Sunday, March 02, 2008

Scrabulous and Change - At a loss for words

Yet again, a couple of firms have proven that most market leaders lack the short sightedness to accept change and adapt to a new business model.  I am referring to Mattel and Hasbro, the two firms that hold rights to make the popular board game Scrabble.  They are planning to bring legal charges against "Scrabulous", an online version of the board game that has become popular on Facebook.

Clearly, change is beckoning many industries, and, new ventures like Facebook are acting as catalysts for this change.  What we are seeing in this case is probably one of many wars that will shape up how social network platforms will influence new business models.  Already, big media is struggling to cope with sites as YouTube.  Wikipedia has grown into some sort of a directory-driven portal that Yahoo was in its early days, for knowledge.  Look up any topic on any search site, a link to the topic on Wikipedia is sure to pop-up in the first ten.  There is nothing that can comprehensively beat "Wisdom of the Crowds".

My students ask me if social networking will change the world.  A lot of them are even skeptical.  I tell them that is similar to what happened before the Internet boom and the subsequent bust.  An ecosystem is growing and surely the principles that govern Darwinian mechanics will shape up social networking.  There will be few left standing, maybe Linkedin, Facebook, YouTube, and some of the also-rans.  But tons of money will be made, by investors, by entrepreneurs; much more will be lost too.

Surely, nothing is permanent except change.  Those firms that do not accept this, will be at a loss for a lot more than merely words.


Mahima Hada said...

Why shouldn't the makers of Scrabble sue? Don't movies have the rights to their digital/internet versions as well? Isn't that what the writer's strike was all about? If an online game is an adaptation of a board game, then the patent holders of the board game have the right to some proceeds - not all, but some.

Girish Mallapragada said...

Yes, point well-taken. However, what you suggest is one alternative strategy and history has only shown that firms that have tried to protect their monopoly have failed to succeed in the long-run. Change in inevitable, and firms that actively embrace it and figure out proactive ways of dealing with the change have survived. The ones that sue seldom last long.

Mahima Hada said...

A proactive way of dealing with this would be to create a method to share the proceeds - whenever they actually accrue to Scrabulous. Or simply license it to digital-version makers. Both have issues - but the physical and digital world need to resolve this. And maybe, suing to share proceeds is the way. Maybe not.