Neon raises $14M to build direct-to-consumer stores for games
Summary
Its APIs let studios port their rich liveops features and segmentations to their webstore, giving players an experience thats personalized, immersive and consistent.And as a merchant of record, Neon handles all complexities associated with payments, tax, fraud, currency exchange, and support across 45 markets, so players can buy how they want, while studios focus on doing what they love: creating the best games for them, Faught said.Neon is putting the power back in the hands of developers and is fixing the gaming industrys broken monetization model, said Roseanne Wincek, managing director of Renegade Partners, in a statement. Were talking about consumers engaging directly with the Supercells of the world, or the Scopelys of the world, instead of just Apple, Google, Xbox, Steam, PlayStation, etc.Why Neon is hereApp Stores have been under constant regulatory scrutiny for the better part of the past decade for their restrictive, anticompetitive, and self-preferencing behaviors.In 2021, Apple reconfirmed its commitment to the developer community that anyone is allowed to have their own out-of-app monetization channel that isnt subject to their fees (this is what Neon has built), while the battles over opening up alternative in-app payment methods, along with giving developers the ability to link to their out-of-app monetization channels continue to rage on.In addition to the app store pressures, the gaming industry writ large continues to evolve toward a platform-agnostic world because advances in gaming tech like streaming and WebGL increasingly erode the advantages or necessity of having dedicated gaming hardware/consoles.On top of that, regulations surrounding industry consolidation (e.g., MSFT<>ATVI) is forcing the hardware platform owners/operators (Xbox, PlayStation, etc) to allow for cross-platform support for games. Faught believes all of these tailwinds point to a future where the gaming industry is far more developer and player-centric than hardware or platform-centric.Neons total purchase volume has grown 12 times every quarter for the past year, as its network of partners continue to drive anywhere from 10% to 35%+ of their total revenue through their Neon-powered direct-to-consumer channel.Neon currently partners with a variety of mobile and PC studios and publishers around the globe, including Metacore, Theorycraft, Space Ape Games, PerBlue Entertainment, and more.The D2C average order value is climbing. We solve it by taking what we think of as a modern approach to a merchant of record solution, where were the ones who handle sales tax, and we integrate all the local and global payment processors, he said. In that position, the game developer can make offers in a live service game to give players a better promotion or deal, Faught said.Its a pretty heavy investment were continuing to make into our APIs to make sure we can support all those offers and offer tooling and compliance and analytics infrastructure, Faught said.The company is helping developers understand where the players are coming from, their purchasing behavior on the web, and then build a profile of the player so developers can understand their gamers with solid analytics, he said.Its not clear how things will unfold like Microsofts plan to take its store and cloud gaming service on top of the Google Play store.