Ouya

What did it do?

Ouya was a small, cube-shaped, Android-based games console that plugged into a television. Every unit could be used as a development kit with no licence fee, and the hardware could easily be opened up and modified. Games on the platform were initially required to offer a free-to-play portion.

Why did it shut down?

Sales stayed weak and game developers did not embrace the platform; even TowerFall, the console's most popular game, sold only 7,000 copies on Ouya. An incentive fund set up to attract exclusive games became mired in controversy over dubious backer profiles. The console sold around 200,000 units in total and the company ran into financial trouble. A $10 million investment from Alibaba in early 2015 did not save the situation, and in July 2015 the company wound up the business by selling its software assets to Razer.

The story

Launched on Kickstarter in the summer of 2012, the campaign passed its $950,000 target within eight hours. Started by Julie Uhrman, the Ouya project promised a cube-shaped, $99, Android-based games console designed by Yves Béhar: no licence fee, every unit also a development kit, and hardware that could be opened up and tinkered with using an ordinary screwdriver.

The campaign closed on 9 August at $8,596,475, 904 per cent of its target. Ouya went on record as the fastest project on Kickstarter to that date to pass a million dollars. Units began shipping to backers in March 2013 and reached shops at $99 in June 2013. The requirement that every game on the platform include a free trial or a free-to-play portion was a choice that set the console apart from the traditional games world.

The excitement did not translate into sales. In its pre-release review Engadget praised the device's openness but did not see it as a good gaming platform. Developers showed little interest either: in April 2014 it emerged that TowerFall, the console's most popular game, had sold only 7,000 copies on Ouya. The “Free the Games Fund”, launched to attract exclusive games by matching Kickstarter campaigns' funding, became mired in controversy over a small number of high-value accounts in the first campaigns that had never backed any project before. The console sold around 200,000 units in total.

In January 2015 a $10 million investment from Alibaba offered brief breathing space. In April 2015 reports emerged that the company was urgently seeking a buyer. In July 2015 Razer bought Ouya's software assets, content library and team; hardware production was halted and Uhrman left the company. Razer shut down the store and account services on 25 June 2019; many apps that needed to connect to the store stopped working after that date.

Ouya shows that crowdfunding enthusiasm does not mean winning both sides of a platform, players and developers alike. A cheap, open device can attract attention; but a store where developers cannot make money leaves players with nothing to play either.

Lessons for founders

• Do not treat crowdfunding enthusiasm as proof of demand; measure how often those who pre-ordered actually use the product.
• If you are building a platform, work out the revenue maths for developers from the start; a few thousand sales per game will keep no one on the platform.
• In hardware, the first wave of reviews leaves a lasting mark; think twice before sending an unfinished pre-release version to the press.

Sources

1. Ouya (Wikipedia)
2. Razer Confirms Acquisition Of Ouya's Software, Tech And Dev Teams In All-Cash Deal (TechCrunch, 2015-07-27)
3. Ouya will be shut down for good on June 25th (The Verge, 2019-05-22)
4. 'Towerfall,' OUYA's most popular game, only sold 7,000 copies (Engadget, 2014-04-29)

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