#StartupsEverywhere: Gig Harbor, Wash.

#StartupsEverywhere: Mike Schmid, Co-Founder, Sound Games

This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.

Building “The Shopify for Games” in Seattle’s Gaming Hub

Seattle-area startup Sound Games is building a distribution platform like Shopify for games, streamlining indie developers’ simultaneous launches across various storefronts. We sat down with co-founder Mike Schmid to talk about his journey from the App Store to building his own platform, the challenging landscape of raising capital in the current gaming market, and the operational burdens of navigating state-by-state compliance for a remote startup.

Tell us about your background. What led you to Sound Games?

I've worked at video game startups in Seattle, as well as on Apple's games business development team, where I focused on App Store policy, revenue, and co-marketing with large developers. My final year involved the Epic Games antitrust case, which influenced some of Sound Games’ concepts. After Apple, I worked at Rec Room, a Seattle-based startup, and Backbone before founding Sound Games with my co-founders, Jaco Abril and Sergio Abril. We've been around just over two years, building core tech, publishing games, and developing Shipmate, a platform for indie developers.

What is the work you all are doing at Sound Games?

We are store-agnostic, meaning our platform, Shipmate, works with all digital game stores, not just one. To get a game to market, developers usually use a software program called a game engine to generate the final game file, known as a binary. Then, you must bring that binary (a file that the stores can use to run your game) to a storefront, such as Steam or the App Store. We sit between the engine and the storefronts as a distribution platform; you can bring your binary to us, and we’ll help you launch your game across multiple storefronts simultaneously. Right now, 90 to 95 percent of games ship to only one store, such as Steam or the App Store.

We are also focused on commerce and the “pay once, play anywhere” concept, which means that after someone purchases a game, they can access and play it on any supported platform or device. There is a movement in games right now called 'Stop Killing Games', where people are tired of games being removed or deactivated after purchase. We are trying to find the approach that best supports that message, so we can have forever games available on multiple platforms or directly on your personal computer.

Are there any local, state, or federal startup issues that you think should receive more attention from policymakers?

The biggest frustration is the burden of managing remote workers across the country and the world. We are a Delaware C Corp, but we have team members in seven states, as well as in China, Spain, and Canada. We constantly get incorrect tax bills, and we have to talk to tax attorneys to get them corrected. We’ll get a $300,000 bill; our tax attorney will say this is incorrect, and then it will go away. It feels like a big racket. 

Regarding AI, it’s a tough situation. I do believe regulation is needed, but I don’t think anyone yet knows enough about what’s going on to regulate it properly, and I can't imagine they’re going to get it right on the first couple of tries. For founders, what we really need is predictability. If there are changes coming down the pipeline, we need a mechanism to let us know why those decisions are being made and what the impacts will be.

What has your fundraising experience been like?

Fundraising is more challenging than it’s ever been, especially if you’re not doing something very specific with AI. If you’re trying to fundraise as a game studio, it’s pretty doom and gloom since it’s a hit-based business. We are building the "picks and axes" or "shovels" for the gaming industry, which has been slightly easier to fundraise for, but it is still a massive numbers game. We closed a $6 million seed round after 100 conversations, and we’re comfortable where we are right now.

What are your goals for Sound Games moving forward?

Over the next year or so, we plan to pursue a Series A fundraising round. Our aim is to build a marketing plan to land and expand the technology part of what we’re doing. Because we have become highly efficient with the newest toolsets, including AI, I don’t think we need more than 30 people at this company. I feel like we could scale almost indefinitely with that number; we don’t need to scale up to 300 people anymore. The immediate benefits of AI efficiency will be felt in smaller companies that realize they can accomplish big things with leaner teams.

All of the information in this profile was accurate at the date and time of publication.

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