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Mantra To Successful Gaming Startup
Getting the right product is the first and foremost step in creating a successful gaming startup
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A clear plan of implementation and success path is essential for any business, more so for gaming startups. It can help map out the specifics of the business and discover some unknowns. A successful gaming startup is a mix of few aspects. We will analyse some of the winning factors to run a startup, and also the inevitable challenges.
We have seen many of the gaming startups being unsuccessful. The biggest reason for the failure of most startups is not being able to achieve product-market fit. For a good market fit, two methods are important for online gaming. The first one is to create new games and evangelize them. The products should be unique with less competition in space. For instance – Angry Birds and Temple Run. This has challenges like high risk of failure, high initial markets spend to get to a critical mass of users, and unknown revenue potential.
The second one is to create games from existing games that are popular in the offline space. There is an opportunity particularly when the awareness for the product has already been established offline. For instance, games like rummy, poker, and fantasy cricket. Clarity on the revenue model is essential. The date on transactions in the offline gaming market is well-documented and serves as a good indicator of the online revenue potential.
Under the second category, there are few challenges like too high competition and high churn. Since product idea is not unique, every company has access to the same product blueprint. With so many alternatives in the market, there will be high churn with customers trying out different options leading to increased perpetual business costs on marketing and retention.
Branding & Acquiring Users
Initially, to achieve critical mass, it is important to be frugal with marketing spends. Look at the innovative ways to promote your brand. Think of the Zoozoo campaign by Vodafone or Amul’s girl Shoba. The campaigns were cost-effective and had a strong recall. It is very important to identify the monetisation potential of your customers and potential market share. This will be the basis to justify advertising costs and strategies for your business. Until you reach a critical mass of users, it is very important to grow organically through customer referrals.
In an online business, tech is a winning factor in business funnel efficiency and product quality. Prohibitions in Google Play make gamers download the games from outside sources, creating loss of attribution and an un-estimated RoI on marketing spend. A user goes through the cycle of discovery to acquisition, engagement, retention, churn, and then reactivation. At each stage, businesses need to engage with users and invest in the right tools. On the product side, gaming application is a challenging online product. Gaming has the highest ratio of user inputs per minute. Investing in talent with skillsets, the right technology and marketing makes investing capital efficient with the reduction in costs of learning from failures in gaming startups. The right investor would add value while identifying gaps. He can mentor growth, identify risks, help in branding and networking to leverage further fundraising.
Success or failures in the gaming industry need a balance across product, market space, tech edge, and most of all, seasoned investors who can weather the storm
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.