The casual gaming industry has transformed from a pastime activity enjoyed by a niche group of nerdy enthusiasts to an entertainment segment with estimated annual revenues north of $200 billion globally.
But despite the tremendous growth and numerous success stories, achieving these outcomes requires overcoming some significant operational, creative, and financial complexities. Soaring user acquisition costs, changing regulatory and privacy frameworks, rapidly evolving technologies, shifting consumer preferences, intense competition, and scalability challenges (to name a few) make it an “acquired taste” for many investors.
This blog explores our journey with SuperPlay since the last round we led in late 2022, and who recently announced their sale to Playtika, entering the list of top ten exits in the history of mobile gaming and creating one of the largest and fastest-growing global mobile gaming franchises.
We'll delve into our investment decision at the time and what we believe SuperPlay's story reveals about succeeding in an industry ripe with both challenges and immense potential.
Israel's gaming industry presents a compelling investment opportunity, driven by a remarkable concentration of talent in game development and leaders with a deep understanding of the market dynamics of the sector. In an industry where team quality is paramount, the gaming scene in this country has managed to produce innovative and captivating experiences that resonate with global audiences. It is these factors that we found in SuperPlay.
SuperPlay’s founders are the epitome of a founder-market fit. Co-founders Gilad Almog and Eyal Netzer bring extensive experience from their work at Playtika, while Elad Drory , the third co-founder is an alum of CrazyLabs and Rovio Entertainment Corporation. They were hailed as an "A-team" for a reason: their exceptional strength both on the creative as well as the operational fronts were evident in their successful first title (Dice Dreams), and from the outset, their goal was to build a significant multi-game global studio.
At the time of our investment at the end of 2022, we had the benefit of looking back at their operational and creative actions (and reactions) to a rough year in the mobile gaming industry. While very strong ROAS (Return on Ad Spend) trends, retention, and other important KPIs were noteworthy, they didn’t tell the full story of how well Gilad, Eyal and Amir Hanin (the CFO) managed the headwinds of 2022 while Elad was focused on bringing the second game Domino Dreams to market in early 2023.
SuperPlay’s culture has set them up for success, and their mindset has powered them to turn challenges into opportunities.
At its core, the company embraces creativity, risk-taking, and innovation, fostering an environment open to new ideas and approaches. This openness drives them to critically evaluate their efforts and swiftly address any missteps. For instance, if/when data indicates a major marketing initiative is underperforming, they don't hesitate to pause and redirect, regardless of the resources already invested.
This agility - the ability to take risks and execute and iterate with remarkable flexibility - has been a crucial ingredient in their continued success, enabling them to navigate inevitable challenges effectively.
In the gaming industry, balancing efficiency (ROAS vs. $ spend) and creativity is crucial. While efficiency matters, long-term success (e.g. long-game life and retention) in the sector often hinges on maintaining a strong creative vision.
SuperPlay executed this principle consistently, continuously introducing new content within existing games while optimizing players' experience. Their focus on long-term retention enabled them to prioritize creativity, iterating endlessly to make the games appealing, innovative, and fun.
Furthermore, after the success of their first game, Dice Dreams, the founders strategically transitioned creative responsibilities to a new team, allowing Elad Drory, the creative force, to focus on new projects. This approach sustained creative energy and led to the development of a second game, Domino Dreams which became an important pillar in SuperPlay.
A robust technological foundation is an essential factor in any gaming company as it not only facilitates the creation of high-quality games but enables a company to adapt and evolve rapidly, which is crucial in the ever-changing gaming landscape.
SuperPlay’s decision to build Dice Dreams in a 3D environment was a strategic move that laid the groundwork for future game developments. This technical foresight streamlined their development process and positioned them for ongoing success in a competitive market.
SuperPlay’s approach to decision-making and market adaptation has been instrumental to its success. Management has demonstrated a keen ability to understand market dynamics and adjust strategies based on performance data (daily if needed). This data-driven approach allows for real-time optimizations, a critical factor in the rapidly evolving mobile gaming market.
That relentless approach, and (in the most positive way) obsessive focus on data played an important role in SuperPlay’s successful navigation through the choppy waters of B2C, and daily engagement with customers.
In summary, SuperPlay’s exceptional team, unique culture, deep industry knowledge, balanced approach to creativity and efficiency, robust technological foundation, and data-driven decision-making highlight key factors for success in the mobile gaming industry, ones that have led to building such an exceptional studio and for us to build conviction about the potential of SuperPlay to be the success it has become.
We feel privileged to have played a part in such an incredible journey.