Zeedz: Why games are all about numbers #DHDL

Founder Sven actu­ally had a diffi­cult project ahead of him. He came into the cave with a busi­ness model that many investors actu­ally exclude per se: a mobile game. In addi­tion, Ralf Dümmel was a lion who avowedly does not invest in apps and soft­ware, even though he once announced that this might happen again some­time, which Till­mann Schulz imme­di­ately reminded him of.

To make matters worse, the lions already recog­nised the theme from the back­drop before the founder entered and sounded a little scep­tical as to whether they would simply be presented with the next game here. No ques­tion, if an invest­ment were to be made at all, it would have to be a very special game.

But why do investors view games so crit­i­cally? After all, there are also the well-​known peren­nial favourites such as Candy Crush or Clash of Clans, which even in Germany generate billions in sales for the industry.

For most investors, who some­times reject invest­ments in games out of hand, the incal­cu­la­bility is the big problem: a few games become incred­ibly successful, but the vast majority hardly recoup the devel­op­ment and marketing costs. Since people are noto­ri­ously fickle, it is also almost impos­sible to predict which game concept could inspire the masses, which will get a small but at least regular circle of fans, and which will completely flop.

Before there is a certain amount of data, it is unfor­tu­nately also extremely diffi­cult to judge. After all, the success of a game depends on far more than its pure user numbers. Most successful mobile games today are free-​to-play, which means you can play without paying anything at first. They are mone­tised through in-​app purchases, i.e. small indi­vidual purchases that users make during the game. These can be ways to shorten the waiting time for the next step in the game or to buy certain virtual goods that promise advan­tages in the game. In order to judge how successful a game is, it is there­fore above all deci­sive how many users become paying players, how often they buy, how much they then spend on average and so on. This results in a revenue struc­ture and an average moneti­sa­tion per player, which of course then has to be weighed against the acqui­si­tion and support costs again.

The crux of this whole battle of numbers: you can only really fight it well when you have already reached a certain size, i.e. when you can already measure and eval­uate these numbers on a rele­vant scale.

Zeedz wasn’t actu­ally ready yet, after all, when it was recorded it was still in a closed alpha version, so not yet freely acces­sible to everyone in the app stores. Never­the­less, founder Sven asked for 600,000 euros and offered 10% of the company to the lions in return. But the valu­a­tion discus­sion that some prob­ably expected failed to mate­ri­alise.

This was less due to the fact that the colourful seeds that can be planted and nurtured in the game not only simul­ta­ne­ously ensure that players are concerned with the envi­ron­ment and climate change, in which real weather phenomena affect them. Also, the fact that a certain percentage of subscrip­tions and in-​app purchases goes to green projects is less likely to have acted as a shield against poten­tial eval­u­a­tive crit­i­cism.

Instead, the numbers came into play here, and the ones that at least the viewers got to hear were quite some­thing: the game had already gener­ated over 1.5 million euros in sales, even though it was not yet really on the market. The Zeedz team had managed to do this by building up a commu­nity that was already spending money on the virtual seeds before they could even play. Special editions of these game pieces called „Zeedles“ were even sold for up to € 2000.

Thus, the two founders managed to grow well with only the share capital of their company and to make their further invest­ments from the sales until they were now even in the 7-​digit range. This alone is already a remark­able success, however, one can assume that investors will have further ques­tions about key figures even after such dream figures have been named and will want to delve deeper into the revenue struc­ture mentioned above.

This part – insofar as it has taken place – is unfor­tu­nately with­held from the viewers in this case, but one can already deduce a lot from the few figures mentioned: The Zeedz team has under­stood how to create a game that excites people and to build up a commu­nity even before the launch that pays not exactly insignif­i­cant sums for purely virtual figures and goods. So there was already a certain „cult“ or „hype“ around the game, which only rarely works and cannot be offset in pure marketing money.

The founder’s back­ground was also impres­sive, as he had already success­fully helped to set up a company – which is known to make many investors‘ hearts beat faster.

That, together with the inspiring theme and concept, the char­i­table aspect of the donated proceeds and the prob­ably still-​mentioned numbers that didn’t make it into the final cut, then prob­ably achieved what is record-​breaking in the cave: on Dagmar Wöhrl’s initia­tive, all five lions make an offer together – including Ralf Dümmel! Each wants to „settle“ for 5%, which in total means 25% company shares for the founders instead of the planned 10%.

Never­the­less, founder Sven agrees to the lions after a phone call, and the joy is visibly great among all involved.

A game that sets out to save the climate is really not just any game. So let’s hope that this concen­trated lion power will grow many zeedles and thus ensure plenty of contri­bu­tions to green projects.