Mobile-Games Company Scopely Raised Additional $100 Million for Acquisitions, Investments
By Todd Spangler
LOS ANGELES (Variety.com) – Walter Driver, CEO and co-founder of Scopely, doesn’t describe his company as a mobile games publisher.
Instead, he says is a next-generation mobile entertainment network — one that delivers dynamically priced interactive entertainment experiences in a model with the potentially to far exceed traditional Hollywood.
Seven-year-old Scopely is now valued at more than $700 million, after it raised an additional $100 million as part of its Series C round. It announced $60 million in Series C funding in June of 2017, but the round was heavily oversubscribed. The company subsequently raised $100 million from Greenspring Associates, a fund-of-funds that is a limited partner in several venture-capital funds, and Horizons Ventures, the fund of Hong Kong magnates Li Ka Shing and Solina Chau.
With that money in the bank, Scopely is now looking to make acquisitions and investments in game studios and intellectual property to build on its existing network of more than 165 million users, said Driver (pictured above, second from left, with Scopely’s three other senior execs).
“We are looked at as a gaming company,” he said. “But we think of ourselves as an experience company.” Scopely, according to Driver, is creating the “Netflix of software-based entertainment,” and with the new funding “we have a lot more ammunition to go after that.”
To date, Scopely has raised more than $250 million in total financing from a laundry list of VCs, tech and media execs, and celebs. Investors include Revolution Growth, Greycroft Partners and Evolution Media.
Individual investors in Scopely include Tom Staggs (former COO of Disney); Jim Gianopulos (CEO of Paramount); Peter Chernin (CEO of the Chernin Group); Peter Guber (CEO of Mandalay Entertainment); Jon Schappert (former COO of Zynga and Electronic Arts); Dave Dorman (former CEO of AT&T); Jimmy Iovine (co-founder of Beats by Dre and Interscope Records); and Arnold Schwarzenegger.
Scopely currently has four top-grossing games: “WWE: Champions,” a puzzle-matching role-playing game; “The Walking Dead: Road to Survival,” an RPG based on the hit TV show; “Wheel of Fortune Free Play,” a casual/word puzzle title; and “Yahtzee! With Buddies,” which is just what it sounds like.
Driver says Scopely has lured Hollywood luminaries as investors because its apps generate a far higher level of engagement — and per-user revenue flow — than traditional movies or TV shows.
Consider that Scopely’s average “Walking Dead” user plays the game 22 hours per month, while the average Yahtzee user plays more than 70 turns per day. Moreover, people will pay far more for Scopely’s games compared with linear entertainment. In the first quarter of 2018, the company’s titles generated $81.45 per paying customer per month. (“Walking Dead” players spend an average of $125 per month in the game.) Netflix’s most popular tier, of course, is the standard $10.99 monthly plan.
“Our products are free to play. So we let people decide how much they want to spend on an experience,” Driver said.
Around 80% of Scopely’s revenue is from in-game currency, with the rest from advertising. The company is profitable, according to Driver, but the privately held company doesn’t release financial results.
According to Driver, some super-users have paid upwards of $10,000 — and more — on virtual currency to gain status in Scopely’s games. He compared that to a football superfan paying several thousands of dollars to get field-level seats for a Super Bowl.
Again, Driver argued, Hollywood by contrast doesn’t really have a broad range of retail pricing options for fans who want a super-premium, personalized experience with an entertainment franchise. “If you have, say, a Spider-Man movie, there’s no way to let a fan pay you $1,000 to have a really enhanced Spider-Man experience,” he said.
Overall, L.A.-based Scopely has about 800 employees in 13 offices around the world. Scopely employs more than 25 people who have worked on games that have generated over $100 million in lifetime revenue. The platform process more than 1 terabyte of user-engagement data daily, and Scopely feeds that data into machine-learning algorithms to dynamically optimize player experiences, user acquisition spending, in-game advertising, and other functions.
One of Scopely’s key rivals is Jam City, which also has been growing leaps and bounds.
Jam City, based in L.A., is majority-owned by Korean gaming company Netmarble. The company has teamed with Warner Bros. for “Harry Potter: Hogwarts Mystery” game, which had 3 million pre-registrations and debuted this April as the No. 1 free-to-play game in the U.S. and 55 other countries. Other Jam City titles based on entertainment franchises include games for “Family Guy,” Marvel Avengers and Matt Groening’s “Futurama.”
Pictured above (l. to r.): Scopely executives Tim O’Brien, chief revenue officer; CEO Walter Driver; COO Javier Ferreira; CTO Ankur Bulsara
