Invest in fun-gi: Fun games for growing brands

Having launched our apps on the opening day of the iTunes App Store, MobilityWare has garnered over 300 million installs. Much of my time is now spent acquiring companies - which means that I look at a lot of them. While I turn down most investment opportunities, I invested in fun-gi because I was impressed by how they created a novel game with branded content. Something other companies spend millions of dollars to accomplish, Alfred has done at high quality with a lean budget.

Dave Yonamine

Founder & Chairman of the Board at MobilityWare, fun-gi Advisor & Investor

Hey Alfred, long time no speak. I've been looking to do crowdfund investing (since I'm not accredited yet haha) and was pleasantly surprised to see your company listed. Let me know if I can be of help. -Gary

Gary Ma

Jimmy Xu

Product Manager

Product manager passionate about design, code, and business. Jimmy loves conceptualizing and delivering great products. After graduating from UCLA, he has been working in Los Angeles ever since.

Investor Q&A

Expand all

What does your company do?

We design and publish games that enable emerging brands to engage fans beyond traditional media. Our first partners are the stars of HGTV's most-watched show ever: Chip and Jo of 'Fixer Upper'. We will be launching our mobile game, House Flip, following the premiere of 'Fixer Upper' season 4 in mid December.

Where will your company be in 5 years?

Growing brands need a new way to capture the attention of fans—with a smartphone in the hands of 68% of Americans, mobile games are the answer. Already, some of TV's top brands like Pokemon and The Walking Dead have ventured into mobile games and apps. fun-gi will become the game development platform for brands who want to give fans a new, meaningful way to engage in brand-specific experiences. It starts with America's home-renovating sweethearts, Chip and Joanna Gaines.

What is fun-gi?

fun-gi designs and publishes games for growing brands. We start by creating innovative game designs with a focus on fun and marketability. We then publish our games by working with brands and different media outlets to maximize exposure from launch to live operations.

Can you tell us about the game you're working on now?

We are working on House Flip, a first-of-its-kind house flipping game on both mobile and VR platforms. In partnering with Chip & Joanna Gaines, the stars of HGTV's popular show, Fixer Upper, we’re able to leverage their audience which brought in 25 million viewers last season. Add to that: Chip & Joanna’s own social media footprint exceeds 12 million followers and continues to grow everyday. We created House Flip as a close collaboration with Chip & Joanna which has allowed us to imbue the game with their industry and design experience. With the successes of their show, their #1 best selling book, their magazine, and all of their home renovation ventures, we’ve created a new media channel in a game where players learn about flipping houses: the very thing that kickstarted Chip & Joanna’s first businesses. Authenticity to their identity is of utmost importance, and we’ve worked incredibly hard to become an extension of their brand. In Fixer Upper, Chip & Joanna turn dilapidated but potential-rich houses into showplaces. The game that we designed is similar in the sense that you buy a dilapidated house, you renovate it, and then you flip it at a margin. Everything is in 3D, so you can evaluate your renovations from every angle. As you renovate more houses in the game, you unlock new technologies, new colors, and new materials. In the process of learning about the world of renovation, our players also unlock new cities with bigger houses and unique architecture. Part of Chip & Joanna’s character is a sense of American culture that we wanted to capture in each city by including landmark partners including Baylor University in Waco, Texas, the Nelson-Atkins Museum in Kansas City, Missouri, and the USS Midway Museum in San Diego, California. Instilling Americana into our game was essential as it’s one of the things people love about Chip & Joanna.

What's the goal of the game? What will keep people playing?

The key is the sense of progression and accomplishment. It is doing more and more renovations to see the fruits of your labor; choosing which materials and colors with which to renovate allows players to exercise their own sense of design. In the process of exercising that aesthetic muscle, you unlock more and more choices. We make it very accessible because it is in the context of something that a lot of people are already familiar with: home renovation and decoration. On the business side, the element that drives progression is unlocking new cities and architecture, plus bigger and more unique homes. Not only are you unlocking new choices, but you're able to touch different types of architecture and see whether or not the technologies you have unlocked look good in those homes. Collaboration also adds to that progression where players can help their friends’ renovations by visiting their House Flips, and getting bonuses for being helpful. Whether you play the game alone or with your friends, there’s always more to discover in the ever-expansive world of renovation.

Can you describe some of the milestones you've reached?

We've been in production for about a year now. In March, we signed contracts with Chip & Joanna Gaines to build the game around their brand. Our relationship with them has been instrumental, not just from an audience perspective, but it has opened so many doors in terms of other brands that we're integrating into their game, like Kilz Paint and York Wallcoverings. Chip and Joanna had such a great experience working with us that they became investors in our seed round. We're also in talks with Habitat for Humanity as our impact partner; a portion of our profits will go towards building houses, not just in America, but in developing countries as well. Another big milestone for us is our great relationship with the application platforms, Apple and Google. They've seen our game and they're both really excited, not just because of the brand, but because this is a first-of-its-kind game. We are defining a new genre of game that’s not only beautiful, but fun to play as well. The most recent development has been creating a media relationship with Scripps Networks, which owns Fixer Upper and the HGTV network. They also own The Food Network, DIY, and Travel Channel. They have also seen the game, and have been highly supportive. We'd love to promote the game on television, so even though we're a fledgling publisher, we'll be doing things that only some of the biggest game developers are able to do.

How much runway do you have?

As of November 2016, the company had cash in bank of approximately $76K. It is operating with an approximate burn rate of $68K per month. The company has financing in place to fund expenses if needed.

Why will fun-gi win?

When you think about where the games industry is right now, it continues to see massive amounts of growth, and we're still in the elbow of its growth curve especially in mobile applications. In terms of branded content, innovation has always been late as common practice has been to skin a brand on an old game for re-release, essentially replicating the same tired game. We’ll win because our focus is on innovative designs that are highly engaging. We’ve created a game which will define and own its genre where you not only exercise the business skill of flipping houses, but you also exercise the design skill of home renovation. We’ll also win because we’re doing something no one else has done: packaging a game in a beautiful casual wrapper while introducing, what the industry calls, ‘mid-core game mechanics’ to an audience that is usually accustomed to playing games like Candy Crush or Words With Friends. Delivering a mid-core game experience to a casual audience in House Flip creates a fun and highly-engaging experience. Perhaps most importantly, fun-gi also wins because our focus on audience alignment allows us ways to scale our games like few other game developers can. Chip & Joanna’s show, Fixer Upper, is the #1 program on TV for upscale women, ages 25 to 54. Our game, from the ground up, was built for that very same audience. While alignment is key, we’re also able to leverage their massive audience which we anticipate will result in millions of downloads.

Why is fun-gi unique?

We want to continue making innovative content. And, we want to create games that allow brands to thrive and continue to grow. The EA’s and the Kabam’s of the world do it with some of the biggest IP from Star Wars to Marvel. Likewise, we’re creating games as a platform for growing brands to be able to engage with a player base. The key word here is “growing” since our games are intended to grow the originating brand, and by aligning the game with their audience while basking in that halo effect we end up bringing in other brands, further growing the audiences of everyone participating. Ultimately it is that merging of the game world with the brand world and helping them grow through really fun and innovative game content is what set us apart.

Have you launched? What are your measures for success?

Right now we are in private beta, that means that we have a build that we are continuously updating for internal testers. We're right around the corner for soft launch, so we're on track to submit our build to a couple of small countries in December. During that time we'll basically be looking at 3 key metrics: retention, engagement, and monetization (how often players come back, how long players play, and if players open their wallets to pay, respectively). Those are the really key pieces. When it comes to retention, downloads are always a big sign. We'll be looking at our daily active users. We'll be looking at how often they come back. What's our day 1, day 3, day 7, day 30 retention rate? How did they compare up against other games in the casual to mid-core space? We'll have a good sense by then of how well players are monetizing, and we will be able to determine if we are hitting the metrics that we forecasted. We forecasted a conservative figure to achieve 6 million downloads in the first 6 months. That would be in most of the major countries that Fixer Upper has a presence in. What that translates into daily active users, in our estimates based on a compounded retention curve pans out to about 400,000 daily active users. We took a look at what the industry standard is on average revenue per daily active user. For a lot of casual titles, they're under $0.10 cents. Then you have the games that are doing really well, like the Pokemons or the Clash Royales, Clash of the Clans, the Candy Crushes of the world. They're all over $0.20-$0.25 cents average revenue per daily active user (ARPDAU). What we forecast is just a $0.07 cent ARPDAU. Carrying conservative forecasts skews us more towards the casual space, but it also ensures we hit our revenue targets.

Tell us about your strategies for growth.

It is a combination of things. We have the ability to leverage Chip & Joanna Gaines' social media footprint, over 12 million followers. Chip and Joanna are also followed by some incredible people. But getting exposure to Chip & Joanna doesn’t stop at owned or earned influencer marketing. Publishing House Flip will carry a truly integrated marketing approach where paid social, search, and video advertising will amplify any influencer campaign. Our relationship with Scripps Networks will also allow us to advertise at scale on HGTV, effectively capturing the attention of the very audience we’ve built our game for.

How do you make money?

We make money in three ways: in-app purchases, in-game sponsorships, and in-game video advertising. Our strategy for these three channels is intentional since we know we will attract a variety of different players. Folks who wish to be more productive or accelerate their renovations will be more inclined to make an in-app purchase, whereas folks who wish to grind and play for free will consume more in-game video advertising. Our focus on a great branded experience also gives players the chance to interact with some of the home renovation industry’s biggest brands such as Kilz Paint or York Wallpaper. With House Flip being free to download, we wanted to make sure that there was a lot of value to play for free while at the same time creating worthwhile moments for our players to make purchases in a game they’ve come to love.

Is the first of many games to come? Why are you raising now?

House Flip is just our first title. We will use the same discipline of creating a truly innovative and marketable game to approach and win other brands. Though we have already designed two other games, we’ll go through the same rigor we did with Chip & Joanna in our discovery process to ensure we identify and can help grow a growing brand. The momentum of getting Chip & Joanna on board really dictated our focus on leading with our house flipping game as our sole project. The nature of the game being in 3D and highly asset-intensive has also turned the game into a high budget title. That said, the capital we’re raising right now is intended to go entirely towards the production and marketing of House Flip. Even more than just raising money, we’re excited to bring on fans of games, real estate, and Chip & Joanna as champions for our company and our games.

What keeps you up at night about the business?

Building the right team, having the capital so that we can hire outstanding talent, and to continue to make great content so that the copycats can't get at us.

Why are you the ones to make this happen?

I have been in games since 2010 when I oversaw monetization and user acquisition at a casual game company called Mobile Deluxe. We made Solitaire Deluxe as well as some of the highest rated slots and hidden object games. I then joined M&C Saatchi where I worked with some of the biggest apps as part of our client base, including Amazon where I marketed the Kindle app and the Amazon shopping app. I also launched the Zumba Dance Game, a Phineas and Ferb infinite-runner game as well as Sports Jeopardy and Wheel of Fortune for Sony. Merging the worlds of game monetization and big brands, I started fun-gi to capture an opportunity where brands can treat games as a legitimate media channel to grow their audience and make some money at the same time. Bringing my discipline in team growth, we will continue to hire world class talent who are super motivated to create novel content in the game space. Our first hire is Jimmy Xu who is an expert in user experience design, and has taken on a monetization and production role as our Product Manager. Our development partner, the BAFTA award-winning team in Section Studios has done work for Riot Games, EA, Dreamworks, Infinity Ward, just to name a few. As an equity partner in our game, Section Studios allows us to scale our team where it’s needed with minimal transition costs. If we need artists or extra producers, we don't need to go through the time-intensive process of identifying AAA-capable talent. In partnering with Section Studios, we’re able to turn on and turn off resources as we've needed. With this core team, we continue to attract strong talent who are motivated to create amazing games.

Financials

Our cash in hand is $118,256.56, as of April 2018. Over the three months prior, revenues averaged $286,923/month, cost of goods sold has averaged $115,000/month, and operational expenses have averaged $110,000/month.

At a Glance

January 1 to December 31

$0 [100%]

Revenue

-$73,274

Net Loss

$33,784 [2%]

Short Term Debt

$200,000

Raised in 2016

$118,257

Cash on Hand
As of 04/20/18

Income

Balance

Narrative

Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We design and publish games that enable emerging brands to engage fans beyond traditional media. Our first partners are the stars of HGTV's most-watched show ever: Chip and Jo of 'Fixer Upper'. We will be launching our mobile game, House Flip, following the premiere of 'Fixer Upper' season 4 in mid December.
Growing brands need a new way to capture the attention of fans—with a smartphone in the hands of 68% of Americans, mobile games are the answer. Already, some of TV's top brands like Pokemon and The Walking Dead have ventured into mobile games and apps. fun-gi will become the game development platform for brands who want to give fans a new, meaningful way to engage in brand-specific experiences. It starts with America's home-renovating sweethearts, Chip and Joanna Gaines.

Milestones

FUN-GI GAMES LLC was incorporated in the State of California in May 2015.

Since then, we have:

Exclusive partnership with Chip & Joanna Gaines, stars of HGTV's #1 show Fixer Upper, which brought in 100M viewers in 2017
#1 Adventure Game in Australia and New Zealand after soft launch
Global launch in December 2017
Product placement brands include Magnolia Market as well as new partners soon to be shared
Landmark partners include Baylor University, USS Midway Museum, Arizona State University and more
Scripps Networks (which owns HGTV and the Fixer Upper show), is a media partner

Historical Results of Operations

Our company was organized in May 2015 and has limited operations upon which prospective investors may base an evaluation of its performance.

Revenues & Gross Margin. For the period ended December 31, 2016, the Company had revenues of $0 compared to the year ended December 31, 2017, when the Company had revenues of $310,314.74. Our gross margin was 0% in fiscal year 2016, compared to 76.72% in 2017.
Assets. As of December 31, 2016, the Company had total assets of $84,560, including $82,894 in cash. As of December 31, 2017, the Company had $1,738,912.14 in total assets, including $131,324.27 in cash.
Net Loss. The Company has had net losses of $73,274 and net losses of $146,634.60 for the fiscal years ended December 31, 2016 and December 31, 2017, respectively.
Liabilities. The Company's liabilities totaled $33,784 for the fiscal year ended December 31, 2016 and $844,729.82 for the fiscal year ended December 31, 2017.

Liquidity & Capital Resources

To-date, the company has been financed with $625,000 in equity and $245,000 in SAFEs.

We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.

We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.

Runway & Short/Mid Term Expenses

FUN-GI GAMES LLC cash in hand is $118,256.56, as of April 2018. Over the last three months, revenues have averaged $286,923/month, cost of goods sold has averaged $115,000/month, and operational expenses have averaged $110,000/month, for an average net margin of $61,923 per month. We are already cash flow positive after 4 months of global launch on a single platform.

Product globally launched in December of 2017 where initial revenues are beginning to ramp up.

With the additional launch of Android, we anticipate both revenues and expenses to increase over the next 3-6 months.

A note from Wefunder. Unlike companies on the NASDAQ, early-stage startups have little operating history. Financial analysis is not as useful when there is limited data. It's more important to predict the size of the future market. If the founder achieves their vision, will enough customers pay the company enough money?

It's also common for fast-growing startups to lose money even faster: they are investing in future growth. In these cases, it's often better to check if the Cost of User Acquisition (CAC) is lower than the Lifetime Value (LTV) of that customer. If one spends $1000 today to make $10,000 over the next five years, that may be a smart bet. Amazon is a famous example of re-investing potential profits to maximize growth over 20 years.

Net Margin:
N/A

Gross Margin:
N/A

Return on Assets:
-87%

Earnings per Share:
-$177.85

Revenue per Employee:
$0

Cash to Assets:
98%

Revenue to Receivables:
~

Debt Ratio:
40%

Fun-Gi Financial Statements- Reviewed 1 .pdf

fun-gi games LLC - Profit and Loss Statement 2017.pdf

fun-gi games LLC - Cash Flow Statement 2017.pdf

fun-gi games LLC - Balance Sheet 2017.pdf

Risks

Our company, fun-gi, is pre-revenue, and is raising capital to build and market a product we hope will define a new genre of game with the reknown of Chip & Joanna Gaines from HGTV's hit show, Fixer Upper.

Investors won't see a return until the company is acquired or IPO's.

Even with the partnerships and media support of Chip & Joanna Gaines and Scripps/HGTV, the game might not grow with enough players to generate revenue at the scale needed to support revenue, and thus marketing growth.

Mobile and VR games as an industry is still growing at a rapid pace, but consumption of media can be fickle where users may not be interested in this new type of game.

The consumption of any type of game content competes with the consumption of other types of media including television, movies, social, books, and other games.

The games industry is highly competitive with studios and publishers who possess greater financial, developmental, and marketing resources than fun-gi; even though these competitors would be limited with speed to market (given the intensity of engineering and art needed to compete) and the lack of carrying the brand power of Chip & Joanna Gaines.

The organic distribution and presence of our House Flip game is dependent upon the brand power of Chip & Joanna Gaines which carries the risks of many well-known and popular figures such as intense public scrutiny from the media.

The development of a first-of-its-kind game requires heavy commitments on engineering, design, and art; thus making it a lengthy process and may not be fully completed within anticipated timeframes.

Game development in general is an iterative process that requires persistent feature and content delivery which exposes its users to both positive and negative experiences until it is refined.

The social and networked nature of the House Flip game requires an Internet connection to 3rd party platforms and servers which can be susceptible to outages despite standard industry service level agreements.

While fun-gi and their development partner, Section Studios, are both committed to bringing on employees who are enabled to execute at the highest levels, the combination of talent, discipline, and dedication are difficult characteristics to find and retain in a team that can build a product with AAA quality.

The freemium business model does rely on economies of scale with a large user base, but every game monetizes at different levels which requires constant improvements. Even beyond insufficient users, convincing players to open their wallets to spend money on a game (even one they love) is not an easy task.

The future games fun-gi will develop beyond House Flip depend on timing and relevance of growing brands which can be uncertain.

The history of fun-gi allowed the development of its product with capital from past investors. The future operations depends on fun-gi's ability to create revenue. While fun-gi may consider additional funding in the future through debt and/or equity financing, there is no assurance that additional financing will be made.

Officer	Title	Joined
Alfred Fung	CEO	2014

Officer

Title

Joined

Alfred Fung

CEO

2014

Holder	Securities Held	Voting Power
Alfred Fung	Common	83.0%

Holder

Securities Held

Voting Power

Alfred Fung

Common

83.0%

Date	Amount	Security
05/2017	$245,000	SAFE
11/2017	$300,000	Priced Round
02/2017	$238,222	SAFE
10/2016	$200,000	Priced Round
12/2015	$125,000	Priced Round

Date

Amount

Security

05/2017

$245,000

SAFE

11/2017

$300,000

Priced Round

02/2017

$238,222

SAFE

10/2016

$200,000

Priced Round

12/2015

$125,000

Priced Round

Class of Security	Securities (or Amount) Authorized	Securities (or Amount) Outstanding	Voting Rights
Class E Units	22	22	Yes
Common Units	354	354	Yes
Class B Units	16	16	Yes
Class A Units	20	20	Yes

Class of Security

Securities
(or Amount)
Authorized

Securities
(or Amount)
Outstanding

Voting
Rights

Class E Units

Yes

Common Units

354

Yes

Class B Units

Yes

Class A Units

Yes

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1	Exclusive partnership with Chip & Joanna Gaines, stars of HGTV's #1 show Fixer Upper, which brought in 25M viewers last season
2	#1 Adventure Game in Australia and New Zealand after soft launch
3	Global launch scheduled for March 2017
4	Product placement brands include Magnolia Market and York Wall Coverings
5	Section Studios is our development and equity partner in the game, which is led by a BAFTA award-winning art team
6	Landmark partners include Baylor University, USS Midway Museum, Arizona State University and more
7	Scripps Networks (which owns HGTV and the Fixer Upper show), is a media partner
8	Two additional game designs are in pre-production also for growing brands

$100,000	Pay production (engineers, artists, and game designers) to bring game to global launch.
$250,000	Boost global launch with marketing on social, search, and influencer channels.
$500,000	In addition to production costs, hire another senior engineer to add new features to the game.
$750,000	Hire additional game designer/technical producer, and accelerate game feature and asset production with more artists.
$1,000,000	Ramp up marketing spend to maximize user acquisition, plus hire a marketing specialist to bolster promotional efforts.

Why you may want to support us...

Why investors us

we've raised $1,108,222 since our founding

Our team

In the news

Downloads

BRANDS NEED A NEW WAY TO ENGAGE FANS: GAMES

Mobile games are a $36.9B market and TV's biggest brands are already adopting them.

Games Dominate App Downloads on Mobile

OUR FIRST PARTNERS ARE CHIP AND JOANNA FROM HGTV's #1 SHOW

"Fixer Upper" is HGTV's most watched show ever. We're helping them get even bigger.

FANS CAN NOW RENOVATE LIKE CHIP AND JOANNA

We've collaborated with Chip and Jo to create an authentic 'house flipping' adventure.

Renovate Your Dream Fixer Upper

Design in 3D

The Art of House Flipping

MEET OUR PARTNERS

'HOUSE FLIP' WILL SOFT-LAUNCH IN DECEMBER

We plan to launch the game alongside 'Fixer Upper' season 4 and develop two new games next year.

HOUSE FLIP IS NOW THE #1 ADVENTURE GAME IN AUSTRALIA

Just a month into our soft launch, House Flip has proven it delivers.

HELP US CREATE THE GAMES YOU WANT TO PLAY

We're a tight-knit team, and we want you to be a part of it.

Investor Q&A

Financials

At a Glance

Risks

Details

The Board of Directors

Officers

Voting Power

Past Equity Fundraises

Outstanding Debts

Related Party Transactions

Use of Funds

Capital Structure

Form C Filing on EDGAR

2020 - Happy New Year!

Part 2: Soft launch in Australia and New Zealand and what's new since campaign

Part 1: Play with fun-gi's House Flip with Chip and Jo

TestFlight on iPhones & iPads

Welcome!

Ad Revenue Advance of $100,000

#1 Adventure Game in the Apple App Store

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