An Announcement and an Interview About Gaming

Before we get to today’s article, I want to share some news.

Starting in July, we’re going to be adding cryptocurrency recommendations to our research service, First Stage Investor. For those who don’t know, cryptocurrency refers to bitcoin and other digital currencies.

We feel this is a natural extension of our goal of finding the best early-stage investment opportunities.

Cryptocurrencies have a chance to become the world’s new monetary system. Even if there’s only a relatively small chance of that happening, the implications are so mind-boggling that all investors should be paying attention.

Other digital assets, such as “app tokens,” are creating brand-new types of businesses – ones with their own built-in currencies, “gas,” smart contracts and incentive systems.

Stay tuned for more news and educational resources about the cryptocurrency market soon.

In the meantime, email me your thoughts on cryptocurrency at mailbag@earlyinvesting.com. I’d love to hear what you think.

Now on to today’s interview with a mobile gaming expert…

Whale Hunting With John Fanning Jr.

At the tech conference I attended last month, I spent a lot of time talking mobile gaming with John Fanning Jr., CEO and founder of Zelgor. He has deep insights into this fast-growing market and is currently running an equity crowdfunding campaign, so I invited him to do an interview.


Adam: I read recently that the average person spends four hours per day on their smartphone. What are the implications of this astounding number for mobile gaming?

John: Our phones give us access to seemingly infinite amounts of information and entertainment. As a result, holding someone’s attention has become increasingly difficult. But with recent advances in how apps and games make money, this attention has become far more valuable to those who can capture it.

And clearly one of the best ways to hold someone’s attention is with mobile games, which saw $41 billion of sales in 2016.

Adam: I’ve heard that a small number of “Whales” accounts for a very large portion of game revenue. Can you explain this?

John: You are correct. Whales make up a very small portion of the mobile game audience. They’re typically thought to be only 5% to 10% of those who spend money on apps/games, but they account for 50% to 70% of in-app revenue.

Whales are typically players who enjoy playing a game but are looking to progress at a faster rate than those who are unwilling to spend money. Mobile game designers will often put price tags on things like time restrictions (timers) and virtual items in order to give Whales opportunities to spend money.

Adam: How does one land a Whale?

John: Attracting and keeping a new player, whether it’s a Whale or a player who will never spend a dime, I believe ultimately stems from the structure of your game. Nolan Bushnell, the founder of Atari, has an expression:

 “All the best games are easy to learn and difficult to master. They should reward the first quarter and the hundredth.”

What Nolan is speaking to is the need for a game to provide both immediate satisfaction and long-term goals.

If a game is immediately satisfying but doesn’t provide long-term goals, then you’ll see a large chunk of players quit playing your game soon after they download it. In a similar fashion, if your game isn’t fun immediately, than most players won’t be willing to invest the time to discover and achieve the long-term goals.

The way these two elements come together, I believe, is ultimately what determines whether or not a game will find success.

Adam: How much do these Whales spend on games?

John: The freemium model is unique because it enables players to assign their own value to a game. For the majority of users, that value is $0, and that’s okay. Those who are willing to spend money on a mobile game will often spend a few hundred dollars over its life cycle.

The term Whales typically refers to those who are willing to spend somewhere from thousands to tens of thousands on a given game. We’ve even seen outliers who have spent millions on a single game!

Adam: Tell me about your own company and what you’re building.

John: We’ve built a platform that essentially turns the real world map into a massive board game. We’re using this technology to build our first mobile game, called Noob Tubez. It’s about an alien race, called Noobs, that has come to Earth to take over the world.

It’s a massive multiplayer online map-based strategy game where players control small teams of Noobs and compete against other players for territories on the real world map. The Noobs are highly allergic to water, and as a result, they battle for territories by launching fruit at each other in dodgeball-style food fights.

Adam: Why did you choose to use equity crowdfunding?

John: Ultimately, we felt that a big part of what makes games fun long term is the community they create. Our goal is to build a game where players can form their own communities and take over the world together. We thought what better way to start building our community than by letting those players share in our success and help us bring the game to life.


Thanks to John for taking the time. You can learn more about Zelgor on its Netcapital profile.

Good investing,

Adam Sharp
Founder, Early Investing

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