A One-Man Gaming Startup Sold for $54M

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Good morning! It's Thursday, July 20th - Today we’re covering how gaming startup Wargraphs reached a $54m valuation even though they don’t make any video games. Let’s get started!

THE FEATURE

A One-Man Gaming Startup Sold for $54M

Jean-Nicolas Mastin just sold his gaming startup, Wargraphs, for $54M to MOBA Networks.

Let’s dig into how this one-man startup was able to acquire an 8-figure valuation.

What’s Wargraphs?

Rather than developing video games, Wargraphs provides gamers with analytical tools to evaluate their multiplayer matches in real-time and improve their gameplay. Currently, Wargraphs only provides analytics through their application, Porofessor, for the game League of Legends… but that game has a whopping ~30M daily players.

MOBA Networks, a Swedish company that buys, grows, and runs online gaming communities, is purchasing Wargraphs with the hope to expand its analytics platform to more markets as well as to new games. Mastin received many acquisition offers in the past, but never wanted to sell his creation just for the money. The MOBA Networks deal appealed to Mastin because it enabled him to expand his analytical tools to more areas in the gaming world.

Mastin’s Porofessor has 10M downloads on Overwolf, a gaming and modding platform that helps creators share and monetize their in-game apps. Due to the utility of the app, it traffics over 1.25M daily users.

Since Wargraphs is solely operated by Mastin, the company doesn’t have many expenses and has always been profitable. While this isn’t that surprising, the revenue for this one-man operation is. Last year, Wargraphs generated $16M in revenue which almost entirely came from selling ad space on their free-to-use Porofessor website and app.

How Mastin Wins

Referral program

To help drive growth, Mastin created the Porofessor Partners Program where eSports players and content creators can get paid to promote the analytical tool. When their followers use a partner link to download the app, creators get paid.

Acceptance into the Porofessor Partners Program is relatively easy. Content creators must average at least 5,000 views on their YouTube videos and have 100+ concurrent viewers on their livestreams. Also, at least 50% of their content must be related to League of Legends.

These guidelines are not difficult to meet by any means, but that’s by design. Mastin’s referral program entices tons of partners from small streamers to well-known League of Legends eSports players and therefore magnifies awareness of Porofessor to the entire League community.

Understanding consumer needs

Mastin’s League of Legends application is such a hit among hardcore players because he personally loves playing the game and has in-depth knowledge of what users would want out of his analytical tools.

When asked about the success of his app, Mastin had the following to say:

“Wake up each morning and ask yourself — What do my users want or need right now? As soon as you have an answer, chase it down quickly…Find your audience niche and make that audience happy. The more useful your app, the more they use it, the more successful the app and you will be.”

Having a genuinely useful app has also helped drive Porofessor’s organic growth. When League of Legends players watch eSports veterans stream games and see them utilizing Mastin’s analytics platform, they too download the app to enhance their gameplay.

Key Observations

The global video games market is currently valued at $189B. Video games specifically are at the center of this industry, but Wargraphs shows how products and services around these games can become significant areas of value as well.

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