Game genre matters
Genre is more important than ever in mobile gaming. The LTV potential of a game plus the time to achieve positive ROAS play a factor in deciding where the money is, and what type of game to create.
Let Goldilocks help us to illustrate this point in a little mobile gaming fairytale...
Once upon a time there was an ambitious mobile gaming founder called Goldilocks.
She wanted to try building all sorts of mobile games to figure out where the money was in the industry.
First she tried hyper casual. It seemed lots of money was being put into the sector, and she saw some big exits of hyper casual publishers.
But she struggled to find enough hits to publish to keep up the financial returns.
And serving crappy ads to kids didn’t make her feel good about herself.
Then she tried merge games. They seemed attractive because they had long LTVs.
She heard that VCs liked the idea of long LTV games because they could raise massive rounds at crazy valuations.
But all of the VC money was going to go into UA, and her porridge was cold by the time she saw positive ROAS.
Then the VCs came home.
After raising lots of money from eager LPs, they realized something had changed.
All wasn’t right in the market.
After a 15-year bull market in tech, they saw the bears again…
The market was forcing them to count their apples more carefully and not hand them out to just anyone.
Particularly if they knew they were going to get eaten by Facebook, Google, and TikTok, not by the gaming studios they were actually investing in.
So when Goldilocks thought about it, she wanted to get the “just right” approach to deciding which genre she’d build games in.
Not too short, not too long. So she focused on building games where she could achieve positive ROAS in 60-180 days.
Just right.
And she and her investors lived happily ever after (and gave lots of apples back to their LPs!)
The moral of the story
It's important for Golidlocks to build a game where she can make a decent return in a reasonable timeframe. She needs to remember that not all games are created equal.
What she needs to focus on is the "just right" approach.
- It's about balancing a shorter ROAS breakeven with longevity of your game,
- It shouldn't require crazy amounts of equity to scale,
- And she should be able to use debt to provide leverage allowing her to continue to spend in a capital efficient way.
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We offer credit lines that are secured by your app store revenues, so you can access your cash when you need it most . As your business grows your credit line grows with it. Check out how it works!