Tether Games’ skill-based titles hit $250M in lifetime revenue5 min read
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Tether Games is one of those quiet companies in gaming that sneaks up on you. I hadn’t heard of them before, but they just announced that Tether’s 27 mobile games have generated $250 million in lifetime revenue and hit 30 million downloads.
Tim and Aletheia O’Neil founded the Henderson, Nevada company in 2014. Starting in 2016, they started creating games where players can place wagers in competitive matches with other players. And they released their titles on Skillz, which grew quickly and was able to go public last year in a public offering known as a SPAC (special purpose acquisition company). Skillz is now valued at $1 billion in the stock market, but it’s an interesting fact that five of the top 10 games on Skillz were created by Tether Games.
But the folks at Skillz are finally taking stock of their accomplishments, and they will announce new titles soon that will push the boundaries of skill-based games to new genres and new audiences.
A growing market
While the esports industry at large grew to over $1 billion in 2021 (Newzoo), the mobile sector within this industry has also grown worldwide, even outpacing console and PC competitive gaming. Tether Games believes that industry reports are undercounting the growth of mobile downloads and revenue in skill-based gaming by up to 60%, based on the company’s own internal data on player engagement and spend.
The skill-based game market isn’t huge as some people don’t like wagering. People have to become familiar with the system to trust it as fair. The market is growing and Skillz has helped popularize it by pointing out how much money some players are making.
Aletheia O’Neil, chief operating officer, said in an interview with GamesBeat that Tether’s titles are about casual competition between players with accessible games. She said that Tim and she were semi-pro gamers who grew up, had children, and didn’t have the time anymore to play much. Aletheia O’Neil was a competitive player in StarCraft: Brood Wars, putting in as much as 16 hours a day playing it.
The catalog of games includes hit titles like Solitaire Cube, 21 Blitz, and Cube Cube. They’re relatively simple games that are designed for competitive play, either one-on-one or in bracket-based tournaments. Players place a wager as the entry and the company gets a cut of the winnings. For a $1 wager, a player can earn $1.75. In tournaments, players have a chance to win bigger prizes.
In a Solitaire Cube game, both players get the same deck and try to solve the game faster than the other one. Some of the fans have generated income of seven figures, Aletheia O’Neil said.
And thanks to the Skillz platform, you’ll never face a shortage of players to match with in the games. Aletheia O’Neil said some of the players are on all the time and they have amassed some extraordinary winnings.
“There is so much opportunity by expanding into new types of titles,” Tim O’Neil said.
Both O’Neils have been in the industry for a long time, with Tim in it since the 1990s and Aletheia started at Sony’s game studios in 2000. She moved on to other gigs at Flagship Studios and they started Gravity Bear together and worked there for a few years before moving on to Zynga. Tim worked at Shaba, Zynga, Gravity Bear, and ChirpMe.
“While we were at Zynga, we just really got obsessed with the idea of mobile games and competitive gaming,” Aletheia O’Neil said. “We were both semi-pro gamers in our youth and we wanted to expand into mobile bite-sized gaming competitions. So we formed Tether Games in 2014.”
Their first game, a social prediction game, did alright but the second one, Solitaire Cube, took off. One of their close friends joined Skillz and invited them to try it out. At the time, the platform didn’t have many popular games. And the monetization was about 10 times what the company expected, Tim O’Neil said.
“We saw that as opportunity because the core game loop really worked. And it tapped into that competitive need for competition that we had,” Aletheia O’Neil said. “That was in early 2016. It was just Tim and I at the time. We built 13 games on the platform, some of which are still the biggest games.”
Since that time, the company has hired more people and put more time into making each one, raising the production values. The games have generated a lot of revenue, and Tether Games shares part of that revenue with Skillz. Skillz also does co-marketing with Tether Games.
“In exploring the world of skill gaming and casual competitive gaming, we feel strongly that we’re at the very early days,” Aletheia O’Neil said. “If we fast forward five or 10 years, we see a world where it is a method of playing games and monetizing across a variety of products.”
“Our mission is being the Supercell of skill gaming,” Tim O’Neil said. “We want to be known for making the best and biggest games. What keeps us up at night thinking about it is the creative side of the game content.
The team has now grown to 20 people. The O’Neils started in San Francisco, moved to Oakland, and then migrated to Henderson, Nevada, where they had family. They started as a remote studio, so not many of the team members are in Nevada. The team is spread out among Calilfornia, Washington, and other states. The O’Neils have hired a lot of people from the network of game friends. Many of them have experience with mobile games, and sometimes they hire recent graduates to mix up the team.
The team bootstrapped their expansion without raising anything except a friends and family round. With Skillz going public and new companies coming into the space, Aletheia O’Neil said they may raise money to be more competitive and to figure out a self-publishing strategy.
“We are looking at how we can scale to the next level,” she said. “We are looking for a partner.”
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