Things are more fun in neon blue

Hardware and Games

Ten years ago, the “virtual goods” model for games was described as the “Asian model”. Some noticed. In 2009, when I was running my Asia consultancy +8* I gave a talk on the topic at the Virtual Goods Summit (Asian virtual goods market is seven times bigger than U.S.).


  • Development time and cost is significant (unless you’re Flappy Bird or the hardware equivalent)
  • Distribution and advertising take 30~50% of revenue
  • You can’t “pivot” easily


  • Hardware monetization is upfront, and you can rarely try before you buy.
  • GaaS means you lose lots of visitors.
  • Additional sales for hardware hasn’t been done much for hardware except in the telecom field (where devices are subsidized and people pay for a service).
  • The old joke was “we lose money on each product… but we’ll make it up on volume”. Today it could be “… but we’ll make it up on data”. Only companies with lots of cash can afford that. Can startups really play that game?
  • Hardware has much less cultural barriers than software. In many cases it is supposed to be “self-explanatory” and “doing a job”.
  • Experienced teams (e.g. ex-SuperCell PMs)
  • Explosive growth
  • Experienced teams
  • New tech
  • Great demo
  • Good crowdfunding
  • Local adaptation of proven success (“Lockitron for Europe”)
  • Growth

Partner @ SOSV — $700m VC fund for Deep Tech (biology, robotics, etc.) | Digital Naturalist | Keynote Speaker | Angel Investor

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