The collaboration of The Oatmeal cartoonist Matt Inman and video game designer Elan Lee has been a fruitful one. And I recently caught up with Lee at our GamesBeat Next 2024 event to talk about the journey they have taken with Exploding Kittens.
This wacky entertainment franchise started as a card game, with a concept so wacky that it broke records for raising money on Kickstarter. Instead of hitting their goal of $10,000, they raised $8.7 million from more than 200,000 backers on the crowdfunding platform in 2015.
And this year, it broke through the transmedia wall, as it was adapted from the card game and successful video games to a streaming show on Netflix.
The Netflix showrunners are Shane Kosakowski and Inman. The series is also executive produced by Mike Judge, Greg Daniels and Dustin Davis of Bandera Entertainment; Peter Chernin and Jenno Topping for the Chernin Entertainment Group; and executive producers and creators of the Exploding Kittens franchise, Lee and The Oatmeal’s Inman. There are nine 30-minute episodes in the series.
Exploding Kittens also recently teamed up with Saber Interactive this year to create Exploding Kittens VR, a virtual reality adaptation of the popular card game. It is ready for the Meta Quest 3 and the Meta Quest 2 VR headsets. So far, it’s an example of an IP that keeps getting bigger.
This is a journey I covered from its very beginning. And it’s a story that just makes me laugh and admire in so many ways.
Here’s an edited transcript of our fireside chat. You can also watch the video if you like. If you listen to Lee’s tale, you can tell he’s a great storyteller — something that transmedia has always needed.
GamesBeat: Do you want to fill us in on your background and some of the favorite games you’ve worked on.
Elan Lee: Out of college, I got hired by Microsoft to work on this crazy new idea they had called the DirectX Box. They hired me as a lead game design and basically gave our team $200 million and said please don’t screw it up.
That was how I got started in the games industry. That was 1999. I think that’s right. Somewhere in there. We worked on the launch portfolio, the first six games. That’s how I got started, building six games for Microsoft. From there I did a series of other things. I worked on AR games, a few marketing projects, a series of six different startups.
GamesBeat: I remember 42 Entertainment. Making pay phones ring across the country.
Lee: Right. That was a project called I Love Bees. It was a radio drama built to promote the launch of Halo 2. Instead of delivering it over the radio we delivered it over pay phones, hundreds of thousands of ringing pay phones all over the world. That was a fun project, told at a really interesting time, when there was an opportunity to tell stories in a new, creative way. Instead of going forward to a new platform, we decided to go backward to a very old one that was rapidly going extinct.
From there I went back to Microsoft and helped them launch the Xbox One. I started as the chief design officer. From there I decided to try something new and opened a card game company called Exploding Kittens.
GamesBeat: Tell us about that transition. How did you meet and make this first game?
Lee: The game started as an attempt to take a break. I was burnt out from working in digital for years at that point. I needed a rest. I had left Microsoft. But I had this idea for a card game. Very simple. I teamed up with a friend of mine, Matt Inman, who’s the creator of The Oatmeal. Let’s launch this thing on Kickstarter. We wanted to raise $10,000. We were going to fulfill it out of his garage. We’d buy pizza and beer for all our friends, stuff some cardboard boxes, and be done. Maybe we could sell 200 copies of this game.
Immediately after that we went on the JoCo Cruise, a cruise for geeks basically, sitting around and playing games. We had very low aspirations for the game. Again, $10,000, 200 copies. We ended up, in 30 days, selling more than 219,000 copies of the game, which raised almost $9 million. That’s how we started a company without any investment. Nobody has hit that record again. For dollars people have beaten it, but as far as number of backers, after 10 years we still hold the record.
GamesBeat: There’s an interesting detail you have now about how many games you can ship in a year in card form, as opposed to digital.
Lee: I really like making card games. When I worked in the video game industry, we would work for somewhere between two and six years on a game before we could release it. I’m sure everyone here can relate. Card games are very different. We have a three-person development team. We can do about 15 games a year. What’s amazing about that is–although I love all of these games, it lets us play around with very rapid prototyping. Once we have a game idea that we like, we can get it out there in front of real people so quickly. It feels like a luxury.
In fact, as you allude to, the only limitation we have right now is marketplace saturation. A game lives or dies based on social media adoption. If we put out too many games we just can’t get the word out there.
GamesBeat: The transition from Exploding Kittens as a card game–it sold really well. Then you brought it to digital games.
Lee: My premise through all of this has been–I liked the Marvel model. Marvel figured out–they’ve been around 60 years. They figured out that comic books are very cheap to produce. If they put out a lot of them, even if they’re not good at predicting which ones will take off, if at least some of them take off, they’re in a good spot. When they take off, decades later now that audience has already invited those characters in. What that means is, now they can start making movies, making toys, making games, making theme parks – all the really big stuff – without having to start at multi-million dollar investments. They can start at several thousand dollars to get a comic out there and see what works. I love that model. That’s beautiful.
Instead of pursuing a video game career, which is the opposite of that model – a high investment every single time, putting out very few games because they’re so expensive and time-consuming – board games, you can put out a ton of them. They’re super cheap. You can build one with a really small team. My emphasis has always been on including characters. When you play the game, you’re introduced to a world. Once you’re introduced to a world, once you’re inviting those characters into your house and having a good time with them, maybe you want to see what comes next.
That model has been incredible. Now we have a Netflix show. Now we have people talking to us about movies. Now we have people talking to us about theme parks. It’s all because we printed little bits of cardboard.
GamesBeat: The difference with Marvel is that your very first thing was a spectacular hit.
Lee: That was not by design. But yes. I highly recommend, for anyone looking to start a new company, just have a massive viral hit on Kickstarter.
GamesBeat: But you went to mobile games. You went into different areas. How did you find the right things to do after the big card game hit?
Lee: I don’t pretend to know the right thing to do. Let’s be clear. What’s important to me is having step two and step three. Should step one work – somebody likes your card game – have step two and step three ready to go. Have the ability to port your game to mobile. If you look at our games, we’re very careful to make sure that every game has characters that you can sink your teeth into, or an IP that you might want to dive deeper into. Even very simple board games, we put characters on the box specifically for this purpose.
Also, all of our games put an emphasis on players being entertaining. The game tries to be a tool set, a funny tool set, but just a tool set to make the players you’re playing with entertaining. You care about something so much more when it helps you form bonds with the other people around you. That’s been the secret to our success. Every game hits on: make the people you’re playing with entertaining, and provide a world you can dive deeper into if you want, so we can continue to build that IP and create franchises.
GamesBeat: You’ve continued to make new card games, as opposed to, say, the Halo people. After Halo, everything was Halo. But you’ve experimented with many board games while Exploding Kittens continues to grow.
Lee: We’re a patient company. We’re obviously pushing Exploding Kittens. We have the Netflix show. We just launched a VR game. We’re talking about some stuff I can’t disclose yet, but some big, exciting adaptations to grow that franchise. But just focusing on that is not that much fun. It’s great and we have teams working on that. But I’d rather keep building franchises.
I love the idea that we can build a brand where you see the title Exploding Kittens on a game and you think, “I have to have this. No matter what it is, it’s going to be a great experience.” That’s the heart and soul of our company. That’s what I get the most excited about building.
GamesBeat: Tell us about the transmedia move to Netflix.
Lee: That was an interesting moment. Because we launched on Kickstarter, we were profitable on day one, without any investors. Which is nuts. This is my sixth startup. I’m very aware of what a privileged position that is. That’s unheard of. Because of the success of the company, we get approached by investors all the time. We’re in this privileged position where we can just keep saying, “No. We don’t want money. We don’t need money, Thank you, but no thank you.”
Then one day a guy named Peter Chernin knocked on our door. For those who don’t know, Peter is a legend in Hollywood. If you go and look at the credits of basically every movie you have ever loved, you will see his name there as a producer. He said, “Look, I have this investment group, the Chernin Group. We want to invest in your company. But before you say no, here’s what we’re offering. You have built this thing probably as big as you can as a game company. You can keep putting out games that will still be incredible. But you’ll hit a ceiling as far as games. Board games have a limit. It’s time to start thinking about franchises. It’s time to start thinking about movies and TV and theme parks. It turns out that I, Peter Chernin, am the best in the world at that.”
I looked at my partner Matt. We both said, “Yeah, that’s a good argument.” We took money from them. It’s public information. He invested $40 million in our company. That $40 million is still sitting in the bank. We didn’t need it. We haven’t touched it. But that’s not what we wanted. We didn’t want the money. We wanted his involvement.
The day after we signed the deal he said, “If you could make a TV show, who would be your ideal partner?” Without missing a beat, we said, “Mike Judge and Greg Daniels.” They worked on Beavis and Butt-Head, The Office, Office Space, King of the Hill, you name it. The best of the best. Peter laughed and said, “Well, you guys really dream big here.” That was the end of that conversation. We went home. The next day he called us up and said, “We should have a meeting.” We went to his house, walked into his living room, and there on the couch are Greg Daniels and Mike Judge.
They looked at us and said, “Hey, nice to meet you. Peter tells us we would both be idiots if we didn’t work on this TV show with you. Where do we sign up?” That was the second day of the deal. Now we have a show on Netflix and it’s the number three rated show in the world.
GamesBeat: Matt was very involved in getting that off the ground.
Lee: Matt, who created The Oatmeal, was the executive producer on the show. Which basically means he’s the lead writer, in Hollywood terms. The two of us work very closely together. I design the games. Matt designs the art. But when the show came about, he said, “This is going to be a full-time job. I have to do this thing every day.” We had to learn to delegate very quickly. We had to find people who had Matt’s sensibility, his art style, and ramp up the team. We knew that for four years, Matt was going to be tied up in this thing, and he was. He’s only just coming out of it. After the show launched, he took a break, and now he’s coming back. It’s been hard. He had to devote everything to making the show as great as it is.
GamesBeat: Between the two of you, this creative resource is limited. But you have all these media opportunities.
Lee: We’re trying to get better at it. We realize we’ve created a bottleneck. We’re trying very hard to train all the people that we work with–not necessarily to mimic us, but to predict the kinds of decisions that we would make and make those decisions.
GamesBeat: We’re all familiar with Robert Kirkman’s story. He’s the Walking Dead guy. He came on stage to talk at one of our events. His company Skybound has created its writers’ room, which is more of a Hollywood thing than a game thing. But have you explored the idea behind that? Having a bunch of people who carry on the intent of the original writer.
Lee: For us, a writers’ room–we have writers’ rooms. But they function a bit differently. We’ve had to invent this as we go. Our writers’ room is a group of game designers. We’ll take four days locked in a space and we’ll just play literally hundreds of games. The idea is, whenever we’re done playing a game, there’s the same question. Do you want to play again? Nine times out of 10 the answer is no. Sometimes the answer is, “I want to play again, but what if…?” Those are the games we develop. We’re getting good at making that more than just my decision. We have a group of four people who participate in those retreats and make those decisions. I’m so grateful that they’re as good at it as they are, because it takes a lot of pressure off me.
We then have separate writers’ rooms for themes of those games. That’s the next step. We have the game design locked. We like it. We’re ready to go. Now we have writers’ rooms that last a few hours a day, three or four hours, to figure out, what world should this game live in? Who are the characters? How do we put a wrapper around this thing? In parallel, Matt and his teams are working on the art. Once we have a theme even vaguely solid, we start generating tons and tons of art, looking for the right match. Between those three processes, that’s how we produce 10 to 15 games a year.
GamesBeat: Can you also cover digital games and future shows through that kind of process?
Lee: Not really. We have partners for those things. I’m very proud that we do almost everything in-house. That was part of The Oatmeal. We have 100 people working in the company and they’re mostly production. They’re mostly figuring out how to manufacture, distribute, and sell those games. When it comes time to do VR or mobile apps or a TV show, we must go with external people. We just don’t have those resources. We haven’t built those teams yet.
GamesBeat: It sounds like this step was so easy for you guy, but it’s taken decades for game adaptations to catch on in Hollywood.
Lee: Absolutely. We had to show there was an audience. Now, I want to make sure–this should not sound easy. Yes, we had a very lucky success, but Matt built his audience over a decade or more. He convinced people. “I have relevant things to say. They’re funny. Come back.” Then the game designs had to back that up. Exploding Kittens had to build our own social media. All of this stuff had to fall in line perfectly in order for places like Netflix to say, “Yeah, we’ll pay a ton of money to produce this thing,” in order for Mike Judge and Greg Daniels to sit on that couch and say, “We heard we’d be stupid to not sign up for this thing, and we agree.” Those are the side effects of all that hard work, which largely goes unnoticed and invisible.
GamesBeat: What are some of the new things on the burner right now? What’s coming next?
Lee: We’re always thinking about ways to expand the existing IP. We’re in talks about things like theme parks right now, which is nuts to me. We’re talking about movies. We’re talking about more games. We’re talking about ways to take some of our other games–Exploding Kittens, number one selling game in the world. We have two others right now, Poetry for Neanderthals and Throw Throw Burrito, which have the number two and number five spots respectively. A ton of interest now. We sell one of those games every 4.6 seconds.
It’s incredible to see people come out of the woodwork saying, “What does the franchise look like?” Instead of being printed on cardboard, those characters could move around and have voices and live in a world. What would that world look like? What would they sound like? I love those conversations. One, it’s fun to think about it, but two, it proves that–yeah, we put out 10 games, but all it takes is one or two hits and we get to have these incredible next step conversations.
Question: If you had to restart from the beginning again, would you still choose Kickstarter?
Lee: Kickstarter has changed a lot over the last 10 years. There’s a lot of things happening. I think the answer is no, and here’s why. When Kickstarter first started, everyone was excited. It was the new shiny thing. I always thought about it like, you know Q in James Bond? He has his secret laboratory with incredible inventions that no one has access to. That’s what Kickstarter was like. I backed more than 400 projects. It was an incredible opportunity to see these inventions and games and movies and all this new stuff.
Of those 400, about 100 have been delivered to me. I think most people had that experience over the last decade, which is so unfortunate. That means you walk into this environment with an unbelievable opportunity and it doesn’t deliver.
I’ve noticed that the successes on Kickstarter these days are much smaller. Not necessarily less money, but much smaller audiences. I think it’s largely because people have been burned there and refuse to go back. New platforms are necessary.
Question: Who is buying out there? What are they buying? I’ve been told it’s complete packages rather than pitches these days. But I’d like to get your sense of what a backable package looks like.
Lee: I’m not the expert here, but I’ll tell you my experience. We’ve shopped around our shows to all the big networks. Mostly the streaming networks. The thing that sells these days is your ability to say, “An audience will come.” They know how fierce the competition is right now. They know that they’re launching five shows a week. That’s not worth it to them unless they think an audience will show up. More than anything, you have to say, “Here’s who’s going to talk about it. Here’s why they’ll talk about it. Here’s our proof.” In my opinion, that’s 100% of what sales are these days.
Question: Your partner was a creator from the outset. Can you talk about how you think about IP partnerships, creators, and how they play into getting that audience?
Lee: Let’s look at that from the Kickstarter perspective. There were two things we did on Kickstarter, and I think both are really important. One, Matt brought a huge audience on day one. He’d been building that for 10 years. When you ask about finding the right partners, the numbers are right there. How many followers? How many reposts, how many likes? All that stuff matters, because everyone’s playing with the same algorithms.
But I would argue that’s only half the battle. The second half is your ability to engage an audience afterward. Let me talk about our Kickstarter for a second. Day one, we made a million dollars. That’s 100% The Oatmeal. He says, “I’m making a game for the first time ever” and his audience shows up. Day two and three we made a lot of money, but not nearly so much. Day four, five, six, almost nothing. Everyone Matt could bring in came in on those first two days, and then nothing.
We had an option. We could just watch this thing die off and make $2 million. Astounding! We’re done! Or we could try something new. The new thing we tried, which is the important second half of this, we said, “What if we stop talking about money? This is crowdfunding. What if we put the funding part away and focus on the crowd part instead?”
The next 25 days, we hosted a party on the internet. We said, “We will upgrade everyone’s game for free, not if you give us more money, but if you show us funny pictures.” We have a character in our game called Taco Cat. It’s a palindrome. Backward it’s the same word. “Show us pictures of a real live taco cat.” Hundreds of people did it. We created a bunch of new cards. “Show us a picture of 10 Batmans in a hot tub and what that means to you.” A ton of people did it. We upgraded the game. We had people show up at cat shelters and adopt cats, so we upgraded the game.
We basically said, “There’s a huge party, and everyone’s invited.” We never spoke about money again. As a lovely side effect, the numbers jumped from $2 million all the way up to $9 million. I think that one-two punch–you need a huge base to start, to broadcast that fun message. But you’d better have that fun message.
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