With the popularity of the iPhone and other high-end smartphones, first-person shooters, and graphics-driven games are stealing the spotlight, but New York City-based Snackable Media quietly has created a million-dollar gaming business in 2009 using the most low-tech of technology—text messaging.
Snackable’s CEO Eyeal Yechezkell gave TechCrunch the complete rundown on the business: In 2009, it sold $170 million worth of text-based games, which has jumped from $90 million in 2008 and $30 million in 2007. Snackable dolls out half of the revenues to the carriers, but still has managed to build a profitable company without ever raising any venture capital. Snackable has 100 in New York and Florida.
The games are fairly simple. The most popular, called Predicto, sends players multiple-choice questions, like “Will gas prices rise above $3 this summer?” or Who will win American Idol this season?” Players respond by text for a chance to win $50,000 in prizes. It has more than a million monthly active users, who all pay $9.95 a month. It also has a game based on “Deal Or No Deal,” and “Celebrity Square.”
Some of the 10-year-old company’s success is based on its roots as ad network when it was called Next Web Media. From its beginnings, Snackable knows how to advertise online, and therefore uses the internet to get people to sign up for subscriptions via text message. The approach is much like early ringtone clubs, which got in trouble because consumers did not know they were signing up for subscriptions. At least Snackable requires a double-confirmation to start the subscription.
Will Snackable move into apps, like the millions of other companies? It’s unlikely. “Right now, these applications are just sitting in the App Store and not really advertised. When you start advertising applications, 99 cents might not be a profitable model.”