HQ Trivia shuts down as investors withdraw support

Brief:

HQ Trivia, the live mobile trivia game whose sponsors included General Motors and Nike, shut down last week after investors withdrew financial support, CNN Business reported.
In a memo to employees cited by CNN, HQ Trivia CEO Rus Yusupov said that "lead investors are no longer willing to fund the company, and so effective today, HQ will cease operations and move to dissolution." Yusupov also said the company had hired a banker to help find additional investors and partners to support expansion.
HQ Trivia had received an offer and was expected to close an acquisition on Saturday, but the deal fell through, per CNN. HQ Trivia's entire staff of 25 people was let go, and the game signed off with a finale watched by 28,000 people. A final prize of $5 was split among 523 contestants, the Guardian reported.

Insight:

HQ Trivia's closure brings an end to a tumultuous two-and-a-half-year history for a program that demonstrated how live mobile video content could engage a mass audience and lure big-name advertisers.

At its peak, HQ Trivia attracted more than 1 million viewers, who streamed the show for a chance to win a cash jackpot by answering progressively more difficult trivia questions. HQ Trivia blended content with sponsorship messages that worked as a form of native advertising, but demonstrated the limits of live video in maintaining an audience with monetizable content.

A year ago, HQ Trivia said it had surpassed $10 million in ad revenue as General Motors became the exclusive automotive sponsor for the first quarter of 2019. At the time, the show's audience had declined from its peak but still managed to reach about 500,000 people depending on the size of the cash prize or guest appearances by celebrities, Variety reported.

HQ Trivia two years ago started selling sponsorships, such as a reported $3 million deal with movie studio Warner Bros. Athletic apparel giant Nike also sponsored a surprise HQ Trivia game that offered a cash jackpot and product giveaways. Even then, there were doubts about whether HQ Trivia would have staying power or fade away as another mobile fad.

HQ Trivia also had its share of setbacks, including the death of cofounder Colin Kroll from a drug overdose in December 2018. Popular host Scott Rogowsky last year left HQ Trivia amid a dispute with management over his work on other projects like DAZN's baseball show "ChangeUp."

Parent company Intermedia Labs cut staff last year and announced that it would start charging a subscription fee for HQ Words, an off-shoot game of HQ Trivia. In March 2018, Intermedia Labs raised $15 million in a financing round that valued the company at $100 million, Variety reported.