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Chukong Rides China's Android Wave To 14X Its Gaming Revenue Year-Over-Year
With a tidal wave of Android devices finally supporting real revenues for app developers in mainland China, the biggest domestic mobile game makers are scaling up quickly.
Chukong, the parent company behind mainland China’s hit game Fishing Joy, says its revenues are up 14 times year-over-year in the first half of this year, according to Jimmy Lai, the company’s chief financial officer. Back in July, the company said it has passed monthly mobile game sales of $12 million, and expected to end the year with more than $150 million in revenue. They’re also now 700 employees strong, although Lai declined to update the revenue figures for this month.
Keep in mind though that this is gross revenue. This figure doesn’t count the amount that the company has to pay out to payment providers or the local Android app stores.
Unlike the U.S. market, which just has two major platforms in Android and iOS and a standard 30 revenue share given to each, China is much more complicated.
There are numerous Android app stores, which can charge a 40 to 50 percent rate, plus mobile operators which run the billing services. What that means is that developers typically see less than half of each dollar they pull in through in-app purchases.
Most of Chukong’s revenue comes from their first-party games. Perhaps 30 to 40 percent comes from the titles they publish on behalf of other developers.
“That’s starting from almost nothing at the beginning of the year,” Lai said. He brushed off questions about a possible IPO for the company
“We haven’t started anything. Because we’re VC-backed, clearly an IPO would always be one of our options.”
The company took $14 million in funding from Sequoia China and Disney’s Steamboat Ventures and has backing from other firms like Northern Light and Granite Global Ventures.
With that funding, they’ve built out a side-by-side first party development studio and a publishing program. Those two arms have produced about eight of Chukong’s own games, plus 50 other third-party titles.
Through that network, they reach about 63 million monthly active players and about 11 million daily actives. About 90 percent of their players are from mainland China and the company’s flagship title Fishing Joy makes up the bulk of that.
The company is beefing up its third-party publishing offerings by building in a social layer allowing chats between players. Many other predecessors like PapayaMobile, which was another China-focused mobile gaming platform, have tried this. But perhaps they were too early to market.
Chukong also gives away a game engine called Cocos2dX to developers. It’s used by about a quarter of the top 50 game developers, as ranked by PocketGamer.
“It’s very pertinent for us to contribute to this industry. We put so much in this game engine and give this source code for free,” said Liu, who added that the company has about 50 people working on the project. “We don’t think of ourselves as like other Chinese companies, as we want to support the industry as a whole.”
They face a couple of strategic challenges in the next year. Tencent’s WeChat, which has become the mobile social network of choice in mainland China with north of 236 million monthly active users, is becoming a mobile gaming platform by adapting Kakao Talk and Line’s strategies for China.
But the company’s chief operating officer Gary Liu says that Tencent can’t possibly own the market.
“The market might be worth 24 billion renminbi ($3.9 billion) in 2014 and we think the WeChat platform could reach maybe 5 to 6 billion of that,” Liu said. “We don’t think they could exceed 30 percent.”
He said this is especially true if the Tencent doesn’t open up the Wechat, or Weixin, platform to third-party game makers.
Exec Drops Prices For Its Home Cleaning Service By 25 Percent
Exec says that it’s dropping prices for its home cleaning service in all nine markets by 25 percent.
Founder and CEO Justin Kan told me that customers will still get a fixed quote for the entire cleaning, but the change effectively lowers Exec’s prices to $22 per hour per cleaner. (Among other things, that makes Exec more competitive with the pricing of Homejoy, which charges $20 an hour.) He also said that gross bookings for the service have been growing by an average of 28 percent per month for the past four months.
“After surveying users and getting feedback for the past couple months, one of the biggest pieces of feedback we’ve gotten was that we could be providing more value, and our customers would use us more if we were priced lower,” Kan told me via email.
Kan added that Exec can lower its prices significantly because it’s eliminating “our deeper cleaning options” (such as cleaning walls) from the basic service, and then charging for them on an a la carte basis.
Exec actually launched as a more general on-demand errand service, but over time, its focus has shifted to cleaning, and at announced plans to shut down the errand service last month. At that point, cleaning already accounted for 95 percent of the hours worked at Exec, Kan said.
“We decided that it was for the best to focus on what was working, even though I personally loved using errands,” he added. “Like the decision to focus Justin.tv [which Kan founded] on Twitch, which seemed like a niche at the time, but eventually grew much bigger than the horizontal platform, I think this will look like a smart decision over time.”
(By the way, Exec’s investors include CrunchFund — which, like TechCrunch, was founded by Michael Arrington.)
My Government Is A Complete Mess: Obamacare Websites Failing Amid Government Shutdown
The U.S. government is a complete mess. Congress could not even perform its basic constitutional duty to fund the government and had to shut down most of the public system. Amid the partisan spectacle, the White House promised that the shutdown would not interfere with a new website for comparing health insurance prices, which is now mandatory under the Affordable Care Act, or Obamacare.
Unfortunately, the comparison site, the Insurance Marketplace, is a rash of glitches and delays: parts of the website intermittently crash, some states don’t have the promised calculator for comparing prices, and at least a few states and demographics don’t even have access to the marketplace.
Regardless whether you’re a libertarian, it is exceedingly difficult right now to have faith that government can follow through on its promises.
Since the summer, the Obama administration has been prepping the American people for the introduction of the new healthcare law. A major part of getting everyone to sign up for (mandatory) health coverage is a new website that, for the first time, permits Americans to easily compare prices and plans.
Yet, starting a month ago, the plan started to unravel. The exchange for small businesses has no launch date. The entirety of Washington, D.C. is also delayed. Last night, I couldn’t access Oregon’s Internet Marketplace, which, ironically, was a White House case study in how transparency could lead to more competitive pricing.
Today, the website appears functional, but the most important part, the insurance calculator, has crashed.
Oregon isn’t the only failed website: For at least part of the morning, the main site, healthcare.gov, was down; Florida residents couldn’t finish the login process; Nevada’s Spanish-language site isn’t ready; Healthcare.gov’s live help chat system was down; Maryland residents were reportedly unable to sign up; and Colorado’s website can’t properly calculate subsidies.
“These problems can have costly consequences. At least a half-dozen states, including Colorado and Oregon, have said that they won’t offer full online enrollment through their exchanges because the federal hub that is supposed to link to help them determine the subsidies people are eligible for isn’t working properly,” writes American Enterprise Institute fellow Scott Gottlieb, for the Wall Street Journal.
“If the hub can’t verify this, the individual will get booted from the ObamaCare enrollment system and shifted to a call center for confirmation by an ObamaCare agent who is likely to be fielding a deluge of complaints. Some people will end up getting subsidies they weren’t qualified for. Washington eventually will have to try to claw back the money. This will create a massive pay-and-chase challenge as people move in and out of the exchanges and get subsidies that many of them won’t even know they didn’t deserve.”
Now, President Obama is warning of months of glitches.
Yet, even under the best scenario, where the government can maintain a website, the pricing information is misleading.
“People may be totally motivated by the cost of the policy and spend not an adequate amount of time looking at the deductibles and the co-pays and what is covered,” Kenneth Davis, CEO of Mount Sinai hospital, tells me.
Consumers, especially those who have never had health insurance, lack the knowledge to properly understand all the potential costs down the road. A high deductible may mean poverty-threatening costs for those who choose the cheapest plan. When the health insurance exchange eventually rolls out, the average consumer will be inundated with 52 options. Under that combinatorial nightmare, many will select on price alone, potentially under covering themselves.
Worse, few actually know the costs of the medical procedures. Adjacent hospitals are known to charge radically different prices for exact same service.
Ezekiel Emanuel, President Obama’s former healthcare advisor, told me that he expects a cottage industry of private comparison sites that better tailor a consumer’s options to their individual needs. But, he predicts they won’t be around until the end of 2014.
Why wait till 2015? For some inexplicable reason, the comparison websites are run entirely by the states. I reached out to Health And Human Services a week ago to explain why they didn’t open up the pricing data to individual entrepreneurs, and have yet to receive a response.
In short, my government is a colossal failure right now.
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Matt Lira (@MattLira) October 01, 2013
Quirky, The New York-Based Invention Machine, Brings On Doreen Lorenzo As President To Build Out Product Categories
In an effort to scale its product development capacity, Quirky, the creation funnel for crowd sourced invention ideas, has hired as president Doreen Lorenzo, formerly the president of design consultancy firm frog design. Prior to Lorenzo’s arrival, Quirky operated without a president.
Quirky CEO Ben Kaufman said that Lorenzo will be running product organization, the department devoted to transforming an idea submitted by a community member into a commercial good. Product represents about half of the company’s operations and is Quirky’s fastest growing department, Kaufman said.
As it has scaled from one person to a 75-person team, Quirky’s product development department has been able to move from creating plastic kitchen gadgets to more complex designs, like electronics.
“Next year we’ll move into more product categories,” Kaufman said. “That’s why Doreen has been brought into the scheme.”
Those categories could include further work with electronics, sustainability projects, products requiring chemical engineering — anything that is needed for Quirky to serve as a machine for the world’s new ideas, essentially.
Six months ago, Quirky announced a partnership with General Electric to develop smart home products, like an app-enabled milk jug. The partnership opened up GE’s patents and technologies to Quirky’s product development, giving the latter the capacity to scale its capabilities.
“With every new category that we decide to take on, we bring on a whole cross-functional team. With GE, we brought in electrical engineering, firmware design, software, and user experience,” Kaufman said. “We’ll be doing that similarly with all the new categories. There will be a lot of new people, and I don’t have numbers, but it will be significant.”
The company, which Kaufman hesitates to call a startup any longer, has also begun its international expansion with the announcement a little over two weeks ago that it was launching a French division in conjunction with French retail group Auchan.
Kaufman said that Quirky would be continuing to build its platform with localized invention sites (if you have submitted a project in the US, you are unable to do so in France, too). He would not reveal which market Quirky will take on next, noting instead that there are a lot of design centers that people look to for the next iconic product.
“We project by the end of this year we’ll be around 5 to 20% sales internationally, and by next year 40 to 50%,” said Kaufman.
Quirky now launches three products each week, each of which is voted on by the community and prototyped the company’s New York headquarters. Those products are sold in 30,000 retail stores including, the MoMA design store, Target, Home Depot, and Best Buy. Everywhere except Walmart, Kaufman said.
[Image from the New York Times]
Payments Startup Cover Launches Out Of Beta To Let New Yorkers (Legally) Dine And Dash
Though hopefully none of us have ever pulled the old dine and dash, we’ve probably all thought about getting up and walking out on a restaurant check before.
Today, restaurant bill-focused payments startup Cover launches out of beta in New York city to let you pay your bill and never wait for a check again.
The app dubs itself the Uber of restaurant bills because it simply lets a single guest pay the bill through the app, and walk away. Or, for those who travel in larger groups, Cover will automatically split the bill between guests evenly.
The main focus behind the app is simplicity. Simply check in to the restaurant as soon as you arrive, and the bill will hit your credit cards, including your preferred tip settings, as you leave. It’s as simple as that. That said, a group of ten people automatically split the bill, even if one didn’t drink and ordered a bowl of soup while the other had a steak dinner with dessert.
Cover spent the last year testing the different ways of splitting the check, with varying levels of control put in the hands of the user. “At the end of the year, we realized it was a much better experience to auto-split the check,” said Cove. “We realized if we give the user control, they’ll spend the last part of the evening with their phones out, fine-tuning everything on the bill.”
According to Cove, Cover is taking the awkwardness and the debate out of the end of the night.
Unfortunately, to implement its system, Cover must manually partner with restaurants, a process which is controlled by Marc Egerman. The entire team is comprised of 6 people, including founders.
So far, that includes 16 restaurants signed on to receive payments by app at the end of a meal, including Charlie Bird, Estela, Rouge Tomate, Carbone, ZZ’s Clam Bar, Empellon Cocina, Riverpark, El Toro Blanco, Burger & Barrel, Northern Spy, Parm, Burger & Barrel, Yunnan Kitchen, Swine, Exchange Alley, City Grit, and Tarallucci e Vino.
Eventually, the app will move to a self-service model with merchants, who can use the app for free and save money through Cover’s uniquely structured transactions, yielding lower interchange costs. Even still, every transaction is profitable and Cove reveals that Cover only needs a surprisingly low number of users to turn a profit, as the company makes “a decent margin”.
Cover isn’t alone in its quest to smooth out payments at restaurants through mobile, as TabbedOut and even Square are also playing in the space. Still, the mobile payments company backed with $1.5 million from OATV and others is ready to go with an ultra-simple payments method available today.
Check out the app right here.
Mounza's App Connects Students To On-Campus Recruiting Events
Sharran Deora said it took a lot of hustle to get his first job out of school.
“I went to Rensselaer Polytechnic Institute. I didn’t have the right connections,” said Deora, who was dreaming of working in banking. He ultimately ended up at Lehman Brothers and then Barclays Capital in product marketing and product management.
But now that he’s back out of the finance industry, he’s looking to solve that old problem of finding the right career connections for future graduates.
He’s launching an app today called Mounza for Android and iOS, that puts together all on-campus recruiting opportunities in one place. He’s starting with Stanford and UC Berkeley through partnerships with about 25 on-campus organizations like the Stanford Technology Ventures Program and the Berkeley EECS (Electrical Engineering & Computer Science) department.
“The career center mayabe only holds 5 percent of recruiting events on-campus,” he said. “The majority is coming from the clubs.”
Students can in-put their own events and subscribe to specific career fields for events in medicine or finance. The number of users in the beta right now is still pretty small at about 3,000 users.
But Deora said that active users are logging in about twice a day and that the company hasn’t done any active marketing.
He says that he’ll be able to expand campus-by-campus by marketing the app through the national parent organizations of different business clubs and fraternities.
As for the business model, Deora said he plans to charge recruiting companies and corporations about $100 a month to get access to the app for posting jobs and hosting events.
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