Why we invested in Mojiworks, the first company building games only for messaging platforms

*** This post was originally published on my Medium page ***

Five years after selling Wonderland (the company behind GodFinger) to Zynga, Matthew Wiggins and Al Harding announced the launch of their new company Mojiworks. The very same day, Facebook opened Messenger to select game publishers.

We wanted to use this opportunity to share a few words on why we decided to back Matt & Al on their journey.

The first creator of games 100% dedicated to messaging platforms

Mojiworks are building multiplayer games that you play without leaving your messaging app. Game sessions fit seamlessly in-between messages from your friends. The company released their first prototype MojiQuest on top of iMessage shortly after iOS10 was released, which is a collaborative RPG that Matt and Al built in 6 weeks. They are now working on their next titles across a variety of different genres. The video below gives a taste of some of the new interaction mechanisms possible on this platform.

One of our core investments thesis within gaming, spearheaded by Sunstone’s venture partner Nikolaj, has been to back companies looking to dominate new platforms. Mojiworks is our latest investment in this category, following Everywear (wearables) and Fast Travel Games (VR).

Messaging is a new horizontal platform

I think of messaging as real-time, text-based, asynchronous communication between several parties. Throughout the history of computing, messaging has been a killer application on each successive platform: from the first time-sharing operating systems in the 60’s (!), to our PCs in the 80’s/90’s, our feature mobile phones in the 90’s, and our smartphones in the 2000’s.

Something changed 3 years ago in China when Tencent opened up WeChat to external developers. In the space of a few months, WeChat went from being a messaging app to becoming the default destination for people to hail a taxi, order food, send money, book a doctor appointment, recognise music, or meet strangers around them… Messaging went from being an application to becoming a horizontal platform, an alternative mobile operating system. As of today, many Chinese startups are not bothering to build apps anymore and are instead launching solely as a WeChat bot. This trend is now also well underway in the West, as Telegram, Apple, Facebook and Slack all recently opened their messaging apps and are turning into horizontal platforms.

For most utility-based applications, messaging seems like a nice feature, but it’s difficult to see this platform shift being a major source of opportunity…

Most applications on our phones are utility-based. We keep them because we need them to do something for us: from ordering a pizza, to accessing a boarding pass, locating a restaurant in a new city, or finding a car to take us there. By accessing these services via Messaging we (sometimes) save time. We also spare some precious cognitive bandwidth. If you are like me, you probably have 50+ apps on your phone, 80% of which you only use a couple of times a year. You don’t want to delete them because you know you’ll need them at one point. These 80% dormant apps are exactly the ones that we will likely turn into invisible bots, and would rather access via messaging. However, the fact that I can order a taxi by conversing with a bot is not going to make me order more taxis.

…but gaming and other entertainment applications have a real opportunity to piggyback on messaging’s reach and frequency of use

Gaming is about entertainment, not utility. Dopamine kick aside, you don’t “have” to open Clash Royale. You do it because you feel like it’s a good relative use of your time. In that sense, entertainment applications are all competing for our attention. This is were Messaging stands out as a particularly interesting platform, because it is inherently viral and sticky.

With over 2 million apps on the iOS app store or the Google Play store, discovery has become a major problem in gaming. User acquisition has become extremely expensive, and only a handful of gaming companies are able to acquire users profitably online. Besides, more downloads brings more app store promotion, which in turn brings more organic downloads, etc.. This self reinforcing loop made it incredibly hard for newcomers to break through the app stores. Contenders have had to resort to innovative brandand influencer marketing e.g. Seriously, or build games with built-in network effects, usually centred around user generated content e.g. Traplight (both companies are Sunstone backed). Mojiworks and other companies building games on top of messaging have an opportunity to bypass the app store for discovery: I can send you a game session and invite you to try the game without you having to download any app, or even leave our conversation.

When it comes to retention, these companies also have an interesting opportunity to bypass the native push notification system. They will resort a lot more on direct p2p invitations to continue playing, as opposed to generic developer prompted notifications. I feel a lot worse letting my friends and our team down by not following up on their messages, than I do after ignoring impersonal push notifications sent by app developers (that’s if I haven’t already turned them off).

We are excited about this new platform’s potential to level the playing field within mobile gaming. Newcomers building compelling experiences will get a chance to reach the top quicker.

The defining company building games for messaging platforms

Mojiworks’ vision goes beyond piggybacking on messaging’s reach and frequency of use for user acquisition and retention. Just like us, Matt and Al believe that every new platform brings an opportunity to build a large entertainment company. Rovio and King did it on smartphones, Supercell on tablets, Zynga on Facebook. Mojiworks is looking to go back to the core of what messaging is about, in order to design refreshingly new gaming experiences. Experiences that would not be possible to design on another platform.

We invested in Mojiworks alongside our friends at Lifeline Ventures. We’re delighted to be backing this team — a warm welcome to the Sunstone family!