United States
Area served
Worldwide
Key people
Kristen Dumont, CEO
Products
Number of employees
550 (as of October 2015)[4]
DivisionsPlatform[5][6]
Subsidiaries
  • Epic War LLC[2]
  • Epic Action LLC
Websitemz.com

History

Origin and first products (2008–2012)

The company, which was originally called Addmired, was founded in 2008. In 2012, Addmired changed its name to Machine Zone, after raising $8 million in funding from Menlo Ventures.[8] Gabriel Leydon founded the company with partners Mike Sherrill and current Chief Technology Officer Halbert Nakagawa.[8][9] It was among the participants in Y Combinator's Winter 2008 Accelerator program for startups.[10]

The company got its start making AddHer and AddHim,[10] a pair of MySpace widgets that TechCrunch called "a Hot or Not-esque social network plugin."[11] Addmired later pivoted into the free-to-play game space, releasing 13 games between 2009 and 2012, including the iOS games Original Gangstaz, iMob and iMob 2, and Global War Riot.[8][11]

Breakout games (2012–2015)

Machine Zone released Game of War: Fire Age in October 2012 in New Zealand and Australia. According to VentureBeat, Leydon had used the 2012 venture funding to "bet everything on Game of War," putting a team of 80 people on an 18-month project to design and build a complex real-time strategy game, including creation of a messaging infrastructure and language translation layer that would allow worldwide participation in the game's alliances and chat.[4]

The company launched Mobile Strike, a modern warfare game, in November 2015.[2] In an advertising campaign that featured Arnold Schwarzenegger, the game was marketed as a product of a company called Epic War, later revealed to be a development studio of Machine Zone.[2]

Rebranding (2016–2017)

The company rebranded itself as MZ in 2016.[12] That year, a funding round valued the company at $5 billion.[13]

In April 2016, simultaneously with rebranding itself as MZ,[12] the company announced the launch of a new platform as a service, leveraging the cloud-based networking infrastructure of its real-time gaming platform.[14][15] Using the existing technology developed to monitor hundreds of thousands of players in its real-time mobile games, the company developed and demonstrated a system for the government of New Zealand that included applications to view and manage public transportation more efficiently, including an ability to provide timely information, down to the second, on bus and train movements.[13][16]

In November 2016, Machine Zone announced that it was partnering with Square Enix to develop a Final Fantasy XV mobile MMO.[17] Through a subsidiary company, Epic Action LLC, Machine Zone released Final Fantasy XV: A New Empire in June 2017.[18]

Refocus on gaming (2018–present)

In June 2018, MZ's board of directors replaced founder and CEO Gabe Leydon in order to refocus the company on gaming.[19] Leydon had announced in March 2018 that MZ was working with Hedera Hashgraph on a distributed cryptocurrency technology called hashgraph, a blockchain alternative.[20] According to Fast Company, Leydon left the company "ostensibly to run Satori", part of MZ's platform business since early 2017, as a spinoff "standalone business" focusing on the hashgraph project.[13][21]

Kristen Dumont, an attorney who had been the company's chief operating officer since 2015, replaced Leydon as CEO.[19] In a July 2018 restructuring, Dumont laid off a large portion of Machine Zone's marketing team, approximately 125 jobs.[22]

In October 2018, TechCrunch named the company the sixth most successful company from Y Combinator.[23] By the end of that year, after hiring Dan Nash as its chief financial officer, MZ had raised around $720 million in a new round of funding, with investors including JP Morgan, Anthos Capital, and Menlo Ventures.[13]

MZ released one game in 2018, World War Rising. Described by Pocket Gamer as "effectively a reskin of the developer's previously successful 4X strategy games", the new title offered a military-themed interface depicting armies from World War I to the modern era.[3] The game, which was reportedly "stealthily launched" sometime before the end of August 2018, was identified as a product of Mobile War LLC rather than MZ.[3] While Dumont confirmed MZ's ownership of the game during a tech conference in November 2018, World War Rising did not appear on MZ's website until at least May 2019.[3]

In March 2020, MZ published 'CrystalBorne', and in May was acquired by publishing-platform companyAppLovin for approximately $500 million, which represented a large decline in value and a loss for many investors.

Marketing
Kate Upton in 2014, promoting Game of War in costume as Athena.

Approximately $40 million was spent on marketing Game of War: Fire Age in 2014.[24] Along with advertisements in digital and social media, television commercials were produced featuring model Kate Upton as the goddess Athena. The ads highlighted Upton's sex appeal as she led battles in fantasy settings that were compared to those in Game of Thrones.[25] The spots were introduced in the United States during an NFL Thursday Night Football game and were aired prominently during Super Bowl games and other sports events.[25][26]

Singer Mariah Carey replaced Upton, in late 2015, as the face of the game's advertising campaign.[27] In September 2015, the first commercial featuring a brief clip of Carey as Athena was previewed by TMZ.[28] Carey's agreement reportedly included "a seven-figure pay check; a 30-second commercial filmed by Alan Taylor ... and the use of her music in future promotional material."[27]

In February 2016, MZ spent an estimated three times more on television advertising than any other mobile gaming company, including spending an estimated $10.7 million on 3,265 airings of its Super Bowl 50 ad for Mobile Strike featuring Arnold Schwarzenegger.[29]

CEO Kristin Dumont, in a November 2018 interview with Fast Company, signaled a change in marketing strategy that would be unlikely to include future Super Bowl advertising.[19] Dumont stated a preference for marketing with "more measurable results", and called television advertising "kind of a rip-off, to be honest".[19]

Game revenue and player purchases

In August 2015, a former employee of Machine Zone was arrested and charged with stealing proprietary data that included "player spending habits broken down by time, location, age and other characteristics" which showed, for example, "which in-game items generate the most revenue and where in the game players often quit."[30] The monetary value of the data was linked by the Wall Street Journal to the fact that "about 3% of mobile-game players buy virtual goodies, such as extra turns and special powers. Most spend only a few dollars a month, while a tiny fraction known as whales – a name derived from casinos – plunk down $50 or more a month."[30]

Analytics by Slice Intelligence indicated that Game of War's paying players each spent an average of $550 in 2015 on its in-app purchases, compared to $87 spent by the average player of mobile free-to-play games.[31][32] In March 2017, the company defeated a class action lawsuit on the basis that players who had sought damages for lost "virtual gold" at a virtual casino in Game of War "did not lose real money", according to the court.[33][34]

Products

References
  1. Macmillan, Douglas; Demos, Telis (July 16, 2014). "Newest Hit-Game Maker Machine Zone Nears $3 Billion Valuation". Wall Street Journal. Archived from the original on 2016-04-03.
  2. Takahashi, Dean (November 11, 2015). "Arnold Schwarzenegger stars in Machine Zone's modern warfare game Mobile Strike (updated)". VentureBeat. Archived from the original on 2015-11-13.
  3. Chapple, Craig. "Machine Zone's latest 4X strategy game World War Rising is a top 100 grosser". Pocket Gamer. Steel Media. Archived from the original on 2019-10-03.
  4. Takahashi, Dean (October 16, 2015). "An interview with Gabe Leydon, Machine Zone's man on the Iron Throne". VentureBeat. Archived from the original on 2015-11-20.
  5. Jordan, Jon (April 5, 2016). "Updated: Machine Zone spins out big data tech RTplatform as separate division". Pocket Gamer. Steel Media. Archived from the original on 2016-04-08.
  6. Rubenstein Associates; MZ (May 11, 2016). "MZ Appoints Nasi Jazayeri President of Platform" (Press release). Palo Alto, Calif.: Business Wire. Retrieved 2016-05-27.
  7. "Top Grossing All Devices – Games: All Countries". Think Gaming. April 8, 2016. Archived from the original on 2016-04-08.
  8. De Vere, Kathleen (March 27, 2012). "Addmired nets $8 million Series B, changes name to Machine Zone". Social Times. AdWeek. Archived from the original on 2016-04-04.
  9. Kolker, Robert (March 5, 2015). "One Nerd to Rule Them All". Bloomberg Businessweek. Archived from the original on 2016-03-25.
  10. Hendrickson, Mark (March 14, 2008). "Y Combinator Demo Day Roundup for Spring 2008". TechCrunch. Archived from the original on 2016-03-17.
  11. Velazco, Chris (March 27, 2012). "Freemium Game Dev Addmired Rebrands as Machine Zone, Lands $8M from Menlo Ventures". TechCrunch. Archived from the original on 2016-03-22.
  12. Rubenstein Associates; MZ (April 4, 2016). "Machine Zone Rebrands as MZ and Launches Standalone Tech Platform" (Press release). Palo Alto, Calif.: Business Wire. Retrieved 2016-05-26.
  13. Schubarth, Cromwell (December 6, 2018). "Machine Zone, the Palo Alto unicorn behind Game of War, hires Wells Fargo vet as CFO". Silicon Valley Business Journal. Retrieved 2018-12-09.
  14. Takahashi, Dean (April 9, 2016). "CEO Gabe Leydon on why Machine Zone renamed itself and launched its real-time cloud platform". VentureBeat. Archived from the original on 2016-04-12.
  15. Marshall, Matt (April 4, 2016). "Machine Zone launches cloud platform to process millions of real-time interactions". VentureBeat. Archived from the original on 2016-04-06.
  16. DiChristopher, Tom (May 26, 2016). "Machine Zone is using video game tech to make your city's buses run better". CNBC. Archived from the original on 2016-05-26.
  17. Rubenstein Associates; MZ (November 7, 2016). "Machine Zone and Square Enix Announce Partnership to Develop FINAL FANTASY XV Mobile MMO Game" (Press release). Palo Alto, Calif.: Business Wire.
  18. "Machine Zone's Final Fantasy XV mobile game revealed to be Final Fantasy XV: A New Empire". Gematsu. March 31, 2018. Retrieved 2017-07-19.
  19. Newman, Jared (November 7, 2018). "How the maker of mobile hit Game of War unpivoted itself". Fast Company. Archived from the original on 2018-11-21.
  20. Takahashi, Dean (March 13, 2018). "Hedera Hashgraph and MZ unveil next-generation blockchain alternative". VentureBeat. Archived from the original on 2019-01-01.
  21. Marshall, Matt (April 4, 2017). "MZ launches Satori, an open platform with 5.5 million real-time data feeds". Archived from the original on 2018-12-08. {{cite journal}}: Cite journal requires |journal= (help)
  22. Grubb, Jeff (July 11, 2018). "Game of War developer MZ layoffs strike marketing team". VentureBeat. Archived from the original on 2019-02-12.
  23. Clark, Kate (October 17, 2018). "These Are the Most Successful Companies from Y Combinator". TechCrunch. Archived from the original on 2019-02-18.
  24. Tassi, Paul (November 14, 2014). "A $40M Ad Budget Buys 'Game of War: Fire Age' Kate Upton". Forbes. Retrieved 2015-02-20.
  25. Trinh, Brian Vinh Tien (February 1, 2015). "Game of War's Super Bowl Ad Is Pretty Much Kate Upton in Game of Thrones". The Huffington Post. Canada. Retrieved 2015-02-20.
  26. Monllos, Kristina (November 13, 2014). "Game of War: Fire Age Launches First Global Campaign, Starring Kate Upton". AdWeek. Retrieved 2015-02-20.
  27. Cox, Jamieson. "Mariah Carey is replacing Kate Upton as the new public face of Game of War: Fire Age". The Verge. Retrieved 2015-06-13.
  28. "Game of War with Mariah Carey". TMZ. September 14, 2015.
  29. Servideo, Zach (March 5, 2016). "Machine Zone's Mobile Strike tops Far Cry: Primal in Super Bowl month ad spending". VentureBeat. Archived from the original on 2016-04-06.
  30. Needleman, Sarah E. (August 26, 2015). "Why 'Game of War' User Data Is So Valuable". Wall Street Journal. Archived from the original on 2015-12-25.
  31. Grubb, Jeff (April 1, 2016). "Game of War's paying players spent an average of $550 on its in-app purchases in 2015". VentureBeat. Archived from the original on 2016-05-06.
  32. Stanton, Taylor (March 31, 2016). "Hardly pocket change: mobile gamers spend an average of $87 dollars on in-app purchases". Slice Intelligence. Archived from the original on March 31, 2016. Retrieved May 27, 2016.
  33. Grzincic, Barbara (March 17, 2017). "Machine Zone defeats gambling-loss class action in 4th Circuit". Westlaw News. Reuters. Archived from the original on 2018-12-11.
  34. Queenin, Christopher (March 20, 2017). "A real win for a virtual casino: game developer avoids class action liability under gambling loss recovery statute". Nixon Peabody. Archived from the original on 2019-02-18.
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