Film financier extends strategy to mobile games investment that digs up real gold bars

GAMES/FILM: Gary Collins believes in reducing the risk element when investing in edgy and independent creative intellectual property (IP), a philosophy that has stood him in good stead as CEO of UK film finance firm Red Rock Entertainment.

The company is extending the same approach to the rapidly growing digital games domain with a pioneering mobile game franchise called Dig That Gold (pictured below).

Created by British games developer Project M, Dig That Gold is the first of its kind because players are given the opportunity to win real gold bars as prizes.

Moreover, investors are being asked to come on board not while the game is still a clever concept in someone’s head, but after it is completed and ready to download via Apple’s iTunes Store.

“When we invite investors to inject money into our movies, we eliminate as much risk as possible by coming in at the end of the production,” explains Collins (pictured below).

“We do this because we’re bearing in mind that the film might not get made. And even if it does, you’re asking investors to wait for up to two years before they see anything.”

Collins, whose company happens to be located at Elstree Studios (the iconic filmmaking hub where box office hits like Oscar-winning The Danish Girl and The King’s Speech were made), plans to apply that film-funding strategy to Dig That Gold and other digital games that look like a good bet.

“Rather than invest at the beginning of the game’s development, we waited until it was on iTunes. So we’re not asking anyone to invest their money in a game that might not go to market.”

For investors that might be interested in entering the rapidly growing games sector for the first time, here is how Dig That Gold works and how to become a part of it.

Set in the 1849 Gold Rush, all players need to do is download the free already trademarked Dig That Gold app to start. Each player assumes a mining character who digs and pans for virtual gold nuggets on a series of islands, each of which has 10 gold mines. Should the players achieve certain milestones, they receive a real 24-carat gold bar as top prize.

Each investor is effectively a franchisee. He or she can select one of the mines, which will be customised into his or her own game with personalised branding. There are four franchise mine levels to choose from: standard, grand, super and mega.

The investment required ranges from £25,000 (US$35,508) for a standard mine at 6,250 sq ft in size to £160,000 (US$227,250) for a mega mine at 50,000 sq ft.

The bigger the mine, the more opportunities a player has of winning a gold bar prize, which should appeal to real gamers who will then spend more time and be prepared to pay money to meet the set goals to win.

The number of mines available will be capped to ensure investors have a comprehensive chance to extract as much value from them as possible for revenue.

Project M, the original game’s developer, will handle all the technology required to make the bespoke version for the investor, who will then be provided with automated tools and a dashboard that informs them on how many gamers are visiting the mine and how much they are spending.

The investors, now game owners in their own right, will be encouraged to market their game (using social media, for example) to drive more traffic of players to their mine.

According to the Dig That Gold investment prospectus, the game’s franchise owners will receive a share of the revenue generated via their respective mines, “minus the costs for the App store platforms, gold allocation and our (Project M) management service fee which is used for the continual development, maintenance, security and marketing for the overall game”.

Red Rock, which has funded 11 film and TV projects in the past year, will be inviting investors to participate in Dig That Gold, the same way it has attracted them to back movies involving A-List British actors such as Timothy Spall, Steven Berkoff and John Hurt.

One of its latest projects stars Hurt in That Good Night (pictured below), which recently completed principal photography and is scheduled for release next year.

Collins sees Dig That Gold as the opportunity for investors who’ve never had the chance to enter the fast-growing games business.

“It is ideal for people who want to invest in the creative businesses but don’t want to invest in films. The franchise format means there is something of an ownership element and they can become more involved in it,” he says. “They could even market their own businesses and brands in the game if they want.”

So why was he, a movie industry financier, drawn to the digital games sector? According to the company’s press release, “the mobile gaming industry has now outgrown both the music and music markets combined to become the biggest entertainment medium in the world”.

That might be hyperbole as globally speaking, filmed entertainment generated a record US$38bn from box office tickets alone during 2015 worldwide, according to research firm Rentrak.

And that excludes ancillary revenues from TV, video-on-demand platforms and the declining but still alive DVDs.

Trade organisation IFPI recently reported that the global recorded music industry earned US$15bn last year, and that excludes income from live concerts.

According to Newzoo, mobile games brought in more than US$30bn last year. But when you compare it to 2014 revenues of US$24.5bn, it is certainly growing faster than the movie and music businesses combined. It is the total gaming sector, including mobile, console and PC games, that is doing wonders with a predicted US$107bn in revenues next year.

As the number of smartphones users is forecast to reach more than 6 billion worldwide by 2020 (Ericsson’s Mobile Report), mobile games as a business are open to numerous money-making channels.

“Just look at the number of people playing games on their tablets and smartphones, hundreds and hundreds of them are addicted. It is something that everyone understands,” adds Collins, explaining why this latest investment project will work.