Int. with Indiagames Samir Bangara – Part 2

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“What sets us apart is the depth of the entire team”

In the first part of the Interview that Indiagames SVP – Business and Corporate Development Samir Bangara gave to Animation Xpress.com Editor Anand Gurnani, the discussion was focused completely on the company’s new Games On Demand Initiative.

In the second and concluding part of the interview, Amongst many topics Samir elaborates on the other latest games and brands that Indiagames is working on; on the process of monetising content as well as on the financial discipline that has resulted out of TOM’s acquiring a major stake in the company. The Indiagames SVP also talks about the strong team that the company has built in terms of the business and technology…

Following are excerpts from Part Two of the interview

Besides Games on Demand what are the other new developments and games from Indiagames?
One of the most recent developments has been the significant shift in our strategy for marketing of games, especially in the international market. We recently launched Office Games which is licensed by NBC universal. Office is a popular show in the US as well as in the UK and we created a set of six casual games around the show titled The Office Games. The games are basically the silly things that one could do in the office. The tagline is “for zero productivity – play the Office Games”

NBC Universal saw this game and we formed a licensing relationship with them. For the first time Indiagames’ content is actually going to be advertised live on US television during telecasts of the The Office. The game is available across all operators in the US. We are spending a few hundred thousand dollars doing all the marketing in addition to the TV commercials. There is going to be cinema advertising, print, online, TV, the whole nine yards. In the international market, making a good game is the entry cost for doing business. You then have to prove your mettle with advertising dollars. With the marketing push comes premium deck placement on operator channels or “featuring the game”. This can make a 20x difference in download volumes.

The Office is also going to be available in India in some interesting avatars.

Please elaborate?
In India we have a tie up with one of the top tier home video publishers, Excel Home Video. The Office is going to be the official game for the movie Corporate on DVDs. The Corporate DVD will have a flash based version of the game that you can play on the DVD player or on the computer. We are also bundling four to five mobile games worth Rs.400 to Rs.500 along with this offering.

So when you buy the Corporate DVD (Excel Home Video) you’ll get this game as well as one the option of signing up to get five more free games from Indiagames. Through this partnership, you would see this flashed across the eight to ten thousand outlets across India. We give each other mutual exposure wherever possible.

What revenue do you see from games like these?
The Office is a casual game pack and casual games in the US are actually quite popular. The bulk of the downloads come from casual games. The potential for revenue is huge. Case in point is Jamdat (now EA Mobile) which made $55 mn from sale of 3 titles last year viz., Tetris, Bowling and Bejeweled.

Could you please explain for our readers, the entire content creation cycle and how the monetization takes place for Mobile Games?
There are 2-3 models. One model is you license a brand and develop the content. For instance Indiagames approaches Universal to license Jurassic Park. We do a three year global exclusive deal to say that anything in Jurassic Park, in the mobile domain is with Indiagames. They give us the right to use that brand and we pay them an upfront advance royalty, which is to be adjusted against the royalties as the game is launched and consumed. This could be from a few thousand dollars to a few million dollars. I think the biggest deal so far has been 150 million dollars plus that Jamdat paid for Tetris, so it could be anything – it depends on the brand you are using.

That’s the first step in the branding model. Thereafter the Game Design team creates a concept and complete level design of the game. Once this is approved the programming begins. As programmers give life to the game the graphic artists add images, character, backgrounds etc. The game bounces back and forth between programmers and graphics and finally reaches the testers once a reference build is ready. Once all the bugs are ironed out the game then goes for a final check for playability quality. If it gets shot down here on gameplay or immersiveness, its back to the drawing board!. Finally the game is handed over to operators to launch on their portals.

The money comes when a consumer enters his web portal or web services on the phone and goes to the game section, s/he reviews the game and clicks “download” The download then appears in the consumer’s bill. This download is then reflected in the consumer’s bill at the end of the month. The consumer pays that bill and the operator receives the money. Once the operator collects the revenue it pays the content partner its requisite share of revenue. The entire process can take anywhere between 60 to 120 days. It’s a fairly long working capital cycle!

If the game is based on a licensed brand, we then make payments to the license owners.

In the case we create our own brands then there is no sharing of revenue with the licensor or IP owner but the rest of the chain is the same. Interestingly quite a few of our original mobile games are doing well internationally. These include Goolie, Sexy Pool, Hungry Puppy, Pub Games, Rotate It etc.

The third model is aggregation which we only do in India, where we take mobile content from 3rd parties and distribute on operator decks. We call this value added distribution because we don’t just distribute the games but also practically rebuild them from scratch for low end handsets that the games were never originally conceived to be launched on. In this model instead of paying royalties, we pay revenue share to the 3rd parties.

Is the mobile games space something like the film business where say one out of eight movies does well and one out of 30 does very well? Is there a metric of hits n misses ratio that you apply in this business?
This is a hits and misses game to some extent. Like the example I shared with you earlier about Jamdat making 55% of revenue on three of its games. In our case we have had a more balanced portfolio. Interestingly we also have games which have been generating downloads for the last two and half to three years. However this is a very dynamic situation. I won’t be surprised if The Office is 80% of our US revenues for a while.

If you look at the revenue part is India a significant revenue generator for you?
Yes, India is our single largest market worldwide. In the GSM world alone there are about 800,000 downloads on a monthly basis with another 4-5 million game play sessions between Tata and Reliance.

How many operators do you deal with internationally? How do you manage to keep track of the business in such a complex environment?
We deal directly with more than 65 operators from around the world. We have
sales people in every region that we operate in. What sets us apart is the depth of the entire team.

Could you please share a little more about the Indiagames team?
We are probably the only VAS company in the country that has a broad based management team, with local folks in US, Europe and China. Steve Gordon who is heading EMEA for Indiagames used to be head of games for Vodafone, Sean who is heading Americas is a serial entrepreneur who is in direct touch with all the Hollywood studios. Both Steve and Sean have the pulse of their respective markets and that’s where the bulk of licenses emanate from.

Back home, some of our key team members include Deepak Ail, who has been with the company since inception, there’s Mariam Dholakwala who is a leading authority on flash globally, there’s Rishi who leads the 3D team and finally Sachin who heads all the new initiatives and R&D on the multiplayer side.

Could you please share a little more about the Indiagames team?
We are probably the only gaming company in the country that has which has a braod based management team, having not only presence, but locals representing us in the international market. Steve Gordon who is heading EMEA for Indiagames used to be head of games for Vodafone, Sean who is heading Americas is a serial entrepreneur who is in direct touch with all the Hollywood studios. Both Steve and Sean are on the pulse of their respective markets and that’s where the bulk of licenses emanate from.

On the technology side there is Deepak Ail, who has been with the company since inception, there’s Miriam Dholakwala who is a leading authority on flash globally, there’s Rishi who leads the 3D team and finally Sachin who heads all the new initiatives and R&D on the multiplayer side.

I think that the depth and breadth of the Indiagames team is one of its major strengths.

TOM’s acquired a substantial stake in Indiagames what is the impact
If I were to pick the single most significant contribution that TOM has made, I’d say it is the financial discipline that they bring in to the company. This is the one thing we probably wouldn’t have done without their support. Since TOM is a NASDAQ listed entity, all its significant subsidiaries need to be compliant with the latest reporting requirements and corporate governance procedures in the US. Indiagames has a Big 4 audit firm, we close accounts on the 28th of every month, have a quarterly US GAAP review as well as annual US GAAP review and finally March ending audit based on India GAAP. This level of corporate governance will stand us in good stead when we evaluate taking the company to the public markets in the future.

So are you looking at an IPO?
We’ve certainly evaluated this but we don’t want to jump the gun. We want to be ready for an IPO, at a certain scale of revenue and we know exactly what that revenue point is. We are a wireless, internet, games and above all India growth story and therefore have no doubt that there will be interest in our paper. However listing prematurely is a grave mistake that companies tend to make and we will avoid that at all costs.

Indian Listing
We may, it may be international and then Indian – laws permitting. Whenever it happens, it will the right time for the company rather than just a heated stock market that prompts the decision.

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