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Fueling Epic Wins: Skillz Puts Developers First with Innovative Revenue Model

By Brand Creative on May 11, 2023 in Blog Posts

By: Andrew Paradise, CEO of Skillz

Skillz was founded on the idea that everyone has skills and deserves an epic win. Games capture our imaginations, enrapture our attention, and challenge us to bring forward our best selves. For this reason, game developers are the lifeblood of Skillz – they’re the ones who dream big and create games that players love.

We empower game developers to build thriving businesses on our competition platform, so they can focus on their craft: creating games. By doing so, we are also enhancing the player experience. I strongly believe that competition is one of the most player-centric monetization tools. It immerses us with content rather than relying on ad campaigns or in-app purchases that disrupt game play. With that in mind, and as part of our unwavering commitment to game developers’ success, we recently introduced a new revenue model enabling them to achieve greater financial results while pursuing their passion for building engaging games.

The truth is that game development hasn’t always been a fair playing field.

Let me share an example: in 2013, Flappy Bird was the most popular game in the app store. It was created by the Vietnamese video game artist and programmer, Dong Nguyen, who was making roughly $1.8 million a year. That is no small feat, but the game that ended up taking the number one spot that same year, Clash of Clans, was making roughly $3.5 million a day. The difference was not that gamers were enjoying or spending more time playing Clash of Clans – in fact, the engagement was relatively similar. Clash of Clans retention was higher because it was built by a giant mobile game development company that had significant venture capital financing to optimize monetization. Clash of Clans’ systems of monetization put Flappy Bird at a disadvantage; one that, in my opinion, was incredibly unfair.

At Skillz, we passionately operate with fairness so everyone can win – players and developers alike. This philosophy extends to our new revenue share terms.

Skillz’ New Revenue Model for Developers

The new Skillz revenue model is an opportunity for developers to earn more money, based on the number of paying players on their game. If they have a hit on their hands, they have the potential to maximize their profit up to 94% of available revenue. We built this sliding scale to acknowledge an individual developer’s contribution to Skillz, and they’re able to earn almost all available revenue for their effort.

Rather than capping revenue opportunities, we are empowering game developers to maximize revenue potential. Put simply – the more they achieve, the more revenue they make. A tiered system where developers scale up the percentage of revenue they receive based on game performance is core to our values as a company and our belief that competition is the true enabler of achievement.

Revenue transparency plays a big part in ensuring the model is successful. Through a dedicated Developer Console, developers have easy access to actionable insights such as total installs and traffic, revenue, game performance, and near-instant user analysis and data to inform game development. That way they are always on the pulse of the business and able to calculate how they are performing whenever they want to.

More Revenue Potential Enables Better Gameplay

As an example of how our new revenue share model works: let’s suppose a developer’s game earns $1,000,000 in entry fees in November and the best month performance for the game over the last three months (September, October, and November) was 200,000 new user installations and 600 first time payers. In our new revenue share model, this would be a Tier C ranking for November and the developer would receive $1,000,000 times 5%, or $50,000, less any applicable taxes. The 5% of entry fees that the developer receives is actually about 63% of the available revenue for November.

Something often overlooked in mobile game monetization is how complicated taxation on a nationwide platform can be. Taxes vary across all the countries and states based on where players are located, but it’s commonly a very small amount, relative to the available revenue. A huge benefit we bring developers is navigating the tax complexity for them – developers don’t have to deal with any of the tax processes or forms, because that’s part of what we do for them as the platform.

Long-term customer Tether Studios sees the potential for the new model. Tim O’Neil, Co-Founder and CEO at Tether, added, “Thanks to Skillz’ forward-thinking approach, we can now fully monetize our games and build a sustainable business, driving our passion for game development to new levels.”

At Skillz, we love gaming and have a deep respect for game creators. We work hard to support developers in unlocking economic opportunities through their craft, in a way that’s beneficial for everyone. Our new revenue model opens a door to monetization for mobile game developers that rivals the other methods, and we’re excited to see the impact it’s already having on the industry.

Developers are imperative to the games we know and love, and we’re proud to provide a new revenue model that doubles down on their success.

Andrew Paradise
CEO, Skillz

If you’re a game developer or studio interested in adding your game to Skillz’ growing platform, please contact Skillz Developer Relations at devrel@skillz.com.

Building an Agile Culture of Achievement

By Brand Creative on March 9, 2023 in Blog Posts

by: Andrew Paradise, CEO of Skillz

Skillz was founded on the idea that everyone can compete – and win – based on their own unique skills. The thrill of achievement that we all experience when we overcome a challenge and level up is what makes playing games so rewarding.

As we evolved as a company, we came to realize that the true power of achievement goes beyond gameplay itself. The drive to push through, break barriers, and find our true potential is core to what makes us human. In many ways, our achievements build grit, and give us all a sense of purpose as we progress in life and in business.

With the mission of bringing out the best in everyone through competition, we had to ask ourselves: how do we bring out the best in our company? For us at Skillz, this means fueling the drive to win as a team. As we entered 2022 with a goal of building our future towards profitable growth, focusing on achievement could not have been more important.

Creating a more agile, impact-driven culture is a continual journey, but an important one. Thriving on change is not just core to the spirit of Skillz, but a vital ingredient for any company looking to win in the speed of business in today’s world order.

Our five guiding principles for building an agile culture of achievement:

Act as business owners, not employees.

Benjamin Franklin once said: “Those who achieve make many mistakes, but never make the biggest mistake of all – doing nothing”. Acting like business owners rather than employees is what makes Skillz’s culture so unique. This focus on ownership empowers us to be more accountable while acting more like entrepreneurs – regardless of seniority level or title. When we do so, we’re more likely to be creative and innovative, finding new ways to improve while questioning the status quo. At Skillz, each business function writes business plans guided by desired results and 1-5 year visions. We follow a systemized grading system that helps us all define success and monitor our progress as a common language. In our most recent employee engagement survey, 90% of Skillzians indicated that they clearly understood how their work contributes to our goals – a strong indication that our company-wide agile approach and focus on achievement has helped us all feel connected to our business and the impact we drive.

Focus on results, not activities.

Typically a workforce focuses on accomplishing activities: scoping, managing, or completing projects. At Skillz, we realized that this type of operating model doesn’t always yield results or move the needle. Simply put, what impact did all that energy expended on the to-do list actually deliver? We found ourselves pondering that often, and realized we needed to make an intentional shift to focus on the results of our actions, rather than just getting things done. By doing so, we were able to define the value of our efforts and found it easier to prioritize initiatives across our company.

Move with agility. Adopt a product-mindset.

Skillz is a product-led organization, but a product mindset doesn’t have to be limited to one function – it can permeate across the entire company. We all have customers – whether it’s our players, our developers, our investors or our colleagues. That means we each have a ‘product’ to offer – from the technology we deploy to the support and enablement of our business to function everyday. Everyone at Skillz, including PeopleOps, Finance, and Workplace teams, adopts a weekly sprint approach which enables them to focus their attention on progressing through business-critical projects. A 12-week plan enables everyone to show steady incremental progress towards goals and measure results in real-time against our targets. Each week we track if we achieved what we set out to do, while highlighting mid-week any blockers along the way. Most importantly, we learn and improve as we go – something that wouldn’t be possible if we waited to mark a project as complete and measure once done.

Find the ROI in everything (yes, everything).

Every company has fixed costs that are necessary for any business to function. Commonly, these expenses are just seen as the cost of doing business. Because investing in our people, systems, and processes are critical to a successful outcome for our business, we aim to attribute an ROI to them through either hard or soft measures. Our guiding principle is that any investment or initiative – including hiring and operations – should either increase revenue or save costs. With that in mind, we simplified our company structure and removed a dedicated revenue group, as every organization at Skillz should fundamentally have an impact on our bottom line.

Take the (calculated) risk.

We work to tie everything we do to business impact so we can draw a clear picture of our level of investment, level of risk, and expected return. While it might seem like this focus on results means we’re risk-averse as a company, the reality is that we’re using this information to see if there are opportunities with asymmetric upside. We are much more inclined to invest aggressively in a higher-risk option than stick with a traditional, low-risk option if we know all the facts and have clarity on what we can achieve. 

While the Skillz platform enables players and game developers alike to experience a sense of achievement, I am energized by the fact that our culture is guided by the same northstar. Innovating the way we connect, collaborate and write our next chapter together, has been a true game changer with a positive trajectory on our company and community. 

Andrew Paradise

CEO, Skillz
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