Category: Web

I’m sad. The makers of Scrabulous have decided to disable their game for all North American users. Sniff.

This is the result of a struggle with Hasbro (HAS) and a suit filed against the Brothers Agarwalla—Scrabulous’ founders—for violating copyright law under the Digital Millennium Copyright Act.

Facebook Scrabulous vs Hasbro Scrabble

Fans of Scrabulous are now in an uproar. Don Reisinger of Masable says this move makes Hasbro look stupid. The official SCRABBLE® Facebook app is littered with comments like, “Boo, hiss. Way to alienate your corporation!” and “I’m going to extend my boycott to all Hasbro toys, etc.” And a campaign has been started on The Point, calling for Hasbro to work with Scrabulous instead of shutting it down (though there only 6 members as of this post).

This has led to a great deal of negative PR, especially in the blogosphere. At a quick glance, I see a “RIP Scrabulous“, a “No, I Do Not Want to Play Scrabble“, and a “F U, Hasbro. F U.”

On the other side of the equation are people defending Hasbro’s actions. Or at least raising the issue of copyright infringement as a business benefit: is it “worthwhile to go after pirates, thieves, and copyright-infringers, or… simply let them be and consider it free advertising”, writes Sarah Perez of ReadWriteWeb.

And… I don’t see that many other bloggers supporting Hasbro in my Technorati search. Oh well.

Let’s Make a Deal

All of this drama makes you wonder why Hasbro didn’t just offer to buy Scrabulous, right? Well, apparently they did. While Hasbro and Electronic Arts (ERTS) collaborated to build the new SCRABBLE® app, RealNetworks (RNWK)—another company given the rights to create online Hasbro games—has been working with Scrabulous to “bring the official Scrabble game to Facebook users”, writes Heather Timmons of the NY Times. (Funny, I thought that’s what Hasbro and EA just did.) Furthermore, according to Peter Kafka of Silicon Valley Insider, an offer has been put out to & rejected by the Scrabulific Duo:

The hold up? Money. A source familiar with the negotiations say Rajat and Jayant Agarwalla want too much.

What’s the gap? The brothers say they’re generating $25,000 a month, or $300,000 a year in revenue. A 10x-20x multiple on that would make Scrabulous worth $3-$6 million, but for argument’s sake let’s say they’ll have a hockey stick growth curve, and that their game project could be worth more than $10 million.

Sound fair? Maybe. But our source says the brothers want a “multiple of several times that” $10 million, and the four corporations they’re negotiating with think that’s ridiculous.

If that’s true, then that’s perhaps a bit optimistically presumptuous of the Brothers Agarwalla. $10M is a tidy sum for what is technically a copyright infringement.

Feeding Your Scrabble-Lust

In the meantime, to satisfy your Scrabble fix, you’ll need to add the new SCRABBLE® Facebook app (or the SCRABBLE beta Facebook app; I’m not quite sure which one is the official official one). Unfortunately—oops—the app isn’t working. Instead, you’re slapped with a big fat “We’ll be back up shortly. We’re working on some tech problems and Scrabble will be ready to play as soon as possible!” message. This isn’t their fault though. Alex Pham of the Los Angeles Times reports that this is the result of a hacker attack. (Perhaps from some die-hard Scrabulous fans?)

A No-Win Scenario

All of this amounts to a major catch-22 for Hasbro. Fighting against Scrabulous means loads of negative PR and possible damage to their business. Aligning with Scrabulous means setting a potentially damaging precedent to their business. (Yossarian lives!)

The Discussion Boards of both SCRABBLE apps are full of rants and more rants. And just how many pro-Scrabulous Facebook groups are there? Over 500, with Save Scrabulous clocking in at over 47 thousand members so far (including me). Wow.

The Scrabble board game may have enjoyed a surge in popularity due to Scrabulous, though it’s impossible to confirm this since Hasbro isn’t releasing their sales figures. I wonder if those sales will drop with this negative fallout.

However, I totally understand Hasbro’s actions against Scrabulous. If they supported Scrabulous, they may unleash a disastrous tidal wave. Say Hasbro purchased Scrabulous for $10M, this web business formula could have emerged:

1. Build an online version of a popular offline game
2. Gain spectacular popularity
3. ?
4. Sell out for millions
5. Profit

And if you didn’t gain spectacular popularity, the offline game’s parent company would probably just ignore you, like Hasbro has of dozens of Scrabble knock-offs already on the web. Lots of upside for very little downside! Dollars galore!

Either way, Hasbro is sure in a pickle. In that context, I can see why they’d opt to shut down Scrabulous. Months from now, as the public backlash dies down, Facebook users may begin adding the new SCRABBLE apps to quench their Scrabble thirst, and perhaps forget about this whole ordeal. It’s possible. Take jetBlue, for example. Back in February 2007, a severe ice storm took down over a thousand of their flights, leading to a major PR black-eye. Since then, they’ve rebounded from that episode. And if that’s not a great example, take Martha Stewart and the ImClone scandal in 2004. Despite being jailed, she’s back and arguably as strong as ever.

Hasbro could have handled the situation a little smoother though. But I doubt they had a web-savvy/social-media-savvy team of PR specialists on board (and if they did, WTF?). I would have recommended that they reach out to the community in some way. Maybe to solicit suggestions, maybe to implore an understanding. Even if people argued against them, just having a genuine public voice can sometimes earn a lot of empathy. At the very least, it could have softened the blow. This could have also come from Electronic Arts and RealNetworks, the makers of the online SCRABBLE apps.

Personally, I’m bummed as hell that Scrabulous is gone. I had quite a few games going there. I wish a compromise could have been reached, though I wouldn’t have the foggiest how that would have looked.

R.I.P., Scrabulous.

You know what reminds me of that clueless little kid who always gets the joke after everyone else has gotten it, laughed, and moved on to another topic?

Hasbro (HAS) and Electronic Arts (ERTS). (No offense, guys.)

They just announced that they are going to be launching a Scrabble Facebook application later this month. Too bad everyone’s been playing Scrabulous for the last year.

“Millions of Facebook users who have been playing it are unlikely to make the switch,” writes Caroline McCarthy of CNet. “Who says they’ll even notice the presence of the new game?” Too true, too true.

Technically, Electronic Arts is going to be the one actually building this app, since they own the rights to the digital versions of the board game. The rights to the board game seem to be a bit convoluted. While Hasbro owns it here in the US, Mattel owns it elsewhere. Weird.

To be fair, the dynamics of large publically-traded companies make them slower to react to new phenomenon like this. They probably already have a wish list of a thousand things they want to, and need to do. And a Facebook Scrabble game just wasn’t on that list.

That doesn’t change my opinion that they missed a really cool social media marketing opportunity though. They missed it, and a smaller player—Scrabulous—beat them to it.