952017 Tapinator The Mobile Gaming Startup Building Your Favorite Franchises

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Tapinator The Mobile Gaming StartupBuilding Your Favorite Franchises

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Entrepreneurs AllThingsMobile

MAR 30 2017 1050 AM 2000

Tapinator The Mobile Gaming Startup Building Your Favorite Franchises

Julian Mitchell CONTRIBUTORI cover entrepreneurs and startups disrupting industries FULL BIO Opinions expressed by Forbes Contributors are their own

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The gaming industry grew to a market worth of $996 billion globally in 2016 with mobile becoming the primary focalpoint for developers looking to engage an active millennial audience Last year mobile gaming generated an estimated$369 billion marking a 213 revenue increase from 2015

Undoubtedly the most fascinating case study showing this rapid growth was the success of mobile gaming phenomenonPokeacutemon Go which tallied up an astonishing $950 million in revenue and over 500 million downloads within its firstyear One key component to the gamersquos record-breaking run was the ability to be seamlessly woven into the lifestyle ofusers organically pushing people to be active and obsessively social Noting this a 2016 report revealed that Pokeacutemon Gousers collectively walked over 87 billion kilometers playing the game Seeing the array of changing trends and a massiveopportunity for innovation within the space one startup emerged and quickly claimed a spot at the center of a boomingmarketplace

Founded in 2013 Tapinator is a leading mobile gaming company successfully creating over 300 mobile gaming apps foriOS and Android Their experienced team of developers strategists and product specialists have established a provenexpertise in building scalable quality gaming products across categories Bringing a quantitative approach to theindustry Tapinator uses a proprietary set of development processes contingent upon gaming category estimated playerretention and projected profitability

The startup has raised $22 million in funding continuing to test new technologies while experimenting with the shiftinto virtual and augmented reality

I spoke with Tapinator CEO Ilya Nikolayev about the vision behind his company how to build scalable gaming productsand his plans to bring a mass production approach to the industry

What was the specific void or opportunity that inspired the idea behind Tapinator

Ilya Nikolaev Tapinator was inspired by two market opportunities First there was the demand for simple simulation-style games on mobile Secondly there was a demand for best-in-class mobile titles that entertain consumers over a longperiod We founded the company during the early days of mobile starting with the former strategy which we refer to asour lsquoRapid-Launch Gamesrsquo business This strategy allowed us to build a platform of over 300 games As the mobileecosystem matured we decided to create products that are not only fun to play in the short-term but games that supportlong-term engagement We refer to this as our lsquoFull-Featuredrsquo Games business

What were some of the notable challenges you faced while developing your business

Learn more

As the mobile ecosystem matured we decided to create products that are not only fun to play in the short-term but games that support long-termengagement

The key to building a successful mobile game is to understand the target metrics of the product

NEW YORK NY shy JULY 11 Sameer Uddin plays Pokemon Go on his smartphone outside of Nintendos flagship store July 11 2016 in New York City The success of Nintendos new smartphone game PokemonGo has sent shares of Nintendo soaring (Photo by Drew AngererGetty Images)

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Ilya Nikolaev Within our Rapid Launch Games business the main challenge was building an install base for each gamelarge enough to monetize the product via advertising We have surmounted this challenge by creating a large network ofgames and by using the resulting network effect to cost effectively cross-promote players across our portfolio of gamesWithin our Full-Featured Games business the main challenge has been creating games where the lifetime value (LTV) ofplayers significantly exceeds their acquisition cost This is a challenge that all developers face when aiming to create top-grossing games We met these challenges through the combination of three things First through our knowledge andability to develop engaging gameplay Secondly we leverage our understanding and ability to build best-in-class systemsthat can monetize this engagement Lastly we have a rigorous creative process where the best ideas win no matter wherethey come from and an obsessive pursuit of creative excellence

Your company has created hundreds of mobile gaming apps mdash How does your development processwork and what are the keys to building a successful gaming app

Ilya Nikolaev The key to building a successful mobile game is to understand the target metrics of the product These metrics and the corresponding revenue potential then need to inform the thinking around creating a developmentbudget We understand that our Rapid-Launch Games are unlikely to become home-run products Accordingly ourdevelopment process is designed to build engines within several different gaming categories We then utilize each engineto create new titles built around pop culture topics or trending themes while minimizing the amount of developmentwork for each incremental game For our Full-Featured Games the approach is very different We create unique best-in-class products that require several months or years of development This is a home-run approach where we makesignificant investments with the goal of creating hit products with massive upside potential

Part of your mission is to create a mass production approach to mobile gaming apps mdash What is thestrategic thinking behind that and how do you see it transforming the industry

Ilya Nikolaev We see opportunities for both the home-run approach as well as the quantity-driven approach For thisreason we are actively investing in both our Full-Featured Games business and our Rapid-Launch Games business OurFull-Featured business presents the potential for creating long-term $100 million franchises We see this as the mostsignificant opportunity for the company At the same time the Rapid-Launch business highlights the opportunity forportfolio business models on mobile By relying exclusively on non-paid channels for customer acquisition we haveachieved 350000 to 400000 new player downloads daily with zero external marketing spend We believe that ourstrategies mirror the two viable business models within the industry today build a hit franchise where the lifetime valueof a player significantly exceeds the acquisition cost or build a portfolio that allows for a very low acquisition cost

It seems like so much of making a hit gaming app is the idea or creative vision behind it mdash But howimportant is more strategic thinking around bigger picture scaling and sustainability

Ilya Nikolaev Strategic thinking around the bigger picture is very important For a Full-Featured game we look atthree metrics retention average revenue per daily active user and cost per install (CPI) These metrics are impacted notonly by the idea or creative vision but also by the genre of the game the demographics of the players who download thesetypes of games and by the level of competition for new downloads For example if we look at the card game categoryretention is high they generally monetize well but the market is extremely competitive Only the best products succeedand a developer contemplating entry into this segment needs to understand the bigger picture

What should mobile gaming developers be thinking about or steering away from if they want to thrive inthe evolving marketplace

Ilya Nikolaev Developers should be thinking about gameplay that supports long-term retention and about systems thatallow for this retention to be monetized Developers who aim to create hit franchises should stay away from categorieswith very high CPI because this makes scaling the product difficult and expensive Additionally for low retentionproducts this makes long-term sustainability difficult

What would you credit to the swift rise of your company and the continuous success yoursquove had in thespace

Ilya Nikolaev Our team has been in the app space since the very beginning and we understand how to build highlyscalable consumer mobile products We have turned this understanding into two strategies that complement oneanother We have built a portfolio of more than 300 titles across the three major app stores that generate hundreds ofthousands of daily installs generating predictable and attractive returns Simultaneously our Full-Featured Gamesbusiness allows us to dream big and focus on producing hit games

How do you see Tapinator evolving over the next 3shy5 years and how do you see your companytransforming the industry

Ilya Nikolaev We see several trends emerging over the next 5 years We see continued focus on live ops and datascience for sustainable mobile gaming companies We also consolidation ndash companies will either focus on the first trendget purchased or simply go out of business There will also be new opportunities for AR and VR during the latter half ofthe next five years There will be an increased focus on creating sequels and portfolios of games given the increasing useracquisition cost We see Tapinator leveraging each of the above trends and creating several hit franchises that will allow itto continue climbing the ranks within the mobile gaming industry

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