Execution Labs is a flexible platform designed to support talented, entrepreneurial game developers with different profiles and help them produce and commercialize their games. All teams that enter the Labs follow the same 4-phase process.
Phase 1: Prototyping (conditional)
Timing: max 2 months
During this phase, teams turn their initial concept into a rough playable prototype and iterate until they find the ‘core fun.’ This is also the time when an incomplete team can recruit final team members. If you enter the Labs with a prototype and locked core gameplay loop, you can bypass this stage.
Phase 2: Production
Timing: 6 months
The production phase is your core development phase in which you’ll create an MVP (Minimum Viable Product) for soft launch into test markets. During this phase we’ll provide both the tools and tech you need to make your game, along with the mentorship and advice you’ll need to give you the best shot at commercial success.
Phase 3: Acceleration
Timing: 3 months
After you’ve released your MVP, you’ll be learning as much as you can about how players are interacting with your game and how you can improve your game’s metrics. If you’ve never used analytics to help you make design decisions, this is when we teach you how it’s done. At the end of this phase you will release your game globally.
Phase 4: Live Ops
Once your game is out there in the wild, it’s time for Live Operations. You’ll be monitoring your analytics, doing frequent updates, and running live events to improve engagement, retention, and monetization.
If you’re more of a visual type, here’s a handy picture that sums it all up:
We now have two “tracks” for you to choose from when you enter the Labs: “spin” and “internal.”
If you’re on the spin track it means you plan to spin off into a new game studio once you reach the Live Ops stage. Your team will formally create a new startup, your IP transfers to that new company and the team members take ownership of the company. We’ll be right alongside you making introductions to investors if you decide to go that route (and as you’ll see below, you have access to $150k in additional funding). Importantly, a lot of the mentoring will be geared towards entrepreneurship, marketing, finance, and other business skills so that when it comes time to spin off, you’ll have received months of coaching (versus being a progammer one day, and then a business owner the next). Alternatively, if your game is not performing and no amount of tweaking can save it, your team could re-apply to have another go.
Teams on the internal track go through all the same phases and gates as spin track teams. In both cases, you will decide what game you want to make. But when internal teams launch their games globally, they do not form a new game studio. Instead, they enter the Live Ops stage and remain at Execution Labs. The IP remains with XL, but teams always get a share of the revenues that the games generate. Hopefully, after your first game is a success (or even if it’s not), you’ll want to remain in the Labs as an internal team and make another one.
You’ll need to decided which track you’re entering when you apply to the program. If you definitely want to create and operate your own game studio, the spin track may be for you. If you want your creative freedom but don’t want to deal with the administrative burden of running a studio, you may be more suited for the internal track. It’s totally up to you, and we’re happy to help you in your decision-making process if you like.
Deal Terms: What You Get
First, here’s what you get when you join Execution Labs. Big picture, you get an environment where you can focus on development and get support for all the gaps you and your team may have. More tangibly, this includes:
It is important to note that the $2k or $3.5k will be paid directly to individual team members. It is meant as survival money–not a salary–and is not meant to reflect what you’d normally get paid at a large studio. This is not a job. You are building your future as an independent creator, and the increased funding for internal track teams simply reflects the fact that their potential financial upside is lower, on a percentage basis, than it is for spin track teams (details below).
Deal Terms: What Execution Labs Gets
When you join our little Island of Misfit Toys, you’ll be giving up the predictability that came with your steady job working on Robot Zombies 8: The Sequel. We’ll be handing you a parachute, but you still need to jump out of the plane. More specifically, what you are giving up to participate in the program is a mixture of revenue on the project and equity in your spin-off company, if applicable.
We’ve simplified this portion of the Deal quite a bit. For spin track teams, any net revenues that are generated before you spin out and for one year after you spin are shared 70% to you and 30% to XL. Internal teams get 30% of the net revenues from the games they make as long as the team remains at XL. We define net revenues very simply: revenues less platform tax less user acquisition costs.
Equity Stake and Other Matters
This section only applies to spin track teams, since internal teams–while operating independently–won’t eventually spin out into their own companies. For spin track teams, you’ll give XL a 20% equity stake in your company. If you also need to participate in the Prototyping phase of the program, you will give XL an additional 7.5% equity since we’ll be taking on more risk to fund your team before it is complete and/or before you’ve built anything.
XL doesn’t get a Board seat when you spin out; your studio will be yours to run. And as mentioned above, XL retains no direct ownership over your IP. We do ask for Information Rights and the option to be a Board Observer so we can remain informed and help you succeed as best we can.