i-Jet, a social games development and publishing company is on a verge of a bankruptcy. Its CEO Alexey Kostarev said in an interview that they are selling a number of their game development studios, but “he is not worried, because they are profitable and can stand on their own”. He also admitted that the company hasn’t paid salaries to its employes for several months. These words coming from the CEO speak for themselves.
i-Jet used to be a famous company, a typical success story, widely covered in the press including Forbes (published in Russia) and Vedomosti – the leading Russian business newspaper created by the Financial Times and The Wall Street Journal. One of their first games “Happy Farmer” brought them over $20 millions in the first year ($10 million after the social network cut).
The company was said to be estimated at $100 million at its peak, but apparently the owners never sold for different reasons.
Alexey Kostarev blames the saturated market: there are just too many games. The average time a user plays a game reduced from 2 months to 2 weeks. That hurt both DAU and ARPU. The marketing costs skyrocketed. The costs of development of a game increased tenfold. This sounds like a helluva market. Zynga, what are you waiting for?