Investors · Mobile Games

Are investors still interested in North American mobile gaming companies?

Marco Santelmo Business developer

May 15th, 2017

I have a colleague who’s always tinkering with ideas for mobile games and he recently asked me about the state of this industry. I had to tell him I’m not really sure. I know that Zynga has lost a ton of money and that, anecdotally, social gaming startups, especially those that aren’t in China, aren’t very buzzy anymore. Is there anyone who knows more about this industry and would like to comment?

Maxine Pierson CEO, MJ BIOTECH, INC.

May 15th, 2017

There is interest if it has proven it can be monetized- is it a business or a hobby. You need $250K PLUS PLUS to do a bare bones rollout

Arild Oldervoll Investor acquiring specialist

May 15th, 2017

Is your colleague asking in regards to getting investors? Or is he asking in regards to the availability of talented team members? If it is about getting investors it doesn't really matter whether the company is based in North America or another region. What really matters in the end is only two things: Will it make enough money and is the risk worth it?

Now, it has gotten a lot harder to get investors to invest in the mobile gaming industry because over the years the competition has increased so massively. Compared to a game for PC or consoles, it is quite common that a low budget game becomes really popular without the advertising that the high budget games normally have (look at Flappy Bird for an extreme example).

This results in that an investor's risk is really high even if it is a good product, so it will take a lot of effort to get them on your colleague's side. It is probably a good idea to start out by developing some smaller and low (or no) budget games that gains some popularity to prove to a potential investor that he knows how to make something that sells.

Karl Schulmeisters Founder ExStreamVR

May 16th, 2017

Mobile Games are largely a suckers bet. You can google the average revenue on them and you will find that it is under $100k: a game that is run on downloaded ad content needs about 2000 downloads/day to earn $40/day. And since games get stale, that means that you are looking at a max of about $20k revenue for a game.

At $100/hr loaded developer costs, that's about 150 man hours of development cost (assuming you want a few $K for marketing) for breakeven (assuming he's doing this for himself).

So if he can grinda game out in 3-4 man weeks of development - then he has a chance at earning what he could at a 9-5 job, but with a lot more risk and fluctuating income