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Tilting Point has raised $235 million to fuel its business of acquiring users for free-to-play mobile games.
That’s a huge round and a vote of confidence for Tilting Point‘s “progressive publishing model,” said co-CEO Kevin Segalla in an interview with GamesBeat. The funds will be used for expansion and acquiring new games, as opposed to directly funding user acquisition.
Tilting Point typically engages with game developers by providing them with user-acquisition budgets. It can borrow up to $132 million per year in its line of credit, and it has used that money to fuel advertising for games from developers who have shown a lot of promise. As the game grows its revenues, it shares the proceeds from the growth. That enables the company to work with developers who are already seeing great growth, rather than trying to pick the winners from a much larger field of small developers.
If the relationship works out well, then Tilting Point can make an investment in the game studio and help it get its next game off the ground. (Sometimes it doesn’t work out, as was the case with Third Time, maker of Photo Finish Horse Racing, an early customer that saw initial success and then slowed down. That firm eventually filed for bankruptcy protection).
But Segalla noted that the company has deep relationships with 40 developers with current campaigns. And eventually, if things progress to the highest level, Tilting Point will sometimes acquire the developers. The company did so with Gondola, Star Trek: Timelines (the game and its developers, from Disruptor Beam), FTX Games, and Plamee.
“We’ve been working really diligently to build a great company,” said Segalla. “We’ve done that bootstrapping the company. We haven’t taken any outside investment up until this investment. And we felt that that now is the right time for us to do that, and really accelerate all the things that we’ve been doing and doing successfully.”
General Atlantic, a growth equity firm, led the round with participation from strategic investor Red Ventures and Kamerra. The company will use the investment to accelerate its progressive publishing model by signing more developers in live publishing, co-developing more titles, acquiring more studios and partnering with developers on top intellectual property launches.
“This investment is really about taking what we’ve been doing really well, and doing it at a larger scale,” Segalla said. “It’s about signing more developers into live publishing deals. It’s about doing more co-development. And it’s about acquiring some of the studios that we’ve been partnering with along the way, which has been a great model for us.”
Tilting Point will also leverage the funding to continue to expand across geographies, platforms and audiences. Besides user-acquisition funding, the company also handles app store optimization (ASO), ad monetization, platform deployment and more.
“This funding is going to help us accelerate our progressive publishing model where we work with games that are already on the market and we accelerate them and amplify them,” Agili said. “We have built our entire company finding ways to amplify existing games and making existing developers more successful. And as we end going from dating to getting married, as we get to know them, we progress into a deeper progressive publishing partnership that makes sense for them.”
As for the funding environment, it’s good. Segalla said that the company did well by waiting to get a round of funding until the market favored successful game companies.
“That’s made us a much stronger company,” Segalla said.
Art or science?
I asked if this model was art or science. Agili said that the company is data-driven and has a scientific approach to scaling games and analyzing the data for doing the best user acquisition. This has helped games become more predictable and produce better revenues over a longer period of time than the days when games were hit-driven businesses. In turn, that has made investors more comfortable with investing in game companies, and that in part has led us to the current post-pandemic gaming boom.
“We see our work as de-risking free-to-play mobile game investment,” Agili said. “We get to be very good at predicting game performance.”
Segalla said that the investment community now recognizes there are models for successfully investing in games.
“Investors have finally taken note of this across the game industry,” Segalla said.
The methods have been put to the test during the current iOS market, where Apple has prioritized privacy over targeted ads.
“We’re seeing impacts across the board that is quite varied,” Agili said. “Some games are much more impacted than others. The games that are impacted are usually more niche and are looking for very specific target audience of high spenders. We have the advantage of being very agnostic to genres and we work on many games. We are lucky enough that overall it doesn’t affect us much.”
With this new financing, Tilting Point aims to further expand its global reach by growing in strategic international markets like South Korea and China. With offices in Seoul, St. Petersburg, Kyiv, Barcelona, New York, San Diego, and a new location opening in Miami, the company wants to attract top talent and serve the unique needs of new partners worldwide.
Tilting Point is already moving to new platforms, such as cloud-based Facebook Gaming and Nintendo Switch, bringing games to wherever players are. The company has grown to more than 200 employees, and it was founded in 2012.
“The magic here is that you build this over time, and you start with a relationship that is really focused on very specific, impactful results, which is user acquisition and refining the game,” Agili said. “And you eventually go into deeper things like building a game together. And ultimately, after the amount of time, a few months to a few years, you decide to partner up and do a real acquisition. So actually, the trust is built along the way through to real expertise and real results.”
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