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Overwolf will pay out $29M to mod and app creators in 2021

Modders create cool things in Overwolf's community.

Modders create cool things in Overwolf's community.

Image Credit: Overwolf

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Overwolf rebranded itself this week as a guild of in-game creators. And it is announcing today that it expects to pay out $29 million to players who create items to buy and sell in video games.

The Tel Aviv company targets its services, such as its CurseForge Core user-generated content platform, at modders and in-game app creators. And it is on a path to triple its payouts to those third-party creators this year, said Overwolf CEO Uri Marchand in an interview with GamesBeat.

While $29 million may not seem like a huge number, it is close to the $30 million that Roblox paid out four years ago. And  Roblox, the user-generated game platform company, went public in March at a $41.9 billion valuation. Microsoft’s Minecraft, meanwhile, has paid out more than $350 million to its creators who have sold a billion mods. Manticore is also enabling players to create their own games and it recently raised $100 million to build up its Core platform.

“We’re actually running at a higher pace than we planned to,” Marchand said. “This is where it is trending. We’ve been working really hard on building what we call ‘the guild’ by funding and creators and turning building gaming apps and mods into profession.”

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Helping developers

Above: Overwolf’s CurseForge platform is growing.

Image Credit: Overwolf

Capitalizing on the trend, Overwolf itself raised $52.5 million in March as it expanded its modding platform for game developers and publishers. It is offering its platform as a service for game companies to take advantage of mods, or the custom creations of players that can enhance existing games. And it enables folks to create software that tracks player performance in games by tapping developer APIs (such as tracking deck performance in card games like Hearthstone).

Marchand believes user-generated content is at an inflection point. He believes in a future in which the community can participate in the creation and enhancement of triple-A games. This benefits game developers, as game development costs continue to rise. By adding community firepower, the developers can get reinforcements and a longer shelf life for their games.

“We want to be that service company provides a game studio with the ability to integrate creators with the game,” Marchand said. “We take all the heavy lifting that involves managing and creating community, and we make it easier for you as the game developer.”

I think of this as the Leisure Economy, where we can all get paid to play games in a long tail that supports far more than just celebrity esports stars and streamers. And the economy supporting game creators is evolving in ways that I’ve never really imagined.

Making a living

Above: Overwolf raised $52.5 million in March.

Image Credit: Overwolf

One small team using Overwolf has been able to turn their creations from a passion project into a living is Feed The Beast (FTB). They are one of the most popular Minecraft modpack creators and distributors with over 200 million downloads across platforms. After eight years, they have been able to monetize their creations on the Overwolf platform and have gone from being a group of volunteers earning nothing to making enough to open a physical office and support a team of nine people, with plans to employ a team of 20 at the end of this year.

Marchand hopes that Overwolf can continue charting a similar trajectory to Roblox as the demand for user-generated content in the games industry skyrockets. One of the reasons for that growth is that games are hugely popular and gamers demand an unending supply of content to churn through as they play more and more. On top of that, many gamers want to become developers themselves and modding is the path.

A handful of the top in-game developers who use the Overwolf framework make over $1 million per year, or more than five or six figures a month. More than 30,000 creators use the platform. For apps, creators get 70% of sales via Overwolf and the company gets 30%. For the mods, creators get 50% and Overwolf gets 25% and the game developer gets 25%.

Above: Overwolf has 85 employees.

Image Credit: Overwolf

CurseForge Core is based on technology that Overwolf acquired in June 2020. It provides a software development kit (SDK) for game developers that integrates into the game itself and functions as a gateway for users to discover and install mods in-game. It works across all platforms and storefronts, enabling publishers to easily integrate mods safely into existing or new games. This gives an official blessing by the makers of popular games for the community of creators.

“We’re fortunate to be in a position post-Curseforge acquisition in a place where we’ve improved in creater monetization,” Marchand said. “And we have made very significant friends with our gaming apps fund.”

The monetization is a mix of ads and subscriptions. In the future, that will include donation mechanisms where players can make donations to creators. Overwolf is working on numerous integrations with popular games, and it works with 16 games already. The biggest supported games are World of Warcraft and Minecraft.

“You can think about it like Steam Workshop with cross-platform ability,” Marchand said. “Unlike with Steam, it works across the platforms. It also provides monetization capabilities for third-party creators in an enhanced manner through microtransactions.”

Rebranding

Above: Overwolf sees modders on the growth path.

Image Credit: Overwolf

Those mods and apps are used by 20 million gamers, and the company is running at a pace of 25 million gamers this year. Over the last few years, Overwolf realized that its current brand doesn’t capture the essence of who it is today or connect with the community of creators in a meaningful way.

This rebranding shows the company is a lot different than it was when it started in 2011, with 85 employees and possibly 100 by the end of the year. And it points to the future of modders and app creators working on enhancing triple-A games, moving beyond the roots of part-time indie enthusiasts. Overwolf’s brand values include “be legendary” and “level up together.”

Every aspect of the new design was created to reinforce these ideals, Marchand said. And the company’s mission is to unite the in-game creator community by establishing a guild for in-game creators.

“I think we are in an early stage,” Marchand said. “There has been a big disconnect between the value of the model the popularity of the model, and the inability of the author to make a living. And, for us, this is the big picture. We’re operating in a mature environment and mature market. People have always created content around games. And we’re the first company that really wants to turn it into a profession. And we’re starting to provide results.”

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