Regarding finance, game studios exhibit different requirements than most startups. Pollen CEO Martin Macmillan explains what mobile game studios need to know when considering hiring a CFO.

The Chief Financial Officer (CFO) role is not about paying salaries on time, and the importance of the position carries a strategic role that delves into the mechanics of user engagement, monetization and financial performance of the company.

Mobile game studios stand out because they don’t hire a chief financial officer or financial analyst until much later in the lifecycle than most tech companies. When that happens, hiring someone with the knowledge to get right to work is essential.

What makes a good CFO?

A competent mobile game studio CFO has abilities that aren’t hard to find in the typical technology chief financial officer. The metrics that determine player engagement, user engagement and monetization need to be understood in the context of product or marketing and through a financial lens, so understanding how to make sense of these data sets is critical.

Financial modelling in this context goes far beyond essential profits, losses and cash flows. A complex network of factors that go into the player acquisition, retention and monetization cycle affect a company’s financial position. So it’s essential to understand these concepts and see how small changes in a performance open up significant prospects when a company is looking to scale.

Understanding the economics of player groups and being able to model these metrics, building LTV models and overlaying advertising spend and cash flow metrics are just part of the CFO’s job.

When should you hire a CFO?

The sooner, the better. It’s good for founders to handle their financial affairs initially, but it’s worth considering outside help once it makes sense.

The CFO works part-time or full-time, depending on the studio’s stage and the employee’s experience. Companies that have received seed funding should have some outside financial help a couple of days a month.

финансовый директор, CFO

Once a studio has raised a lot of capital in Series A, a full-time employee is appointed. Sometimes companies appoint a chief financial officer, whose responsibilities include direct tasks and other functions, such as HR.

Often, an experienced chief financial officer stays on part-time and oversees the day-to-day financial operations that a younger team member performs. This approach benefits the studio and the CFO, as each is enriched by the scenarios the CFO encounters when working for multiple companies in the sector.

Finance and Marketing

Understanding UA metrics affect the phenomenal success or outright failure when the studio seeks to expand.

Distributing each other’s roles is a way to build a scalable user engagement machine and requires immediate feedback from finance and product.

Here’s a list of the skills and attributes of CFOs who work in game studios and have had success:

  • Experience in the mobile gaming and ecosystem;
  • Understanding of marketing metrics – ROAS, LTV, cohort-level modelling;
  • Strong financial modelling skills and ability to model non-financial performance metrics (KPIs);
  • Willingness to use business intelligence (BI) systems to improve and implement economic models;
  • Knowledge of mobile advertising mechanics and payment cycles;
  • Ability to tell stories with numbers to report to investors;
  • Understanding of capital efficiency – optimizing funds based on the facility being funded;
  • Curiosity in building tools to automate processes;

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