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DeWolfe: SGN is 'scrappy,' ubiquitous and profitable

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After merging the strategic acquisitions of a two-year shopping expedition, SGN’s Chris DeWolfe is poised to have his company’s games available to play wherever consumers happen to be and on whatever device they choose to use.

The entrepreneur is now CEO of the independent multiplatform game developer and publisher SGN, which DeWolfe built from the union of MindJolt, HallPass Media and the acquisition whose name he assumed.

“I started thinking about this right after I left MySpace,” DeWolfe said. Ah yes, MySpace, the seminal social network DeWolfe co-founded in 2003. It’s struggling now, but News Corp. paid $580 million for it in 2005, and it had more than 125 million monthly active users globally in 2009 when DeWolfe went his separate way.

He knew he wanted his next adventure to be in the game space, and the entrepreneur identified the elements a game company needed to succeed, then set about acquiring companies that filled those requirements.

“We wanted to leverage the fact that a lot of companies are in this space but didn’t have one of the pieces necessary to survive – and more than that, to win,” DeWolfe explained. “MindJolt got us the Facebook piece. We saw a great studio in Buenos Aires that had 30-40 million mobile downloads and was just starting to make the game transition from paid downloads to freemium – that was SGN. HallPass was really strong on the web. And that completed all aspects of our game development and game distribution plans. We’re now looking at new acquisitions, and they will probably be around game studios so we can increase the number of games we can release.”

Keeping these elements in balance is important to his plans. If he were to go out on a limb for one platform, however, it would be Android rather than Facebook, and especially Amazon’s Kindle Fire tablet.

DeWolfe is dismissive of developers who say they can’t make money on Android. “That was a great debate to have in 2010,” he said. “Amazon is going to be the dark horse. They’re very well-versed in the art of retailing and merchandizing and virtual goods, and they have a device that integrates really well with their app store at such a great price point, and they have the one-click purchasing which makes the potential for in-game sales astronomical.”

Even though his first acquisition was entirely based on Facebook, DeWolfe has no intention of hitching his success on to any other company. “Facebook is the social glue even on mobile, and we love Facebook, but as they make tweaks and changes it’s not a good idea to have all your eggs in one basket,” he said. “We want to be in control, be more independent, and from a customer satisfaction standpoint they want to play on every single device. It will take a little while for that to match up, once HTML5 gets there, but right now we have a lot of games that are native applications on iOS and Android.”

DeWolfe said his game business has been profitable from the very beginning. It now has about 120 employees and has the resources to develop 15 to 20 games a year that it owns. Other projects underway at SGN include developing a platform to develop once and distribute across multiple platforms. It’s also constantly strengthening its analytics to better understand every aspect of the business, from the performance of an in-game promotion to the lifetime value of each user and what it cost to obtain them.

Funded by Austin Ventures, and led by a seasoned team of Internet pioneers, SGN is based in Los Angeles, with studios in Buenos Aires and San Francisco. So far it is best known for Fluff Friends Rescue, Jewels of the Amazon, Bubble Atlantis, Skies of Glory, FAST, MindJolt and Lil Flippers, which collectively represent more than a dozen top 10 titles on the iTunes Store and three number one titles on the Amazon Appstore. DeWolfe reports SGN has over 35 million monthly active users, 45 million mobile downloads and more than 80 million installs on Facebook.

“We’re learning from the past and not growing too far too fast,” DeWolfe said. “We can operate in a non-bureaucratic way, we’re really scrappy. My memories of MySpace are that it’s really fun to be a CEO when you have 100 or so employees. We’re maintaining corporate culture and innovation and risk-taking, things that we learned at MySpace you really can’t take for granted.”

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Chris DeWolfe, Chief Executive Officer, SGN (Social Gaming Network) will be sharing further insights and strategies in a fireside chat with Greycroft Partners’ Paul Bricault at the LA Games Conference on April 24.

 

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