Everyone knows the story of UK entrepreneur Mel Morris who invested £140,000 ($170,000) in King Digital Entertainment, makers of Candy Crush, in 2003, and collected over $530 million (£350million) when the company floated for $7billion on the New York Stock Exchange in 2014. Ever since, entrepreneurs and investors have been drawn to the mobile gaming industry.
And no wonder; for the first time, mobile gaming has overtaken PC gaming in terms of market share, according to Newzoo’s latest Global Games Market Report, which shows a total of $99.6 billion in revenues will be generated by gamers worldwide in 2016, $36.9 billion of which will come from mobile gamers.
The fast growing industry is also ripe for disruption, and British entrepreneur Sean McNicholas, founder of game design studio Project M, plans to shake things up with Dig That Gold, a game that gives away rewards in the form of real 24k gold bars.
Coming from a corporate finance rather than a tech background, he says: “From looking at the global success of games such as Angry Birds in 2012, I started researching the market and was intrigued by how many people are playing these games. I also believed the market would grow fast due to the growth and improvement of mobile devices, connectivity and the quality of graphics and gameplay, and decided to get involved. However, I thought that whatever I created had to be very disruptive if it was to have any chance of breaking into the industry.”
Set around the 1849 Californian gold rush era, Dig That Gold is a gold mining game, where players mine for virtual gold. Once they’ve mined enough, they save it and then bank it. Once enough virtual gold has been banked, the player is awarded real 24k gold bars, delivered directly to their door, courtesy of Project M’s gold partner Baird & Co.
McNicholas has also turned the traditional funding model of gaming on its head, by creating a game-based franchise investment opportunity, where investors purchase a virtual asset in the shape of one or more different-sized gold mines, ranging in price from £25,000 to £160,000, spread across a virtual network of islands within Dig That Gold.
Project M is based in the heart of London’s Tech City hub, where McNicholas self-funded a team of 12 top designers and engineers. He says: “I wouldn’t consider myself a gamer or a techy, and would definitely say I knew nothing about game development, so it was important for me to build a team around me that had the expertise to build a new and innovative mobile game. I worked with franchise law specialists to create the legal frameworks to ensure that this unique business model did not contravene any laws or any FCA rules and regulations."
The game was launched in the UK last month and McNicholas says that the levels - or mines - are already selling well to like-minded investors and entrepreneurs across the world.
“We have already sold over 200 levels, making it the fastest selling franchise this year,” he says. “Their plan is to use their social media network to drive traffic to their specific level where they can make a lot of money.” In terms of risk, McNicholas insists that while a typical franchise investment would normally be considered low to medium risk, his new type of franchise investment would be considered more medium risk.
Whether he breaks the hegemony of titles like Candy Crush and Mobile Strike remains to be seen. Dig That Gold is currently only on iOS in the UK, and has just under 100,000 users, a figure that is expected to increase rapidly once the game is available on Android and hits the big markets like the USA and China. “The plan is to roll out other top ten title games with a different user award attached to it and make Project M a really successful game studio,” says McNicholas. “I believe we have the potential to be bigger and better than the likes of Candy Crush.”
It wouldn’t do London's booming tech startup hub any harm either.