Exploding Kittens: A Masterclass in Analog Business Growth
Discover how Exploding Kittens leveraged crowdfunding, innovative marketing, and strategic partnerships to build a multi-million-dollar tabletop gaming empire.
Key Insights
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Insight
The global board game market is booming, estimated between $9-17 billion, with strategic card game sales surging over 200% since 2019, driven by crowdfunding, improved design, and a desire for screen-free connection.
Impact
This highlights a significant market opportunity for businesses catering to demand for tangible, interactive experiences. Companies can capitalize on shifting consumer preferences away from digital overload.
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Insight
Kickstarter was successfully leveraged not primarily for funding, but as a powerful marketing tool to build a passionate community of "co-conspirators," leading to record-breaking backer numbers.
Impact
This demonstrates that crowdfunding platforms can be invaluable for market validation and brand advocacy, even for well-resourced entities. Prioritizing community over capital can lead to virality.
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Insight
Success in the competitive gaming market hinges on treating marketing as "elaborate storytelling" and fans as "co-conspirators," moving beyond conventional product promotion to create cultural phenomena.
Impact
Businesses must invest in creative, experiential marketing that deeply engages consumers and fosters a sense of shared ownership. This approach can differentiate products and build strong brand loyalty.
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Insight
Early attempts at diversifying product lines beyond a flagship hit (Exploding Kittens) faced significant challenges, highlighting the difficulty of replicating initial success and identifying evergreen products.
Impact
This underscores the need for robust product development and market research beyond initial success. Businesses must anticipate the 'one-hit-wonder' risk and continuously innovate to maintain relevance.
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Insight
Leveraging partnerships with major investment groups (Chernin Group) enabled brand expansion into IP development (TV shows, movies, theme parks) and with international publishers (Asmodee) for global distribution.
Impact
Strategic alliances are crucial for scaling and diversifying revenue streams beyond core products. External expertise and capital can unlock new market segments and brand extensions.
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Insight
The COVID-19 pandemic dramatically increased demand for tabletop games, driving a 90% revenue increase in 2020, though it also brought significant supply chain and production challenges.
Impact
Market disruptions can present unforeseen growth opportunities, but businesses must build resilient supply chains and operational flexibility to capitalize on them effectively and manage logistical hurdles.
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Insight
Physical retail channels (Target, Walmart, game stores) still account for a dominant 60% of sales, underscoring their importance for consumer access and visibility.
Impact
Despite the rise of e-commerce, brick-and-mortar retail remains a critical component of a comprehensive sales strategy for consumer goods. Companies should not neglect traditional distribution channels.
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Insight
The company's design process integrates the marketing team with veto power, ensuring that new games are not only fun but also have a clear path to market and compelling sales narrative.
Impact
Early involvement of marketing in product development aligns creativity with commercial viability, preventing the launch of products that are difficult to sell or explain to consumers.
Key Quotes
"Depending on who you ask, the global board game market sits somewhere between 9 and 17 billion dollars. Sales of strategic card games like Pokemon and Magic the Gathering have surged more than 200% since 2019."
"I mean, that's the best use I can think of for Kickstarter is like go to Kickstarter to build a community. It's not there to raise funds. It has the side effect of raising funds, but you're really raising a community, and that's the place to do it."
"We don't make entertaining games. We make games that make the people you're playing with entertaining. Like I think that speaks perfectly to what you're describing is let's connect. Let's sit around a table and let's laugh and let's eat food together and let's let's exchange ideas and let's play this silly game or kick each other under the table to cheat, or whatever it is."
Summary
From Digital Giant to Analog Empire: The Exploding Kittens Story
In an era dominated by screens, the story of Exploding Kittens offers a compelling narrative of how a quirky card game defied digital gravity to build a multi-million-dollar empire rooted in face-to-face connection. This isn't just about fun and games; it's a masterclass in business strategy, product development, and the enduring power of community.
The Resurgent Board Game Market
The global board game market is currently experiencing an unprecedented boom, with valuations ranging from $9 to $17 billion. Sales of strategic card games alone have skyrocketed over 200% since 2019. This renaissance is fueled by several factors: the accessibility offered by crowdfunding platforms, increasingly imaginative game designs, and a collective yearning for genuine, screen-free human interaction. Exploding Kittens entered this landscape at a pivotal moment, poised to capitalize on this shift.
Crowdfunding: Beyond Capital, Towards Community
The launch of Exploding Kittens on Kickstarter in 2015 provides a blueprint for leveraging crowdfunding not merely for financial backing, but for cultivating a fervent community. What began with a modest $10,000 goal quickly amassed nearly $9 million, primarily by converting the campaign page into an interactive game of "achievements." This strategy demonstrated that focusing on the "crowd" aspect, rather than just "funding," creates advocates who drive exponential growth and virality.
Marketing as a Narrative Art
Central to Exploding Kittens' success is its unique approach to marketing, treating it as "elaborate storytelling." From a cat-shaped vending machine that dispensed random items—including burritos and plungers—to engaging fans as "co-conspirators," the company consistently prioritized memorable, shareable experiences. This innovative philosophy underscores that in a crowded market, simply making a great product is only half the battle; the other half is compelling people to care, talk, and engage.
Navigating Product Diversification and Growth
While Exploding Kittens quickly became an evergreen hit, the journey wasn't without its challenges. Subsequent game releases like "Bears vs. Babies" and "You've Got Crabs" did not achieve the same sustained success, highlighting the "one-hit-wonder" dilemma faced by many rapidly growing businesses. This underscored the critical need for continuous innovation, rigorous game design, and a clear understanding of what makes a product resonate long-term.
Strategic Partnerships for Global Scale and IP Expansion
Recognizing the limitations of organic growth, Exploding Kittens strategically partnered with the Chernin Group for a $40 million investment. This alliance was instrumental in transforming the company into an IP brand, enabling expansion into television shows, movies, and other entertainment ventures. Further growth was secured through a majority stake acquisition by French publisher Asmodee, facilitating international distribution and entry into new markets. These partnerships illustrate the power of leveraging external expertise and capital for ambitious scaling.
Resilience in Unprecedented Times
The COVID-19 pandemic, surprisingly, proved to be an unexpected boom for the tabletop gaming industry. Exploding Kittens saw a 90% revenue increase in 2020 as families sought screen-free entertainment at home. However, this surge also tested the company's resilience, forcing it to navigate immense supply chain disruptions, production challenges, and increased shipping costs. Their mantra: "whatever it takes to be the only game on the store shelves," exemplified their commitment to market presence despite adversity.
The Future of Connection
Exploding Kittens’ enduring mission, articulated as "We don't make entertaining games. We make games that make the people you're playing with entertaining," perfectly encapsulates its market niche. In a world increasingly fragmented by digital isolation, the company champions products that foster genuine, joyful face-to-face interaction. This commitment to community and connection, combined with relentless perseverance, positions Exploding Kittens not just as a game publisher, but as a facilitator of essential human experiences in an analog world.
Action Items
Utilize crowdfunding platforms to cultivate dedicated communities and generate pre-launch buzz, viewing it as a marketing and community-building tool rather than just a fundraising mechanism.
Impact: This can lead to higher engagement, organic word-of-mouth marketing, and a loyal customer base before product launch, significantly reducing traditional marketing costs.
Prioritize creative, interactive marketing campaigns that engage customers and transform them into brand advocates, recognizing that product quality alone is insufficient for market penetration.
Impact: Such campaigns can create a strong brand identity, cut through market noise, and foster a sense of shared experience that drives viral growth and sustained customer loyalty.
Develop a pipeline of new products and iterate quickly to identify new evergreen hits, mitigating reliance on a single successful product and addressing the "one-hit-wonder" risk.
Impact: A diversified portfolio ensures long-term business sustainability and resilience against market shifts or the natural decline of individual product lifecycles.
Seek out strategic investors and partners who offer expertise and resources for scaling operations, expanding into new markets, and diversifying into related intellectual property.
Impact: This accelerates growth beyond internal capabilities, unlocks new revenue streams, and positions the brand for broader market reach and long-term relevance across multiple media.
Establish a company mantra or mission that emphasizes the desired customer interaction and value proposition, guiding product development and brand messaging to foster genuine connection.
Impact: A clear, unifying mission can inspire innovation, resonate deeply with target audiences, and create a distinct brand identity that stands out in competitive markets.
Integrate marketing and sales perspectives early in the product design process to ensure commercial appeal and a clear go-to-market strategy.
Impact: This prevents investment in products that are difficult to position or sell, streamlining the product launch process and increasing the likelihood of market success.
Build resilient and diversified supply chains to mitigate risks from unforeseen disruptions, such as pandemics or geopolitical events.
Impact: Ensuring continuous product availability despite external challenges maintains market share, customer satisfaction, and operational continuity during crises.