Mobile game developer Mig33 is announcing $8.9 million in fresh funding this morning, taken in to accelerate its growth in the developing world and transition to a platform model with other companies making most of its games.
There aren’t many businesses quite like Mig33, which may be one reason that it doesn’t get talked about as much as companies in more crowded spaces. Since launching in 2005, Mig33 has secluded itself in markets that, according to the conventional wisdom, aren’t worth much, like Indonesia, Pakistan and Saudi Arabia.
One problem with those markets is a lack of high-powered devices like the iPhone. But the bigger barrier is monetization. Not only are individual users typically much poorer than those in the developed world; they also lack payment infrastructure like credit cards or bank accounts.
Mig33 has developed a startling workaround to these problems, according to CEO Steven Goh. In countries without convenient payment systems, individual users will begin acting as distribution nodes for virtual currency, learning the steps to buy credits in large amounts — sometimes in the thousands of dollars — and then selling smaller units on to other people in their locality or second-degree distributors somewhere else.
In Indonesia, five percent of users are paying over $2 a month, according to Goh, mostly through virtual gifts and goods. The company is just starting to add games with social features, so revenue could rise when there are more.
For partners, Mig33 could offer a good alternative to crowded channels like Facebook or the iPhone. And there’s more possibility for development than a year or two ago; even though smartphones aren’t yet widespread in developing markets, ordinary phones have improved significantly, and the company’s app can run games in Flash Lite. It’s also busy adding support for more types of handsets across its markets.
Although Mig33 doesn’t release many more numbers than those given above publicly, the company does have 40 million registered users and 1.1 million daily uniques, giving an idea of how much it could be making. The $8.9 million round was led by an Indonesian telecom entrepreneur, Pak Sugiono Wiyono, and Gree, a Japanese social network. Mig33 has raised over $34 million to date.