Published on the 16/05/2011 | Written by Newsdesk
TradeMe founder Sam Morgan has given New Zealand-based social game SmallWorlds a $2.5m shot in the arm…
Launched in 2008 by entrepreneurs Mitch Olson and Darren Green, SmallWorlds is New Zealand’s largest social gaming company with 6.5 million registered players. Now with a $2.5 million investment from Morgan, the company is looking to expand into the billion-dollar social gaming sector, and the company is aiming to be a $100m export earner by 2013.
“Online businesses like [SmallWorlds] are hugely scalable and can grow incredibly quickly while maintaining high margins,” says Morgan. “SmallWorlds has already proven its audience appeal, technology and management capability.”
“Gaming is a huge export opportunity for New Zealand, occupying the sweetspot between technology and creativity. It’s easy to draw parallels with an internationally recognised company like Weta Digital, who also successfully combine these two elements.
“Our next wave of multi-million dollar exporters may well be trading virtual goods, which is a real and significant global market,” says Morgan.
This business model of selling ‘virtual goods’ for ‘micro-transactions’ to a large online audience is increasingly popular, and the practice has been adopted by companies such as Disney, Nickelodeon, Sony and Microsoft.
“One of the keys to our success has been the creation of an experience that is deeply engaging, and at the same time really accessible. Visually, we believe we have one of the most attractive and advanced social games available in a web browser,” says SmallWorlds Co-Founder Mitch Olson.
“The game is free to play but the scale we can achieve with social networking audiences means that only a small percentage of players need to purchase premium content and virtual goods in order to create significant revenues,” says Olson.
There is a booming market for games played via social networks, with gaming the fastest growing entertainment sector globally, having already overtaken both the music and film industry in revenues, and earning over US$1 billion last year, and predicted to be a US$5 billion industry by 2015.
