Greystripe nabs $8.9M amid questions over ad-supported games

Ad-supported game distributor Greystripe pocketed $8.9 million in a second round of funding led by The Walt Disney Co.’s venture capital arm.
The San Francisco-based startup, which offers more than 800 free mobile games via the online and mobile portal GameJump.com, claims to have delivered 7 million game downloads since last year’s launch. Greystripe said it plans to use the cash to broaden its relationships with advertisers and publishers and to expand its business in Europe and Asia.
“Greystripe’s groundbreaking distribution model is recharging the mobile game industry and fueling an explosion in mobile content,” said Steamboat Ventures chief Dan Beldy, who joined Greystripe’s board under terms of the deal. “Given its strong management team, market expertise and leading technology, the company is ideally positioned to capitalize on the tremendous growth in this area.”
The announcement underscores the increasing interest in ad-subsidized mobile gaming, which has seen new entrants including Exit Games and Hovr Inc. in recent months. But some established publishers have questioned the strategy of offering free titles as mobile gaming struggles to evolve from a niche market into the mainstream.
“Giving away games for free with an ad-supported model is not a good thing at this time,” Namco Networks’ executive Scott Rubin said at GDC Mobile in San Francisco earlier this year. “I think we as an industry have done a great job of training consumers to pay a few dollars for a game. I don’t think putting ads around games and giving them away for free is a good thing for the industry.”