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Mastering Retention Podcast

Ep.79: Tips for Financial Success

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https://www.youtube.com/watch?v=9nBx-O2WAyI⁠

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🎙️ Mastering Retention Podcast: Financial Insights for Game Development with Anina Selve

Host: Tom Hammond, Co-founder of UserWise

Guest: Anina Selve, Chief Financial Officer at Next Games (recently acquired by Netflix)

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Introduction

👋 About Anina Selve:

Originally trained as a chef and worked in the restaurant industry.

Transitioned into finance and business consulting.

Holds a degree from the University of Wisconsin-Madison.

Joined Next Games first as a consultant, then became CFO.

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Journey into the Gaming Industry

🍳 From Culinary Arts to Finance:

Started in the restaurant industry, which faced frequent bankruptcies.

Decided to learn about business to eventually start her own restaurant.

Realized that corporate finance was more advanced in North America.

📚 Education and Career Shift:

Attended business school in Helsinki before moving to the U.S.

Studied corporate finance at UW-Madison's Grainger School of Business.

Returned to Europe due to visa limitations in the U.S.

🚀 Entry into Startups and Gaming:

Worked in startup consulting, focusing on tech and medical companies.

Introduced to Next Games as a client around 2013-2014.

Joined Next Games to build their finance and business intelligence departments.

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Founding a Game Studio: Financial Considerations

🎯 Defining Your Goals:

Importance of understanding why you're starting a company.

Differentiating between a lifestyle business and aiming for a billion-dollar enterprise.

Aligning funding sources with long-term business goals.

💰 Choosing the Right Investors:

If aiming for massive growth, partner with investors who can provide ongoing capital.

For indie or smaller studios, be cautious with VC funding due to expected returns.

Consider investors like major game publishers for large-scale ambitions.

📝 The "Why" Behind Your Game:

Emphasized the need to understand the core motivation for your game's existence.

Discussed the "Tower of Wants" concept to identify deep player motivations.

Recommended challenging yourself to answer fundamental questions about your game.

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Bootstrapping and Funding

🚫 Is Bootstrapping Feasible?

Acknowledged that bootstrapping a mobile game studio is challenging in today's market.

Investors now often require a playable prototype or initial metrics before funding.

Game budgets have increased significantly, making self-funding difficult.

🤝 Aligning with Co-founders:

Compared choosing co-founders to a marriage, emphasizing alignment on key issues.

Encouraged discussing long-term goals, exit strategies, and potential challenges upfront.

🎥 Tailoring Your Pitch to Investors:

Importance of researching potential investors and understanding their focus areas.

Customize your pitch to highlight aspects that align with the investor's interests.

Use examples of past investments to show how your company fits their portfolio.

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User Acquisition and Funding Strategies

📈 Challenges of Performance Marketing:

Discussed the rising costs of user acquisition (UA) and the impact on smaller studios.

Highlighted that payback periods for UA investments have extended from months to years.

Noted that only large companies with substantial resources can sustain aggressive UA strategies.

💡 Alternative Funding Options:

Examined UA funding solutions like factoring and revenue-based financing.

Warned about high fees and the risks associated with such funding methods.

Recommended using these options cautiously and primarily as short-term solutions.

🌐 Growth Hacking and Viral Marketing:

Explored strategies used by companies like Tinder and Facebook to grow without heavy UA spend.

Emphasized designing games with built-in viral mechanics to encourage word-of-mouth.

Cited examples like Pokémon GO and Supercell games that grew organically or with minimal UA.

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Building Virality into Games

🌍 Case Study: Our World

Shared insights from Next Games' title Our World, which had built-in virality through map-based features.

Discussed challenges faced when the game became too crowded, affecting player experience.

Highlighted the importance of balancing social features to enhance, not hinder, gameplay.

🗣️ Encouraging Player Engagement:

Stressed the need to make it easy and rewarding for players to invite friends.

Suggested integrating social features early in the game design process.

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Tips for Improving Player Retention

🔑 Anina's Advice:

Compared retention to eating a bag of candy—you decide quickly if you like it.

Emphasized the importance of dissecting day-one retention to understand player behavior.

Recognized that while live events and content are important, understanding initial engagement is crucial.

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Conclusion

🌟 Final Thoughts:

Reinforced the idea that games are a business and require careful financial planning.

Encouraged aspiring game developers to think critically about funding, investor alignment, and game design.

📞 Connecting with Anina Selve:

LinkedIn: Reach out to Anina for questions or further discussion.

Open to messages but may take some time to respond—patience is appreciated.

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