Saturday, 10 October 2015
Synidcate Room's Soshi Games goes into liquidation
Cliff Dennett of Soshi Games tells us here what went wrong - https://www.youtube.com/watch?v=kESsIMYuCwE&feature=youtu.be&utm_source=All+users+regardless+of+certification&utm_campaign=8606123b3c-The+lessons+of+failure%2C+and+coming+back+stronger&utm_medium=email&utm_term=0_a9f559f533-8606123b3c-121775249
This was sponsored by Syndicate Room who helped them raise £286k in 2014. All in all we believe they have lost investors over £1m. The liquidators report will be out next week so we'll let you all know what the damage was.
Interestingly Cliff opened a new business last week. In the video he states he hasnt decided what to do next. The video was published yesterday.
The video suggests that the collapse was a result of rapidly changing circumstances. They didnt see the landscape changing - ? Surely free apps have been here since 2013 at least - probably earlier, so why he didnt know this was a factor before raising money with SR is a mystery. The video is full of contradictions - 'we had a very low advertising budget' he says but then goes to explain that the costs of customer acquisition went up five fold. This Cliff, is the advertising spend.
He didnt anticipate a lot of things that have now sunk the business. His explanation is the business was far more complex than he anticipated, the raw materials were far more expensive than he anticipated, the purchasers would not part with money as he anticipated. Yet he manged to get at least two VCs to fund it. So do VC's really know what they are doing?
We feel that SR have been bold to come out and promote the failure - we got an email from SR's CEO telling us about it. Its all a little too apologist but until we see what the liquidators say we will hold judgement. Maybe he was just unlucky or maybe he's just not that good.
One aspect of this which seems strange is that the filed accounts for the company have no fixed assets - none at all. So the money being piled into building their apps like the Queen game, which under normal conditions would have appeared either as tangible or untangible FA, must have gone through a third party who still owns the rights. It is not possible that this would have been written down to zero. Maybe this will come out in the Liquidators report. Where are they now?