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A List Games has raised $9.3 million in a second round of seed funding so that it can continue to market games via digital distribution, the company announced today.
The funding comes from parent company Ayzenberg Group, a digital marketer. A List Games tries to take the big risks out of traditional video game publishing deals. Many indie game makers are scrappy enough to find their own capital, so A List Games hasn’t focused on funding games but on marketing them. That’s a big difference between what A List will do and what a traditional publisher does. A List Games calls itself a “go to market” company. While it won’t fund games, it will fund the marketing plans for the games. In exchange, it gets a share of royalties or negotiates some other form of payment.
The Pasadena, Calif.-based startup, (which goes by the spelling [a]list games), focuses on creative ways to get games discovered, which is a major challenge for game makers now that there are hundreds of thousands of apps appearing on app stores and web sites. A List Games tries to get games noticed and drive up purchase intent in digital game markets.
The company funds and executes advertising, public relations and marketing programs in return for a share of revenue. With new money from Ayzenberg, the company can pursue more partnerships with makers of high-end digital games, particularly in the fast-growing sectors of free-to-play PC, tablet and mobile games. In free-to-play games, users play for free and pay real money for virtual goods.
An example of the way A List Games works is the title pictured above, APB Reloaded. That online game was developed over five years at a cost of more than $80 million. But it launched last year amid poor reviews, and the original publisher, Realtime Worlds, went bankrupt. The monthly subscription game was shut down in September. Then GamersFirst, an operator of free-to-play games, acquired the title and relaunched it using the free-to-play model.
GamersFirst put the title back into development, with about 25 or so of the original APB team members working in a new studio, Reloaded Productions. Realtime Worlds founder and APB creator Dave Jones joined the board. The developers focused on redoing the shooting and driving mechanics, which dragged down the original game. They also revised the customizaiton engine. The game relaunched and now it has about 850,000 registered users in the open beta test.
In partnership with GamersFirst’s marketers, A List Games is helping with the marketing of the crime game, which it now markets as “be all that you CAN’T be.” A List is investing in a big online ad campaign, where it can apply marketing tools and techniques based on actual user acquisition data. A List purchases ads on a cost-per-acquisition basis, enabling better return on investment for ads. It is also promoting different offers for in-game virtual goods. And A List has a number of affiliate and other types of marketing partnerships as well as sharing programs. The latter focuses on getting existing fans to share aspects of the game with their friends.
A List focuses on the marketing, but it is unlike publishers, which often also focus on development oversight and intellectual property ownership.
“There is a major shift in the game industry as developers move from traditional retail games to digital, many of them with a legacy of making hits,” said Steve Fowler, general manager of A List Games. “This is showing a trend towards digital games that rival anything sold in a store in production quality and game play depth. It’s also leading to greater competition to draw bigger audiences.”
Market analyst DFC Intelligence recently reported that the worldwide market for digital games last year was $19.3 billion, or about a third of the overall revenue of the game industry. That is expected to nearly double to $37.9 billion by 2013, when digital games will be bigger than console games.
“This is a tremendous opportunity for us to introduce new integrated creative and marketing techniques that draw upon everything we have learned in 18 years of marketing games,” said Eric Ayzenberg, chief strategist and chief creative officer of Ayzenberg Group. “We have proprietary tools built to create campaign transparency and a greater degree of efficiency and trust for our partners, along with more powerful results.”
He added, “They allow us to optimize throughout all marketing stages, just like game makers currently change their games daily to keep the experience fresh. We want to do the same thing during our marketing process to keep our consumer communication entertaining and relevant.”
Fowler said that APB Reloaded is successful as a free-to-play game, and the marketing programs such as traditional ad buys to creative customer acquisition programs are in full force.
Another game that A List Games is marketing is War Inc. Battlezone from Online Warmongers. A List Games was founded in February 2011 with seed money from Ayzenberg. The seasoned staff includes senior marketers from Microsoft, Disney, Activision-Blizzard and Rockstar Games.
A List Games’ advisory board includes David Cole, CEO of DFC Intelligence; Ed Fries, entrepreneur and former creator of Microsoft Game Studios; analyst Michael Pachter, managing director at Wedbush Morgan Securities; Greg Short, president and CEO of market analyst firm EEDAR; Ben Straley, CEO of Meteor Solutions; Alyssa Padia Walles, co-founder of Big Screen Gaming; and Jordan Weisman, founder of Harebrained Schemes.
A List Games has six employees with access to 70 people in Ayzenberg. Its competitors are marketing departments within traditional game publishers.