We’ve all heard of mobile games like Angry Birds, Candy Crush, Clash of Clans and Fortnite. Heck, Fortnite has become a worldwide sensation this year catching fire with millions of children and adults alike.

So many of these famous mobile games have almost become iconic elements of western culture, and it’s big business. With over $70B spent on mobile games yearly it’s more than just a game.

However, the way in which players are coerced (aka manipulated??) into spending more money on mobile games is to access further advancements or special equipments that improves player capabilities. The conversion from Free to Play (F2P) to Play to Win (P2W) is a controversial one, especially amongst serious gamers.

Many gamers eventually grow a distaste for games that enable P2W players to advance well beyond the capabilities of F2P players. This in-game friction does eventually lead to many free players dropping off due to the high gap in terms of power dispersion amongst these two cohorts.

Some examples of in-game paid content that is less than optimal can be seen below.

Solving the high turnover rate in mobile gaming that sees many gamers fall off 6 months after initial release is one the Dun Rite team might be well positioned to solve.

With so many games being launched all the time, the question is how to build stickiness and longevity into mobile games. Perhaps shifting away from P2W towards offering premium customizations and unique features that enhance the gaming experience while keeping the playing field level would be more desirable.

Changing the in-game balance of power by mitigating the influence of spend on the overall outcome of the game can create a more social gaming experience that drives continued use rather than distaste with the “system.”

Dun Rite is deciding to listen to the customer and build a game that tailors it experience to what the mobile gamers want, and we think any time you put the customer first, you have a chance to win.

As avid gamers, the Founders completely understand the power game that most mobile games create through their paid features. Instead of being fixated on the idea that money is the success of a game, Dun Rite plans to make the game completely free to play.

The team is also proactively listening to its customers by running an active discord channel (chat room for gamers), where they keep their followers updated and listen to their suggestions.

The game will be separated into three different categories of roles; Those who seeks righteousness, power and money.  As a result, this would attract a wider range of audience than the traditional way of following a specific storyline or being entirely goal oriented.

People with different interests can come together into one online world while making the game more three dimensional. There will be real interaction between different types of players promoting the social aspect and unpredictability within the game itself.

In addition, players will not be able to buy items that will give them an edge over the rest of the players. Money could be spent on the customization of the characters which would not upset the balance of the game or change its gameplay.

The players will also be able to have the option of speeding up upgrades. Paid player would only get to higher level faster, but eventually the Free to Play population will get to the same level as well.

With this, the paid players could still get ahead if they are willing to spend.  However, the gap between the two factions will be limited providing a platform where both free and paid players are on a more level playing field.

The Founders are creating the game with the best interest of the players in mind. This reduces the risks and mistakes many current mobile games possess, which is thinking about monetization before user experience. This we think will create a more sticky game that can have sustained success.

From the launch of the iPhone in 2007, the entire gaming landscape has been transformed. Finding ways to capitalize on this gaming shift is a good place to consider investment.

Consider that in 2012, only 18% of gaming revenue came from mobile gamers. Since then, the percentage of mobile gaming revenue has drastically increased to 51% and is predicted to continue to take share from PC gaming with 59% of active gaming revenue coming from mobile by 2021 or $106B+.

As of today, mobile gaming for the first time makes up over 50% of all gaming revenues with $70B in global mobile gaming revenues, outpacing console and pc game revenues of $67B combined.  As of right now, 75% – 90% of the income of the Google Play stores and iOS app store come from the gaming industry.

So how is mobile gaming winning? First off , mobile gamers are spending more time on their phones than ever. It is easily accessible and the better models of phones are able to improve the experience of the players and the quality of the game.

Whereas for console and other PC games, the development of the gaming devices themselves can get pricey. Second, mobile games are more viral and social in nature, which drive more willingness to spend on additional features.

Most mobile games take the form of Freemium – offering the game for free and make money from in game purchases and ads. This is also gives the customers a chance to try out the game and decide whether they will be willing to fully commit to it. In fact, 53% of the revenue comes from in game advertisement. Another 43% of the revenue came from in game purchases.  And this 43% came from 5% of the players. Imagine if a game can get more of the 95% players to spend. The market has a huge potential and room for growth.

Many people tend to make purchases on impulse and hope to get the full experience of the game without spending the time required. There are also a lot of deals within the game itself that promotes the players to spend. It offers them a seemingly good deal for once and gives them the satisfaction of owning something extra that would not have been provided otherwise.

One of the most successful games that inspired Dun Rite is the mobile version of Fortnite. From its signature dancing characters, it’s been the viral gaming sensation for the past year and in April alone, the game made over $300M in gaming revenues from the customization of characters.

Customization and skins give the characters a better look in the aesthetic view. Just think about that. $300M for silly but very valued customizations by the gaming community. In short, there are significant market opportunities in mobile gaming if you can produce a winning game.

Investing in games in general is challenging because it is really hard to identify winning games over losing games before they launch. Unlike a product or service that meets a certain market need (e.g., KingsCrowd provides re search and ratings in an investment space that lacks a solution), gaming is about whether or not it catches with consumers.

When you add in the element of art and human interaction deciding on winners can be a lot more challenging. There is no clear cut need in gaming. There are just more questions around potential customer adoption. Nonetheless, we think Dun Rite within the realm of gaming is an intriguing investment opportunity.

1. Large Market: Mobile gaming produces over $70B in global revenues and continues to grow. Needless to say there is room for several winners in this category. If the team does hit with its game the upside on the current $8M valuation is immense. Like we’ve mentioned Fortnite does hundreds of millions on a monthly basis in revenues. If this team can even do single digit millions per month, they will be well positioned for a sizeable exit.
2. Voice of the Customer: One of the things we like most about Dun Rite is that they have taken the time to listen to the customer. The product from the start has been built with the customers voiced desires.
3. One of the things we like about the team is that the Founder, Jake has a huge gaming following on Youtube and has utilized these individuals to validate what they are building. That’s why the team has developed the in-game purchasing options to meet what the gamers want. The majority of gamers will be able to be a part of the Free to Play category and choose to not spend very much money if at all.
4. However, unlike the power gap created by the paid offers in most games, which result in gamers leaving,  Dun Rite’s purchase options can provide both players the same gaming experience since the majority of in-game purchases lie in speeding up upgrades and customizations. This keeps players on a similar playing realm while still finding ways to enhance the experience for serious gamers.
5. We think listening and taking into account gamer feedback along the development process will help to de-risk Dun Rite being a total flop at market launch.
6. Distribution advantage: As a YouTube gamer with 100K+ followers, Jake provides a major leg up to Dun Rite. First off, he has a natural distribution channel to get the word out about Dun Rite to a loyal following of individuals that love him already.
7. One thing that most people in the gaming community feel strongly about is the fact that they respect and appreciate other gamers. It is hard to buy a genuine following. Dun Rite comes with a built in following that can help drive early adoption and viral excitement. In addition to listening to these followers to develop the game, he is also utilizing them as a way to get the word out fast. That is a position we like for helping to get the game off the ground in the early days.

Jake Dobbins, the Founder of Dun Rite is an intriguing gaming Founder because he does not necessarily come with the expected pedigree having spent time in more traditional finance roles prior to this. However, he brings to the table the value of having built a massive following as a popular gamer on Youtube and his viewpoints are well respected in the community.

Nonetheless, we do look for experience when building out startups like Dun Rite and we think Jake has done a terrific job of surrounding himself with the types of individuals that can help bring his vision into reality.

Ricardo Velez, the Co-Founder and Engineer comes with extensive product and engineering experience including various projects he founded and others he helped to build. Ricardo has helped to assemble a team of 16 other artists, engineers and developers that are helping to make Dun Rite a fully functioning game. They seem to have the needed skills and capabilities to develop the Dun Rite game.

The Recommendation: Deal To Watch

Considering the growing mobile gaming market that has been highly successful in monetizing games, we think Dun Rite is in an attractive market category. We also think Dun Rite comes at a time when users are looking for a product that is stickier because of its focus on customer feedback and repositioning of how it monetizes.

We think this focus on the customer and the progress to date of the game position leadership to bring to market a really intriguing game that should experience early traction thanks to the Founders following in the community.

Nonetheless, investing in games comes with certain risks of outright failure and poor market traction. Though we think the team is doing a lot to mitigate these risks, understanding the viral nature of consumer adoption is challenging.

For these reasons, we think it is a highly attractive investment that comes with tremendous upside but also a dose of additional risk to other startups. Thus we think it is a Deal To Watch and you should only invest as long as you understand the additional risks of the gaming space.