Zynga's Lou Castle On Why InstantAction Died

By James Brightman

InstantAction was a browser-based games platform with tremendous potential. The company faced steep challenges, however, and was ultimately shut down by parent company IAC late last year. Long-time industry veteran Lou Castle originally took up the CEO position in August 2009, completely overhauling the business model, but InstantAction simply wasn’t making money fast enough for IAC. GarageGames and the Torque engine thankfully will see new life outside of IAC, but Castle wishes he had more time with InstantAction.

Speaking to IndustryGamers, Castle, who was recently hired as VP of Studios at Zynga, lamented, “I think it would have helped if we would have been given another six months or so. We could have really lit the world on fire, but I respect the fact that the people writing the checks have the control over whether they want to keep writing them.”

He explained, “I think the concise answer to what happened was there were a substantial number of technological improvements that needed to be undertaken, quite a wide range of new functionalities that needed to be addressed for social networks. We had started to turn that ship, a big heavy cruiser going in a certain direction, and when I came on board I changed the course. I would say we were changing course, and we were definitely making strides, but we weren’t changing fast enough, as it were. So, we became… I don’t know if victim is the right word, but we certainly were affected by the fact that it was quite an expensive operation. We still had quite a ways to go, six months to a year, before we would be completely on track.

“I can’t blame IAC, which put a ton of money into the project. At that point in time they just said it would just be better for them to discontinue operations and take the write-offs, because they had a strong year, and not continue to play in a space that they weren’t comfortable in. They’re not EA, they’re not a Zynga; they’re not a group that’s comfortable spending the kind of overhead to keep over one hundred people working on a project, with no real assurance of success, because you’re doing something different. You can’t say, “this is what’s going to happen.” That’s the quick answer.”

Although on the surface, it didn’t look like InstantAction was heavily supported by publishers, Castle insists that they actually were in the process of securing great support. “We had a lot of people interested. If you want to talk about the strategy and direction we were going, I think a lot of people recognise it was a very prudent way to go, a great transition from one technology base to another,” he said. “I would say from the strategy point of view, we were very close to a 5/5 stars. On relationships, we were an easy 4/5; we had a lot of people ready to go. Business development was doing a great job of lining up the meetings with our publishing partners, as well as our music industry partners.”

He continued, “At the end of the day, our technology just wasn’t getting there fast enough. It was one of those hard things, because this is an incredibly fast moving space. Most companies start with some small core idea, then they build on it. InstantAction was a 150-person company when I came on board. They had a strategy of free to play ad-supported games, which I felt was a bad strategy, and I mean a demonstratively bad strategy. I don’t think very many people can survive on that. Rather than go to a more transaction model, like everybody else is, we set a very bold course to bridge downloadable games and browser-based games. That was literally trying to jump fifteen steps ahead, if you will. It’s understandable that it took a lot of time and energy, but it’s also understandable when someone is writing a lot of burn money every month and they don’t want to do it anymore. It’s difficult to argue.”

Ultimately, Castle provides some important business lessons for other entrepreneurs: “I’ve done this at EA, too. When I was at EA, I ran Blueprint and we had a couple of projects that were never announced. You just had massive burn rates on them. I guess I’ve been in the business long enough that a lot of people wish, hope, I don’t know, lie, cajole… they might do a lot of things to keep their project going. I’m pretty honest about it, because at the end of the day, if you’re really direct with what it’s going to cost, what it’s going to take and what the opportunities are, either the financiers and the company you’re with has the stomach to do it or they don’t. If they don’t, it’s better to move on. My experience tells me chasing the next headline just ends in heartache for everybody.”  

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.