Case Study: How Blinkmoon Games uses whatifi to predict video game revenue

Blinkmoon Games is a Vancouver-based video game company that specializes in creating immersive, lore-rich, competitive games. Founded in 2021 by VFX veteran Hugh Behroozy, the company was facing the challenge of determining how much funding they needed to launch their first game, as well as how to price it appropriately and staff their team.

To address these challenges, Blinkmoon Games and their CFO Hajeir Mazinani, turned to whatifi, a financial modeling and scenario planning software that helps companies make informed decisions about their finances. With whatifi, Hajeir was able to create a detailed financial model that projected their startup runway, staffing decisions, pricing for their games, and the financial returns they could expect.

While there are plenty of financial modeling tools on the market, including spreadsheet standards like Excel, whatifi can model dozens of financial scenarios concurrently; all in a visual, drag-and-drop style user interface.

“The ability to easily make changes on the fly and present the outcomes during a live meeting is a game changing tool. What would normally take multiple meetings to satisfy the questions of a group of stakeholders can now be done in one meeting.

You can build a whole scenario from scratch with a few clicks in a format that can be understood by any one, regardless of their level of financial knowledge.”

- Hugh

Using whatifi's simulation platform, was able to make data-driven decisions about how much funding they needed to raise in order to launch their first game. They were also able to simulate different scenarios, such as what would happen if their sales were lower than expected, and adjust their financial model accordingly.

Modelling Freemium in Video Games

whatifi also helped determine the optimal pricing strategy for their first game. By modelling out different pricing scenarios, Blinkmoon Games was able to see how different price points would affect their profitability and sales volume, allowing them to make an informed decision about how to price their game for maximum profitability.

Check out an example of Blinkmoon's financial model (DESKTOP ONLY) here:

LINK TO SAMPLE FINANCIAL MODEL

The freemium pricing model can be lucrative for game developers. It also presents some unique challenges. One of the main challenges of this pricing model is the need to balance the interests of both “whales” and “minnows”.

Whales are players who are willing to spend large amounts of money on in-game items or upgrades, while minnows are players who either don't spend any money at all or only spend small amounts. To maximize revenue, game developers need to cater to a range of players and spending patterns.

Catering to whales can lead to accusations of pay-to-win mechanics or unfair advantages for those who spend the most money. This can turn off minnows, who may feel like they can't compete without spending money.

On the other hand, catering too much to minnows can lead to lower revenue overall, as these players are less likely to spend money. This can make it difficult to sustain the game's development and ongoing support.

Another challenge of the freemium pricing model is the need to continually release new content and updates to keep players engaged and willing to spend money. This can be a time-consuming and costly process, and it requires a significant investment in ongoing game development.

Finally, the freemium pricing model can also lead to unpredictable revenue streams, as players may stop spending money at any time. This can make it difficult to plan and budget for future development or marketing efforts.

Despite these challenges, many game developers have found success with the freemium pricing model. By carefully balancing the needs of whales and minnows, and investing in ongoing development and updates, game developers can create a sustainable and profitable business model.

How Blinkmoon Tested Freemium Pricing Outcomes

The team at whatifi modelled Blinkmoon’s complex revenue model using the Customer, Customer Growth, Customer Churn, Segment and Allocation Events.

Cohorts of gamers were divided into three distinct segments - whales, dolphins, and minnows.

 "whatifi allows us to visually calculate and foresee outcomes, in real-time, in a way that is much more robust than any Excel sheet or graph"

- Hajeir

Most games have a lifecycle of active play. Using an Allocation Event, Hugh and team could then be assign different allocation percentages, monthly spending amounts and lifetime gameplay durations. Using this base model, they were then able to project multiple growth, gamer acquisition costs, churn, KPIs and possible ROI on their development dollars invested.

Telling The Story - Artists and Investors

Video games tell a story.

The artists and the developers craft this story. Yet they are the single biggest expense for a gaming company.

Investors need to understand how their money will be put to work, the risks, and the timelines for a return on their investment.

whatifi helped Blinkmoon Games to make decisions about staffing their team and when to bring on new hires. By modelling out different hiring scenarios, the team was able to determine the optimal number of employees they needed to hire, as well as the impact that each new hire would have on their bottom line.

Like a physical assembly line, video games go through many stages of development with highly specialized (and expensive) talent touching the game at various points in time. A significant business risk is when a game takes too long to come to market.

Finally, whatifi was instrumental in helping Blinkmoon Games to pitch investors. By providing detailed financial projections and on-the-fly “what ifs”, Blinkmoon Games is able to show current and potential investors how their investment will impact the company's financial position and growth prospects.

“In such a chaotic and fast moving industry, the ability to pivot is critical. whatifi allows me to see my ideas reflected financially on our short term and long term financial models instantly and with comfort, something that Excel was not able to provide. It’s no longer something that needs to be guessed and later detailed out, we can see all the scenarios play out at once and utilize the best path forward.”

- Hajeir

The result of Blinkmoon Games' use of whatifi was a much more informed and data-driven approach to financial decision-making. By using whatifi's modelilng tools, Blinkmoon Games was able to make confident decisions about their funding needs, pricing strategy, staffing decisions, and investment pitches.

In conclusion, for any CEO or CFO looking to make better financial decisions, whatifi is an invaluable tool. By providing detailed financial modelling and scenario planning capabilities, whatifi helps companies to make informed decisions about their finances, allowing them to grow their businesses with confidence.

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LINK TO SAMPLE FINANCIAL MODEL

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