What happened
Shares of Skillz (SKLZ -2.09%) are rising another 2.4% at 11:23 a.m. EST on Thursday after soaring 27% yesterday following the mobile gaming platform's investor day presentation.
During the presentation, CEO Andrew Paradise revealed Skillz was pursuing a cloud gaming platform embedded in a playable ad to help it reach new audiences, lower the friction in bringing new players on board, and increase the ability of players to find new games.
Image source: Getty Images.
So what
Lowering customer acquisition costs has been an especially hard nut for Skillz to crack, and that goal was the primary reason behind its acquisition last year of Aarki, a global demand-side advertising platform that reaches some 465 million people. So far, Wall Street has been unconvinced that this acquisition will profitably bring more players to the platform.
Skillz says pursuing the cloud-based model will let it attain its goal of reaching all players, across all systems, whether they're on mobile or desktop, while bringing in all gaming developers so it can have all games on its platform.
Now what
That's a tall order, and Skillz needs to prove it can actually leverage the benefits cloud gaming promises. Paradise said Skillz is actively testing the new model and expects this "potential game-changer" to roll out this year.
With this model, when a player taps on a game ad, they will be taken immediately to the game rather than being pulled out of the platform to download it from an app store. Moreover, new users will immediately be able to share the game with other players.
Investors seem excited by the potential and are keeping the momentum going.
