Plexchat has raised $7 million in venture capital to build chat platform for mobile gamers.
It may not sound that exciting or new, but the features in the chat platform are thoughtful, conceived from a gamer’s perspective, and that enabled the company to impress potential investors. The money comes from Raine Ventures as well as First Round Capital, Dream Incubator, London Venture Partners, Lumia Capital, Macro Ventures, Singularity Ventures, and Hany Nada (founding partner of GGVC). That’s a good group of game-savvy investors, but they think highly of Plexchat’s leader.
Shawn Foust, CEO of Redwood City, Calif.-based Plexchat, said in an interview with GamesBeat that the company will use the money to turn Plexchat into the premier application for mobile gamers to connect and communicate about the games they love. Foust wants to bring word-of-mouth social excitement back to the mobile games, which is currently dominated by the companies that can advertise the most.
“Today, you’ll find your next mobile game because you saw it featured in the app store, you saw a Facebook ad, or you saw someone playing it next to you,” Foust said. “The actual community tied to hundreds of millions of gamers is nonexistent. Performance marketing is the way games get noticed now.”
Facebook is a fine social chat platform and Twitch has captured livestreaming fans, but mobile gaming is a second-class citizen on those platforms, Foust said.
Gordon Rubenstein, managing partner at Raine Ventures, will join Plexchat’s board of directors.
“Shawn is a force of gaming: unique in that he is a one-of-a-kind entrepreneur and core to the gaming community,” said Rubenstein, in an email with GamesBeat. “Plexchat is serving the gamer and the need to connect unique mobile networks/games and share relevant information and knowledge. We agreed with Shawn that there was a huge problem and opportunity to solve this issue while truly enhancing the gaming experience.”
Foust candidly acknowledged that his platform could fail. But he figures it’s worth the risk because of the “hunger on the user’s side to have someone who actually cares about them.”
Foust is a veteran of mobile games. He was previously senior vice president of operations at Machine Zone (now MZ), CEO of Quark Games, and cofounder of Illuminous.
If Plexchat succeeds, it will make it a lot easier to recognize high-quality games. And that means that it will be possible for mobile games to succeed without huge user acquisition budgets.
Foust said, “I asked myself if the mobile game industry is going in a positive direction or a negative direction. Is there increasing diversity of content? Are more people involved in it? Are up-and-coming creatives thinking of it as their home? And I say, ‘No. It’s looking pretty grim.'”
“Right now, a lot of game developers are deciding that they can’t succeed in mobile games, and they’re turning to the PC or another platforms, and to me that doesn’t seem right,” Foust said. “Mobile is the largest game segment in revenues and players, but there is no dedicated platform for community. It’s an existential crisis for mobile games.”
Plexchat wants to fill this gap. The company is in the midst of redesigning its app based on feedback from users.
“We focus on chat and multimedia sharing,” Foust said. “The players will notice more games. The idea is that more and more game companies can get more users and more revenue.”
Foust hopes that the company can generate revenue from deep referrals for game companies, rather than just make money from banner ads.
Foust looked at mobile native cultures in Asia, where chat platforms such as Kakao and WeChat are thriving. Plexchat will enable rich, live conversations within large, open communities of gamers. The company focuses on making it easy to add context to chat messages and move beyond pure text. Foust said the platform will use shortcuts so people don’t have to type every message out in long form.
“Successful entertainment businesses in the 21st century undertake fan management,” said Hideaki Ono, senior manager at Dream Incubator, in a statement. “Plexchat is a rare and solid company that brings fan management to mobile gamers, mobile gaming companies and mobile gaming developers around the world. We are thrilled to work with Shawn and his team to help mobile gaming communities especially Japanese gamers, Japanese gaming companies and Japanese gaming developers expand their global reach.”
Plexchat launched a beta test earlier this year, and now it is revising the app based on feedback. The app will eventually be available on iOS and Android.
He added, “It helps that the product is a good idea as well so we went straight in. The team assembled, engineering led by Jeremy Ong is also super strong, so we’ve been excited to be on the journey with them. I also love how they have engaged with the different game makers like Supercell. They take an honest and gamer first approach and that is winning them credibility. In short the team was a big thumbs up, the concept of serving the most committed fans of the different games with a useful set of tools and the ability to be proud to introduce them to our network just all made sense.”
The features include smart messages, where users can leverage multiple types of messages (replies, polls, galleries). The platform will also have community building tools for things like ranks, roles, participation limitations, bans, squelches, invite-only rooms, and more. Players will be able to share videos easily.
It will have responsive rooms, or chat rooms that respond to a user’s interests and provide tools specific to those games. And it will have embedded wikis for games that allow players to quickly reference and link information related to the games they play.
Foust started the company in 2015 and it has 20 employees. In an email, Chris Fralic, partner at First Round Capital, said, “I loved their early focus on mobile gaming and chat/communications, and I love the recent refinements around building community and mobile content creation/curation. Shawn and Jeremy and the team are rock stars and bring amazing passion and insight and authenticity to Plexchat. We are big fans.”