Ouya
From Invertopedia, the encyclopedia of how things fail
Ouya was a $99 game console that ran on Android[5][6][7]. In 2012 it raised nearly $8.6 million from over 63,000 backers on Kickstarter[1][2], the most of any games project there at the time[2]. It went on sale on June 25, 2013[5], but by 2015 it had about 200,000 users[4], had broken a term of its debt[8], and sold its software and staff to Razer[4]. The store closed for good on June 25, 2019[1].
Contents
The bet
A cheap, open console would pull players and developers away from the big platforms. TechCrunch later summed up the pitch as a way to "open the last closed platform: the TV"[7]. Backers were excited enough to fund it within eight hours of the campaign going live[6], and the money kept coming until it reached 904 percent of the goal[2].
The company took that as demand and raised venture money on top: $15 million in early 2013 from firms including Kleiner Perkins, Mayfield Fund and NVIDIA[8].
What happened
| Jul 10, 2012 | The Kickstarter opens with a $950,000 goal. It is funded within eight hours.[3][6] |
|---|---|
| Aug 9, 2012 | The campaign closes just under $8.6 million, 904 percent of its goal and the top games project on Kickstarter. Pebble still held the overall record.[2][3] |
| Early 2013 | Ouya raises a $15 million Series A from Kleiner Perkins, Mayfield Fund, Occam Partners, Shasta Ventures and NVIDIA.[8] |
| Jun 25, 2013 | General retail release at $99 in the US, UK and Canada, with over 170 games. Some Kickstarter backers still have not received theirs.[5] |
| Apr 29, 2014 | TowerFall, the top-ranked game on the console, has sold only 7,000 copies there. Its maker's real sales came on PS4 and PC.[9] |
| Early 2015 | Alibaba invests $10 million.[8] |
| Apr 28, 2015 | Ouya has tripped a covenant on its venture debt from TriplePoint Capital, and hires bankers to find a buyer quickly.[8] |
| Jul 27, 2015 | Razer confirms it has bought Ouya's software assets and team in an all-cash deal, price not disclosed. Uhrman does not join Razer.[1][4] |
| Jun 25, 2019 | Razer shuts the Ouya store and accounts. Games already downloaded to a console may still work only if they do not check the purchase at launch.[1][6][7] |
The kill shot
Backers paid for the idea of a cheap, open console, but there were no games anyone needed to own it for.
The Kickstarter measured how many people liked the idea, not how many would buy games on it. When the console reached stores it had over 170 games[5], yet a year later the best-ranked of them had sold 7,000 copies on Ouya[9]. Engadget's obituary listed a cheap-feeling controller, performance problems and too few games that held players' interest[6].
With few players buying, there was little to pay back the venture debt. In April 2015 Ouya tripped a covenant with its lender and had to sell fast[8].
Red flags ignored
- Pledges are not purchases. Over 63,000 backers[1] turned into about 200,000 users three years later[4].
- Developers saw the numbers. The console's most popular game sold 7,000 copies there; its maker earned most of its money elsewhere.[9]
- Shipping trouble on day one. Retail units went on sale before every early backer had one.[5]
- Debt on a thin business. Venture debt with covenants left Ouya little time once sales disappointed.[8]
The cost
Backers put in nearly $8.6 million[1][2], and investors $33.6 million[4]; Fortune reported a $15 million round in early 2013 and $10 million from Alibaba in 2015[8]. Razer paid an undisclosed amount in cash, and the hardware was not part of the deal[4].
When the store closed in 2019, owners' accounts were deactivated[6] and any remaining account funds were effectively lost[7].
The inversion
A crowdfunding record measures excitement, not demand. Ask what people will keep using.
What survived
The team and the store. Razer folded Ouya's games, controllers and accounts into its Cortex TV platform[4], and kept the store running until 2019, when it closed it along with the store for its own Forge TV console[1][7].
TowerFall, the console's top-ranked game, went on to be a hit on PS4 and PC[9].
References
- ^ “Razer will officially kill Ouya on June 25”. TechSpot, May 22, 2019. Nearly $8.6 million from over 63,000 backers, Razer buying the software and talent in 2015 for cash, Uhrman not joining, the June 25, 2019 store shutdown and Forge TV.
- ^ “OUYA funding done, nets a huge Kickstarter amount”. Gaming Nexus, August 9, 2012. Just under $8.6 million, 904 percent of goal, top of Kickstarter's games category, behind Pebble overall.
- ^ “Ouya”. Wikipedia. Campaign dates, the $950,000 goal and the $8,596,475 final total (cross-check).
- ^ “Razer confirms acquisition of Ouya's software, tech and dev teams in all-cash deal”. TechCrunch, July 27, 2015. Razer buying the software assets and teams in an all-cash deal, no hardware, $33.6 million raised from investors, about 200,000 users, Cortex for Android TV, Uhrman not joining.
- ^ “Ouya gets its official retail release, but the $99 game console still hasn't reached every early backer”. TechCrunch, June 25, 2013. The June 25, 2013 retail release, $99 price, US/UK/Canada, over 170 games, backers still waiting.
- ^ “Crowdfunded gaming console Ouya will shut down for good on June 25th”. Engadget, May 22, 2019. The Android-powered console, funded within eight hours, the reasons it failed, accounts deactivated, only downloaded games playable.
- ^ “Seven years later, the OUYA is dead for real”. TechCrunch, May 22, 2019. The $99 Android-powered console pitched to "open the last closed platform: the TV," account funds lost after June 25, 2019, the Forge TV store also closing.
- ^ “Exclusive: Gaming startup OUYA needs to find a buyer quickly”. Fortune, April 28, 2015. The tripped debt covenant with TriplePoint Capital, the sale process, the $15 million Series A and its investors, the $10 million from Alibaba.
- ^ “'Towerfall,' OUYA's most popular game, only sold 7,000 copies”. Engadget, April 29, 2014. TowerFall's 7,000 Ouya copies, its PS4 and PC success.