Johannes Heinze is MD International at AppLovin.
It doesn’t matter how good your mobile game is if you cannot secure funding in order to bring it to life. While many games developers have the passion and experience to build excellent games, they may not have the skills or experience to find funding.
Sure, you can bootstrap your game if you want to stay small, but those looking to launch a game in the top charts will have to find funding.
One of the biggest struggles for new mobile games devs is coming up with a solid business strategy. Even if your game is incredible, you’ll need to convince investors how you will make their money back, and then some.
This requires planning, predictions, and forecasts where data can be pulled from various sources. For example, you could use soft launch data as part of your business pitch to demonstrate your successes.
You’ll also need to have a good grasp of your business’s cash flow. What are your assets? How will you reinvest in the business? How will you buffer against future financial challenges? These are all questions you’ll have to answer when pitching to venture capitalists, banks and others.
Additionally, you’ll have to think about how to protect your intellectual property and all of the legalities surrounding starting a business.
Seeking venture capital
One of the most common ways to get funding for your mobile game is to seek venture capital. While there is a lot of venture capital out there, it’s difficult to secure if you don’t do your research.
Before seeking funds from VCs, you must do your homework. Does the VC already have a stake in a similar game? Do they even fund mobile games companies?
You’ll also want to think about how much control you want to retain over your app and business. Some venture capitalists will require a certain amount of equity in your company before they invest so do your homework and choose a VC that shares your vision.
Look to your local government
One area that often gets overlooked is government support and grants. Some governmental organisations offer technology companies funding or tax breaks (UK games companies can claim back 20 per cent of production costs) in order to entice businesses to set up shop in their city.
In November 2017, TechCrunch reported that the UK Budget is investing more than £500 million in tech companies. While the UK Games Fund is relatively small, the Government aims to put £1 million more into the fund each year until 2020, giving mobile games devs an opportunity to seek early-stage funding.
UK developers should also look into the Innovate UK fund, which offers help to technology and science companies that it thinks will help drive future economic growth. Since 2007, the Innovate UK Fund has committed over £1.8 billion to helping fund businesses and claims to have created nearly 70,000 jobs.
Find local games trade organisations
In addition to looking for government support, there are often local trade organisations that can help your business get off the ground. For mobile games developers, there’s UKIE, which helps represent businesses of all sizes who are working in the online, mobile apps, console, PC, esports, VR and AR spaces.
There’s no one-size-fits-all formula for getting funding and your road to success may require a combination of several funding methods.
UKIE supports innovators and developers by making sure they have “the right economic, cultural, political and social environment needed for businesses to thrive,” according to its website. It achieves this by giving practical support, advice and guidance, and will put developers in touch with people and companies that can help grow their business.
There’s also TIGA. This trade organisation is similar to UKIE in that it helps represent the business and commercial interest of games developers in the UK and Europe.
Go the publisher route
Last but not least, there’s always publisher support to help fund your mobile game development. This is by far the most popular and well known method of getting funding for games. In fact, looking at App Annie’s list of the top 50 free games on iOS shows that most of these games use publishers.
2016 was the first year ever that mobile games revenue exceeded both PC and console revenue, according to a DFC Intelligence report. This is unsurprising as many more people carry their smartphones with them than gaming consoles or PCs.
Mobile games are expected to bring in $65 billion in revenue by 2020, so there are no signs of growth slowing.
As a result, big publishers like EA are taking notice and putting more resources into mobile games.
According to PocketGamer.biz, EA posted revenues of $1.45 billion in Q1 FY18 with its mobile games generating $637 million of that revenue over the last financial year.
EA didn’t outline future plans for its mobile games but did mention that its live services across all platforms is quickly becoming one of its biggest areas of revenue.
If you do decide to go after publishers to get your game funded, make sure to research if a publisher is the right fit. Does the publisher currently have similar games to yours in its portfolio? How will your game differentiate itself? Is a particular publisher known for working with indie developers? These are all questions you’ll have to ask before pursuing a publisher.
Wrap-up
There are many ways to get your mobile game funded and it’s up to you to decide what makes sense for your business. Even if you have a compelling game, you’ll have to defend your company’s business strategy in order to convince VCs, publishers and others why they should invest in you.
There’s no one-size-fits-all formula for getting funding and your road to success may require a combination of several funding methods.
Don’t be afraid to reach out and make connections whenever possible and do your homework on the mobile games market as well as the publishers, organisations and VCs you want to seek funding from.
