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Epic Owl's CEO Juha Vainio talks about his learnings while trying to raise an investment for Epic Owl during the first year of business.
It has been a while since my last blog posting so it’s definitely time to write about something I have been up to. Most of my time in the past six months have gone to finding an investor willing to back us up in the future. Instead of investors I have gained tons of insight and want to share some of my key learnings with you. Here you go…
For background, Epic Owl’s strategy from the start has been to develop a small-scope unique mobile game for hardcore gamers, use it to prove our team’s capabilities and raise money to enable the development of our massive second project. This is what we set out to execute and we have definitely managed the first part, i.e. the development of Starside Arena. It’s a strategic free-to-play multiplayer game set in space and we, a team of 5 developers, made it from scratch to soft-launch in 6 months. Quite successfully: the metrics are good and the target audience loves it. The only thing we failed to do was to get a huge pile of players for it, but it shouldn’t matter since the priority was to use it for raising an investment?
Well, as I said, we haven’t found an investor yet so there must have been something wrong with the strategy. I have talked to about 100 investors and while a good number of them is excited at first, no-one has walked the last mile. Here are my own reflections as to what the reasons are, based on the discussions with lots of investors, mostly from China, Europe and the US.
The team
Our team is relatively young and we don’t have an average of 15+ years of industry experience. This was one of the issues we wanted to tackle by developing a smaller-scope game at first. But even though our track record in the past (at Rovio Entertainment Ltd) is good and the execution of Starside Arena development was outstanding, investors seemed unconvinced still.
The first game – small
Starside Arena is a niche game for specific target audience and while it resonates really well with that audience, some investors couldn’t see the appeal there and thus the decision to invest was made harder. The metrics were good but the number of players we managed to get for the soft launch was so small the investors couldn’t trust the numbers we were giving them. All in all, even though the production was a success, the plan definitely backfired here. For a new game studio such as Epic Owl, it would have been safer to go with something more mainstream, at least IP-wise. Space-themed mobile game is definitely something investors don’t like.
The second game – huge
We thought that a huge game production would be something that, in addition to being something ambitious that we would really like to do, be interesting for the investors. But in retrospect, probably not so interesting.
As you can read from above, our team was very young and our first own game was a small-scope project. Diving into a huge one (I’m talking about production scope 6+ times the size of Starside Arena) does seem foolhardy at best. We had no concrete evidence about our capability to take on such a project so backing it up would be a highly risky move for the investors.
The competition
Something we definitely did not understand when we started the company was how many small game companies there are. We also overestimated the value of being hotshot game developers from Rovio and being located in the mobile game development hub of the world, Helsinki, Finland. The selections as the #1 hottest startup from Finland (April 2015) and #1 hottest gaming startup from Finland (December 2015) by Startup100.net did little to improve the situation.
Most investors interested in gaming had their portfolio full. Mobile gaming companies have been hot potatoes for a while and investors have been enthusiastically investing for them some years now. At the moment they seem to be concentrating more on seeing what comes out of their investments instead of making new ones.
Also, mobile gaming isn’t so hot as it was a year ago. New platforms such as VR and smart watches are coming and some investors want to make quick wins on those.
So for just another mobile gaming company we were left with a limited number of investors and limitless number of just-another-mobile-gaming-companies competing for their attention.
The lack of publisher
From the start our attitude towards publishers has been very negative. There are lots of stories about small companies being screwed by the publishers so we wanted to steer clear of those and concentrate on self-publishing.
If we would be starting up now, our attitude would be different. There are great publishers out there, helping out with QA and especially with marketing and UA, something a small indie company cannot really tackle. The investors know the problems in self-publishing so without a publisher, the investment decision for them is harder still.
Conclusion
If we were starting up now, the things we would probably do differently:
We would get a publisher
We would start hunting investors earlier and with more attitude
We would be more humble about our chances
We would be more realistic about our plans
Here you go! I hope you can find some of these experiences useful and as always, I’m very open to all discussions. Thanks for reading! If you want to check out Starside Arena, you can find it HERE for both iOS and Android.
– Juha
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