Meet the new moguls of gaming

As with so many glass-walled boardrooms in West Hollywood, a media mogul sits at the head of the table to do some big-money business. Pencil in hand, Kim Kardashian flicks through a binder of emoji ideas, finally ticking off a red bandanna, tanning oil and a swimsuit.

“I should take a photo of myself in the Pablo one-piece, and you can use that,” the reality television star says, referring, in the true vertically integrated nature of modern celebrity, to her husband Kanye West’s merchandise line. Later she will Instagram a selfie in the swimsuit that her app developer, Whalerock Industries, will turn into an emoji and include in an app that her fans can download for $1.99.

It’s easy to scoff at this and pretty much everything else Kim Kardashian does. The embodiment of the selfie era, she has stoked the notoriety she gained from a sex tape a decade ago by sharing almost every detail of her life, begetting, like some nightmare mash-up of Andy Warhol and Groundhog Day, perpetually more fame.

But in obsessing over the details of an avatar, Kardashian has stumbled into an entirely new way to monetise fame, and she’s been shrewd enough to capitalise on a massive scale. Kardashian stars in a mobile game, Kim Kardashian: Hollywood, in which players create their own celebrity, befriend Kim and work their way onto the A-list.

Vapid, yes, but the numbers look very smart. Since its June 2014 launch, Kim Kardashian: Hollywood has been downloaded 45 million times and generated $160 million in revenue. Forbes estimates that Kardashian has pocketed $45 million from it over that period. This year she earned $51 million to land at No 42 on Forbes’s Celebrity 100 list; 40 percent of her yearly paycheque came from the game.

She’s not alone. As gaming has moved from consoles to desktops to smartphone apps, the ability to create a marketable game has spread from pro athletes to pretty much anyone with a following. Some are obvious: Action hero Jason Statham in a shoot ’em up game. Football announcer Tony Gonzalez, a former all-pro, coaches personal training sessions. But many are ploughing niches at the end of the long tail: Tom Hanks, an avid typewriter collector, built an app that simulates writing on a typewriter, while William Shatner’s Shatoetry composes poetry for purchasers. From pretty much nowhere at the beginning of the decade, celebrity-driven mobile games have become a $200-million-a-year business, Forbes estimates, with at least 30 celebrities—including 12 of the Celebrity 100—either boasting their own mobile game or ready to release one.

“I became really intrigued with the tech world. I started spending a lot of time in San Francisco,” says Kardashian, without a hint of irony. “I realised this is really going to be the next cycle of my career and this is what I want to focus on.”

Spending time in San Francisco, either literally or figuratively, means adapting to Silicon Valley’s payment model. Rather than take a flat licensing fee, the vast majority of celebrities make money from apps the way you might if you managed to get something into the App Store: The more it sells, the more you make. At times, they’ll negotiate a minimum guarantee.

As with most things celebrity, it’s a hits business. Kardashian’s game is a groundbreaker. Comedian Ellen DeGeneres isn’t far behind: She leveraged her smart and goofy persona with Heads Up!, a trivia game that’s been downloaded 25.5 million times and clocked an estimated $25.9 million in sales since its 2013 launch. YouTube videogame commentator PewDiePie—whose game, Legend of the Brofist, allows you to pretend you’re him and fight with cartoon barrels—has a run rate of almost $1 million a month, according to data provider ThinkGaming.

But since the core component of entrepreneurship is risk, the games that fail wind up yielding very little to the celebrity and put pressure on the game producers. In Hollywood, where celebrity socialism still rules, the free market now exists on everyone’s phones.

While the genesis ultimately goes back to pinball and slot machines, the father of modern celebrity gaming was, unsurprisingly, Michael Jackson, with his 1990 Sega game, Michael Jackson’s Moonwalker, which console players could dance through. Still, it was mostly a boys’ thing; the percentage of adults who owned and regularly used consoles was small, and videogame players skewed heavily male, cutting off at least half the potential market.

Now, however, pretty much all of us have a game platform in our pocket and purse at all times. The smartphone has opened the industry up to a far wider audience—55 percent of mobile gamers are women, according to research firm EEDAR—and helped the celebrities shilling for it make millions more from back-end profits over upfront endorsement deals.

“I love my big computer, but I can’t even tell you the last time I sat in front of it,” says Kardashian, 35, gesturing to her iPhone 6 Plus with her white-painted nails. “I’m always on my phone.”

Leading the charge in celebrity-driven mobile games is Glu Mobile, the San Francisco-based developer behind Kardashian’s and Katy Perry’s games. Owned in part by Chinese tech giant Tencent, Glu has bet big on star subjects: 30 percent of its $249.9 million in 2015 revenue came from games with celebrity names in the title, including $71.8 million generated by Kim Kardashian: Hollywood.

Glu’s secret sauce: “Take a game engine that we already know has a high lifetime value and monetises well and figure out how to turbocharge it,” says CEO Niccolo de Masi. Turbocharging means overlaying a celebrity with a huge social following on top of tested games that have already succeeded on their own merits.

Kim Kardashian: Hollywood was patient zero. It started life as Stardom: The A List (2011) and Stardom: Hollywood (2013), in which players earn points to work their way to fame. At its peak, in 2013, Stardom: Hollywood had just 250,000 active daily users, but developers knew a good chunk of them were spending money—its 500,000-odd downloads generated an estimated $2.5 million, or $5 apiece.

“We rapidly worked out that the core fantasy for a Kim follower is exactly what the Stardom game was about, which was becoming famous,” says de Masi. In the summer of 2013 de Masi called Kardashian’s agent, who brought the game to her.

“I loved videogames, growing up,” Kardashian says. “I remember I asked Kanye, ‘Should I do this?’ He was like, ‘Yes!’ That’s how he got into music, because he wanted to do music for videogames and wanted to create videogames.” But Kardashian was still cautious: “I was like, ‘I wonder if people are really going to… mimic my life’.”

For the ever image-conscious Kardashian, the chance for control over her own virtual character was too good to turn down. By the end of fall, she and de Masi had nailed down a contract brokered by her mother/manager, Kris Jenner, that provided Kardashian with a small six-figure-minimum guarantee against, sources say, a whopping 40 percent cut of revenues, after platform fees. (Glu denies this figure.) Kardashian also had overall editorial approval, spending a year finalising clothing ideas and okaying each storyline in the game. She signed off on “every single outfit, to the eyeliner, to the hairstyles, to the colour tones,” she says, and still does. (“She responds to my texts faster than my own employees,” says de Masi.)

When the game launched, Kardashian says, she was overwhelmed by the positive comments. Then it tallied $74.3 million in its first six months. “When I found out what my percentage was, I was, like, ‘Oh, my gosh’,” she says. “Then I was like, ‘Okay, whatever we’ve got to do to keep this going’.”

As with almost all of these games, the model is giving the game away for free and then monetising the most devoted players through in-app purchases—little extras that add elements and keep the game fresh. With that in mind, Kardashian started synching real-life events with virtual ones, taking the game characters to Punta Mita, Mexico, the same day Kardashian arrived. “The whole idea was to make it feel as live-time as possible,” she explains. “I would give [Glu] bikinis and be like, ‘Hurry up and mock up this bikini, because I’m going to wear it, and then you can have it live in the game!’” They began matching vacations and work trips to in-app activity—and fans ate it up.

Free games tend to have a lifecycle of less than 18 months—not long for an endeavour that may require a team of two dozen expensive developers. But the back-end incentive drives celebrities to promote games for far longer than they would a regular endorsement. Rather than just getting a lump sum upfront, celebrities sign a multiyear contract that usually includes a non-compete clause preventing them from building games with other developers. In addition to a guarantee, most developers pay a cut of revenue that escalates depending on how well the game performs; Glu’s typical royalty rate is close to 22 percent.

In turn, the celebrity promotes the game on social media and TV. DeGeneres showed the potential power of such advertising: She regularly played the 99-cent Heads Up! on her show, viewed by 3.6 million people a day, according to Nielsen. That has helped keep the game a mainstay on the top-paid app charts—and allowed DeGeneres to pocket an estimated $9 million from the app since.

Other companies have pushed the framework. Launched in 2013, Covet Fashion generates some $44 million in annual revenue, lengthening the shelf life of its app by signing up stars to briefly “host” a game for a month at a time. Its 97 percent-female game players style outfits for a rotating cast of former Disney and Nickelodeon stars: Emma Roberts, Gabrielle Union, Nina Dobrev and Vanessa Hudgens have all taken turns as the celebrity face of the app. For brief takeovers, talent is either paid based on the number of new users he or she signs up—around 2 cents per new download—or receives a minimum guarantee and a cut of the extra revenue brought to the game, as with Covet Fashion.

Roberts, the first-ever host, helped boost December 2015 revenues by $26,000, to an estimated $3.5 million. In January, Union nudged sales to $3.7 million; the next host, Dubrov, juiced revenues up to $4.3 million. The most recent, Hudgens, saw estimated monthly revenues of $3.9 million, but she snagged approximately 2 million new users for the game. That likely earned Hudgens some $50,000—pocket change, but not bad for lending her likeness and coming up with ten style challenges for fashion fanatics.

On a May evening at Manhattan’s dimly lit Slate nightclub, well-heeled guests are swiping at iPads on cocktail tables. They are at the launch party for Fetty Wap’s new street-racing game—an endeavour published despite the rising rapper’s serious motorcycle accident eight months prior.

Fittingly, Fetty Wap: Nitro Nation Stories, released by Creative Mobile, crashed. It never appeared on the App Store’s top free-app list. As one of an estimated 40,000 racing games in the App Store, it failed to stand out.

Fetty is far from alone. Game developer Pocket Gems, which took in an estimated $34 million in 2015 from Episode, a choose-your-own-adventure game targeted at teenage girls, released a chapter of the game with singer Demi Lovato dubbed Demi Lovato: Path to Fame. The Glu model—a pre-existing game plus a celebrity with lots of social followers—failed to replicate the Kardashian magic. Lovato’s standalone app drew an estimated 2 million installs but likely generated revenues of less than $1 million.

Another huge pop star, Shakira, similarly failed last year with Love Rocks Shakira, a 2015 puzzle game by Angry Birds developers Rovio. Players have to match up links of gems—a proven game formula but one completely unrelated to the Colombian superstar’s talents. Despite the fact that the game uses her image for advertising, her name in the title and her music in the background, that disconnect translated into mere seven-figure download totals and a measly six-figure revenue.

Even the world’s glitziest athlete doesn’t succeed if the context is wrong. Soccer star Cristiano Ronaldo (No 4 on the Celebrity 100) released Cristiano Ronaldo: Superstar Skater in 2015. Rather than feature him on a pitch, Ronaldo skateboards through the streets of Las Vegas eluding paparazzi. The bizarre partnership landed just 1.3 million downloads, per estimates, not even 1 percent of his 219 million social followers. A just-released soccer-themed game, Kick’n’Run, is performing better.

Poorly matched celebrity takeovers don’t juice user numbers, either. Comedian Gabriel Iglesias joined tower defence game Timenauts for 11 days in March. The game, which focuses on battling enemies, has little to do with being funny. Estimates suggest he scored under 100,000 new downloads for the game.

But perhaps the biggest lesson comes from one of the biggest stars in the world, Katy Perry. Though she has some 210 million followers on social media, Forbes estimates that Katy Perry Pop was downloaded just over 1.3 million times, likely generating only six figures in revenue. A disaster for Glu, given that it likely cost several millions to make, even before counting the upfront minimum guarantee paid to Perry and the estimated six figures spent in initial marketing costs.

The problem: Katy Perry Pop was little more than a music-driven version of the Kardashian game. It was a me-too product—as was another mediocre performer, Britney Spears: American Dream—right down to the foundations. Seemingly skinned from the same original Glu game, Stardom: Hollywood, players create their own musician, befriend Perry or Spears and sing their way to the top. Customers clearly saw through it.

Since mobile games follow the hits model, they face the same pressures. Kardashian’s younger Jenner half-sisters released a game, Kendall & Kylie, in February, which is the Glu version of a spinoff. It grossed $8.6 million in its first six weeks—very good, but not spectacular.

And, as could be expected, even Kim Kardashian: Hollywood has seen a slowdown: It made $2.5 million less during 2015 than it had just six months prior. While Glu’s revenues more than doubled between 2013 and 2014 and have crept up further since, investors are sceptical that it can reproduce its success. Its market cap has been more than halved in the past year, to a bit over $300 million; it posted a net loss of $7.2 million in 2015. Its multiple is a below-market 10.9.

To chase the next hit, Glu is doubling down on its tactic by signing up the biggest stars in multiple categories. Taylor Swift, who sits atop the Celebrity 100, will release a game later this year. The Celebrity 100’s top chef, Gordon Ramsay, just released Gordon Ramsay Dash, which is consistent with the Kardashian model and his area of expertise. The game is a celebrity-charged overlay of an existing Glu release, Cooking Dash, whose 2016 version has been downloaded an estimated 15.6 million times and has generated some $27 million. That’s before Ramsay’s firepower has even been applied.

Non-gaming companies are diversifying into celebrity apps that bank on the growth in messaging. “[Gaming’s] not going away, but it will converge with all things mobile,” says Zack Sugarman, vice president of digital at Wasserman Media Group. “You have to include communication, chat and emoji, though.” Hence Kardashian’s conference room fussing with her “Kimoji”, launched in December, which has since spurred simulacra from basketball player Steph Curry (StephMoji), Justin Bieber (JustMoji) and others.  

Kardashian’s new push: A $2.99-a-month eponymous app that gives paying users exclusive beauty tutorials and Kardashian content, which currently includes “How to Go Four Days Without Washing Your Hair” and “Bronzed and Braided”.

“When people looked at me in a way like, ‘Why is she stepping into the tech world? That’s not her territory! Stick to reality TV!’ I was like, ‘No’,” Kardashian recalls. “This is fun for me. Now I’m coming up with Kimojis and the app and all these other ideas. I don’t see myself stopping.” No matter the medium, looks like we’re stuck with her.