Plarium · B2C · mobile game studio
Sell mugs, t-shirts and hoodies to a game's biggest spenders
What they did
In their words
Buying vs. Building: Scaling Beyond a Single App — Josh Peleg, BlueThrone
Josh PelegYeah, yeah. If they figure it out. So just a word of warning there on that one.
Josh PelegOther thing to add is, so when I was working at Plarium, the guys who made RAID: Shadow Legends, which, for those who don't know, is a huge RPG, kind of hero-collection game that was doing about a billion a year in revenue at its peak. And one of my projects back there was to build the physical merchandise line for this game. And so we looked into the different types of customers and what they're willing to spend on and what their likes were. And the way we were analyzing it was not as an additional revenue stream, but "How can I increase the LTV of these users using physical products?" And it might be a mug for $6. It might be a t-shirt for $20. Or it might be a super-premium hoodie for $50. And I know that with my whales that are 2% of the user base, give or take, that are spending thousands of dollars on this game, I can then do this easy add-on of a premium product just to show off their fandom for the game and use that to actually influence my marketing spend because I'm actually increasing my LTVs there.
David BarnardThat's really cool. I like that. There's just so much opportunity in this space to figure out ways to lever up and grow in so many different ways.
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More from this episode
- Buy about 100 small utility apps valued mostly on profitMany had been pumped before sale and died; shallow products didn't last
- Buy only a few apps with strong organic traffic and invest in their teamsPortfolio cut to 5 apps, each a category leader or on its way; guest says it works
- After buying a music app, hire a GM from Spotify and triple the teamMAU grew from 200K to almost 6M; still near the top of its category
- Build an in-house team making cheap UGC TikTok videos for the appsFirst viral video took 6 months and several people; gets faster with practice
- Sell power-ups on top of the subscription, like 2x more songs nearbyGuest says it captures what each user is willing to spend; no numbers
- Build solo without VC money, then sell the app within 18 monthsSold for over $4M; deal closed in 3 months with no investors involved
- Charge $120 a year and pitch it as paying for itself in work timeGuest says it unlocked very high LTV; no figures beyond price
- Launch a rough app, prove people pay, then build the real techHost says it's now a genuinely great app; no numbers
- Push the lifetime plan on the paywall right before selling the appKnocks down negotiations; the buyer can't monetize those users again
- Cut ad spend from $50K to $10K a month to look profitable before sellingDownloads eventually follow the drop; guest calls it riskier than pushing revenue
- Add in-app coins that people earn from ads or buy in packsApps that crack consumables reach deeper LTVs, per talks with hundreds of founders
- Before buying an app, compare its return per dollar with more ad spend
- Stack category downloads over time to see if new apps grow the marketScreen time market grew with each new entrant; buying a non-leader looked OK
- Keep a bought app separate and sell one subscription for both apps
Tags: physical-goods, merch, whales, ltv