Pictured, left to right: Andrew Giosa, Rob Caouette, Alex Baker

“It’s like crack,” said BlackBerry Partners Fund’s Alex Baker of the popular free-to-play or “freemium” financing model in games, which aims to hooks players with a basic version of a game, and upsell them on more advanced features. But while it’s a successful model when all goes right, the unpredictability of a game’s popularity also make it one of the hardest models for which to predict ROI, he added.

Baker shared his insights on the mobile gaming market as part of the Taking Your Interactive Company to The Next Level event presented by Interactive Ontario and Export Development Canada (EDC) on Tuesday afternoon.

As principal of the Blackberry Partners Fund, Baker represents a $150 million fund focused on mobile computing. He was joined on Tuesday’s panel by Hamed Abbasi, managing director of Toronto gameco Vast Studios; Rob Caouette, sector advisor, Information and Communications Technology (ICT) Sector Team, Export Development Canada and Andrew Giosa, senior account manager, RBC’s Media & Entertainment team.

Vast Studios served as the presentation’s feature case study for startup financing, as it took its indie business to the big time with Lost Chronicles: Fall of Caesar via popular game hub Big Fish Games.

Abbasi noted that in the start-up phase of Vast Studios, he approached EDC and the RBC for financial assistance to help support development and maintain cash flow, which becomes a challenge with heads down during a six-to-eight month game development period.

“With RBC and EDC, you have to prove money will come in so that when the games come out, you can pay it back,” said Abbasi.

Key to his strategy in the early stages of forming Vast, was figuring out whether the company should be a publisher or a content developer.

“When we focused on development, we created great content that everyone wanted to publish, and that guaranteed us marketing for our product,” he said. “Now we have a track record.”

RBC’s Giosa said such a track record definitely helps the company’s case, as well realistic sales and revenue forecasts. Dialogue between parties is also key.

“When it comes to structuring a deal, bring your partners to the table early on and we’re happy to chat,” he said, adding that money doesn’t appear overnight: RBC met with Abbasi in 2009 and nothing was put together until 2011.

As for bringing the product to other markets, EDC’s Rob Caouette said the organization’s Export Guarantee Program acts as co-sign on a loan.

“It provides the bank with comfort and lets them take a little more risk because it has the backing of EDC,” he said. “But it’s not mean to last for three to four years, more like 12 to 18 months, though you can always renew.”

He also adds that EDC is not solely focused on games, but digital media as a whole.

“There are lots of opportunities for Canadian companies to go abroad,” he said.