October 26, 2017
Daniel Starr made a name for himself as a Blockbuster executive, where he led a team that transitioned the movie rental behemoth from a brick-and-mortar chain to a digital-first company. Blockbuster’s marketing group refocused on digital marketing, especially programmatic buying and experimented with its own data, platforms and techniques to market itself. Now Starr is building the “Netflix of games,” GameMine, which pulled in $20 million in funding earlier this year.
Enterprise Sales Remain the “Kingmaker”
In a field crowded by Zynga–which was noted as an acquisition target–Scopely, Jam City, Electronic Arts and King Digital, among others, GameMine is seeking growth from major enterprises that can “move the needle,” says Starr. Following its latest funding round, GameMine signed a distribution deal with Vodacom that brings over 550 titles in GameMine’s content line up. The firm is making a bid to be a “Netflix”, buffet-style offering to consumers, whether they’re casual or hardcore gamers. Its subscription service offers a rotating menu of ad-free, unlocked games. Through its partnerships with large mobile carriers, the company’s users pay for games on their regular cell phone bill rather than directly through a credit card.
Is the Netflix of Gaming a Thing?
Attempting a “Netflix model” can prove to be useful in the mobile gaming market since mobile games are not typically the type of game you “beat.” Nielsen’s 2016 study on more granular mobile game success showed practically every title fatigues its users–earlier than most would expect. The game content demand curve favors a slowly rotating title model, much like Netflix and Spotify have adopted for film and audio content, respectively. Nielsen’s study also shows that when people get bored of the current game, they will start playing a new one. On GameMine, Starr says his company’s data shows that users “stay on the subscription and keep playing different games” as opposed to fatiguing to a halt on the game they paid for. iOS and Android store buying patterns show that with one-off purchases users stop a subscription game altogether, and in other instances depart from gaming entirely for a period, in between purchases.
Does GameMine have the early makings of another significant platform play? It’s largest venture capital shareholder thinks so, but it is curiously is not completely independent of its executives. In an Axios article, Dan Primack revealed that Palisades Venture Capital–the largest outside stakeholder in GameMine, is Dan Starr’s own VC firm.
How Will Game Developers Respond?
The company claims game developers benefit by working with GameMine because they acquire or license each game. Starr explains that developers “continue to profit off their own app store listing. GameMine changes the name and rebrands…like a white label arrangement.” Barely available in the US, GameMine’s biggest markets are Western Europe and Africa, with the latest deal in South Africa with Vodacom, a public, big name. Given that countries outside the US average three to four mobile carriers, GameMine has a potential partnership market with hundreds of carriers, including country-specific sub-brands and has only paired with less than five percent of those. Carriers are frustrated with the platforms that they build, as traditional game platforms hijack what carriers see as revenue that should, in part, be theirs. Under GameMine’s regime, mobile carriers earn a percentage of each transaction. Given the sore point that the company aims to capitalize on requires just a few, big enterprise sales, the GameMine name could have legs.
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