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The mobile gaming startup gold rush has ended, and many investors have moved on to virtual reality, augmented reality, and esports deals. But don’t tell FunPlus that. The Chinese mobile game company is starting a $50 million fund to invest in game startups.

The primary focus is mobile, but the fund will invest money across different platforms. The first investment that FunPlus has made is in Sirvo Studios, a startup run by Asher Vollmer, the creator of the hit indie games Threes and Puzzlejuice. Vollmer announced on Monday that Sirvo is working on a game called Guildings, pictured below. The mobile fantasy adventure game has a scheduled debut in 2017.

The fund is an interesting strategic move for FunPlus, which has 400 people making games in Beijing and San Francisco. It reflects an effort to identify the next big hits by courting talented developers and funding their companies, rather than hiring them or acquiring their companies.

“We’re hiring too, but this is another way to reach our goals,” Fiden said.

Guildings by Sirvo Studios

Above: Guildings by Sirvo Studios

Image Credit: Sirvo Studios

FunPlus isn’t well known, but it has had great success since chief executive Andy Zhong founded it in 2010. The company has grown organically and has been profitable since 2011, Fiden said. FunPlus’s games include Family Farm, Farm Farm Seaside, Royal Story, and Fantasy Slots on iOS, Google Play, and Amazon.

Dan Fiden, chief strategy officer at FunPlus, said in an interview with GamesBeat that he believes that games are still one of the best investments you can make. He doesn’t mind running against the conventional wisdom that suggests that VR, AR, and non-game industries are better investments than mobile games.

Although it may seem like a time when investors are spooked or are more concerned with putting their money into non-gaming “unicorns,” or startups with valuations in excess of $1 billion, Fiden said he believes there’s a good outlook mobile games, which he says is a big passion for the FunPlus team.

“I started making games and investing in games because I love playing games,” Fiden said. “I think it’s going to be a great art form and business for the next 30 years. I would like to invest in a great video game more than I would like to invest in a ride-sharing app. I know more about video games.”

He said that the new fund will invest globally, in all regions of the world where it can find good developers. The fund will invest in companies, rather than just projects, as it did with Vollmer’s company.

“We’re not interested in investing in a plan to remake Clash of Clans, but doing it 10 percent better,” Fiden said.

FunPlus also isn’t interested in funding companies whose main plan is to create a so-so game that competes directly with the leaders of the top-grossing games list — and then spends most of its funding on user acquisition. Rather, he wants to invest in “amazing games” that can organically rise to the top.

“The costs for user acquisition are punishing for companies that entertain that as a strategy,” he said.

FunPlus is also going to hold a developer contest at the Game Developers Conference, both to sniff out possible investments and to reward developers doing cool work.

Meanwhile, FunPlus itself has been pretty quiet since it announced that it would sell its existing mobile game business to a Chinese holding company, Zonghi Holding, in August 2014 for $960 million. I’ve never seen that deal close, but clearly FunPlus isn’t hurting for cash these days. Fiden declined to comment on corporate matters.

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