2009-10-05 10:22 by Chaitra Shetty
Established in 2006, Games2win.com today has presence in 23 countries across the globe and has a reach of 5 million unique users every week. In an exclusive interview with GamingXpress' Chaitra Shetty & Rohit Shirke, Games2win CEO Alok Kejriwal shares his insights on the serious business of casual games.
What's your view of
the market for casual games in India, in terms of size,
the number of users and the revenue potential?
I think overall India has never been a gaming market so far, so we are not talking about seeing structural changes or seasonal shifts or long term changes happening. I mean there was nothing to make any changes happen. The good news is that gaming is beginning to catch up in this country today. So if you quickly have a look at it historically all that gaming has been so far is Counter-Strike. I think there are around 5000 gaming cafe's in India, so 5000 cyber cafes X 10 gives us around 50,000 gamers. These are LAN café's or wi-fi café's. You can't call a country of a billion in which 50,000 people playing Counter Strike a country of gamers.
What's happening in my view just to answer your question is that the browser is now in front of everybody's face, not just for an hour a day but for 12 hours a day. The browser has to come into the workplace as well as home, home because of education and workplace because it is a tool to work. The browser is the window to the world today and a lot of people in India are experiencing their first bout of gaming through casual games thanks to the browser. So I would bet there are as many people playing 'Farmville' and 'Texas holdem' poker in India as many there are playing Counter Strike or maybe even more. This means that casual gaming even after arriving around six months or a year ago has taken the country by storm.
The second fundamental in terms of revenue is, India has never been a market that respects or pays premium for entertainment, you pay for entertainment but you never pay premium. One of the reasons is that, we release three movies a day. So if there is a market where three movies get released a day then you don't care, you can watch anything you want anytime. Another reason is piracy, and I'll be honest with you. Over a period of time I have started saying that is it really piracy or what? No one really knows because even that definition is blurring so if no one is going to pay for original content and people are going to enjoy shared content, I may rephrase IP v/s piracy then what's the business model?
I am talking about share ware here. If you are sharing, you are touching people. If you are touching people then brands get interested because brands want more and more people. They don't really care how those people got contacted as long as you contacted them. That's why a brand would put money on a hoarding at a railway station or in a football field or anywhere else because it touches people, so if freeware or shareware is the model where games are being played, brands are coming behind that. So my belief is that brands and advertising in India is the nirvana for gaming because brands have the pockets to sustain the spending for consumers, the consumers like free stuff and games is the golden thread that stitches these two together. So consumers love games and brands love consumers and that's the golden cycle.
What about Console
I am very bearish because I think the console business in India will die eventually, forget surviving but it will die as the hardware is too expensive. Hardware cost is alright to a certain extent but again I would argue that parents in the same household would rather get their child a P.C. A console on the other hand puts gaming in the face of parents and that is what they hate. Indian kids are policed by their parents till they die. That's our culture and in our D.N.A so we have got to love it and that's the beauty about India, so they will listen to their parents and anything that looks negative, anti studies or anti career or anti social will be a strict NO NO. So the console essentially belongs to the big American family room where the parents are at work or divorced and the kids are lying with the console, tummy upwards on their large carpet and nobody cares what's going on. But in a cramped household in an Indian city a console is a strict no, so that's a very big reason.
The most important reason being the expensive cost of development. Let's take the example of the Moserbaer effect on content. Moserbaer is saying, "Don't even think of buying a pirated piece of junk, just buy the original good quality cheap content". They are pricing their goods at such low rates that if the same youth or teen is getting a movie for approximately 80 bucks or 60 bucks with which he is getting a whole lot of songs for free how will he ever pay Rs.1500 for a cartridge for a game? So you have to bring the price to his horizon, you cant expect him to travel to America to buy it, and Rs.80 for a console game in India would work if there where 10 million bases sold which is also not there that is why I am very bearish on the large format gaming market which is P.C and console.
It's like brands and
games go together and brands want to touch the consumers,
don't you think that kind of adver gaming would work
for consoles if tried?
That's a great point and I am happy to clarify. I never meant adver games. Adver games essentially are very boring. Consumers don't like adver games beyond a point. Consumers don't want to play with brands. I meant games for the sake of gaming with ads in between them to fund the free game so it's essentially a Games2win model or a Zapak model. I didn't mean adver games. Adver games are fine. Khatron Ka Khiladi is the format; it's the content that matters. It could be sponsored by one or two people. You can have a Hero Honda bike in it but it cannot be about a brand. So that's what I meant. Content that is free and consumer centric but funded by a brand or ads supports gaming and not adver gaming.
A recent report suggests
the overall gaming revenue in India to be somewhere around 167 million dollars.
How much of it do you think comes from casual games?
I'll be honest with you as I think 90% of it comes from casual games because mobile games are casual games as the format of casual games. If your question is how much of it comes from online games I would say very little. I seriously doubt the methodology of generating these numbers. I think a lot of it is exported work development and that is not consumer market. You could be an animation studio, working for five years on a gaming project and if you record the revenue as animation and gaming then that's a very different story. They should break down those 167 million dollars into consumer revenue and trade revenue, which they have not done. From a console point of view I think the numbers are horrible and if you include the number of PS2's and PS3's being sold in India, I think the numbers are just declining.
At GDC this year the Sony online representatives went on stage and said, "We don't think we will ever make another Play Station". It's almost facing extinction. The consoles are becoming the Fiats and the Ambassadors of the gaming business except the magical console called the Wii. The guys at Nintendo said, "Was the content on the console bad or was the console bad". They figured out, everybody likes to play. Suppose I am not a gamer, I am a businessman, I don't have the time to play a game, I want to play Call of Duty but I don't have 80 hours to understand the game and then start playing it. My epiphany of what was wrong when games came when I was trying to play flight simulator. I have documented this, it took me 14 hours to just get a Jumbo Jet off the runway and that thing crashed within three minutes and I said, "Look, there is something phenomenally wrong in this business".
So the Wii comes along and says we will be the anti thesis of content on the console, we will not say no to the console. They created a console that is so casual and so down to earth and easy to play that the content won the hearts of millions and of course the innovation of the design. But what if the console today also plays very casual games, would that work? Probably it would, the console guys got so stuck up in extremely good games that they just alienated 99% of the market. So here's a data point for you, only 2% of people who play any console game ever know how to complete it, 98% abandon it at some point of the game or play the game for five years without going beyond a certain level because the level of difficulty becomes too high. So if the game costs USD 20 million to make, there is USD 10 or 12 million of content that very few human eyes are ever going to see. That's a complete waste of effort, time and money.
There are very few people in this world that could make transformers, so easy casual ready to go and ready to forget formats capture millions and cost thousands.
about monetizing casual games, what are the various verticals that you have tapped?
The obvious, the lowest hanging fruit has been advertising inventory in and around games, so a pre role, mid role and a post role are essential. A standard industry ad 300 x 250 works like a charm. It's because it's in the content literally in front of your eyes, people can't avoid it or in other words, people see it. If they find it interesting enough, they click on it. So the advertisers are happy because the CTR's (Click through Rates) are extremely high. The volume is extremely high so between two or three sites you can buy millions of users. The destination site receives traffic and communication is a part of the overall communication. If Nokia is doing a TV ad, this 300 x 250 window can even become a video ad to put inside the game so the format is compatible with what the agency thought of.
The next branch is adver gaming. Brands like it, investment is higher, reach gets sacrificed as you don't know how many people can play that game but the involvement and engagement is extremely high. So brands tend to play a dual game, they buy the media and also create an adver game. So we have mastered these, the advertising and the brand gaming. The threat is that, how long can you depend on brands to pay your salary? When will that ever stop?
So what iTunes did for the world at large, it taught teens and tweens that something can be bought digitally for 99 cents and that's a song. You can buy a song through an iTunes account or an iTunes card, store 10 dollars in your account and buy 10 songs as and when you go along. So nibble at digital cookies and buy as you walk. That led to the explosion of consumer revenue for gaming which is what Zynga has been able to capture really well and what we are planning to capture very shortly. So we are now going to branch out on making games that the consumers will play for the fun of themselves buy virtual goods, exchange and trade. I think virtual goods are a huge market and people like Zynga have done really well in that space. Even we are chasing that space like any good gaming company and it will also free us from the chains of being tied up to advertisers.
It's actually going to be, either you buy items that cost money or you buy a subscription which allows you to buy a list of items within your subscription period. Something like a buffet where you pay one time and eat all you can or pay only for what you want. We are going to work both models but whatever you buy is content. The content is all linked to one word that I love and that is vanity. People like to be vain people like to show off and become more clothed then others, accessories more than others so you invest be it in real life or online.
Let me give you a perspective, the most valuable commodity in this world today is the eye ball. The eye ball is not cheap, we don't think of our eyes as dearly as much as we should. For example on Games2win we get 5 million unique users per week, these are ComScore figures and according to them Zapak is now less than a million and ComScore records are time spend for 31 or 41 million minutes.
Now I want to ask people, "Where do you buy 41 million minutes from?" Internet expands time! So what happens is a spot on AXN at 7:33 PM cannot change, it cannot go to the third domain or it cannot go into a black hole. If you and I log on to AXN we will see the same advertisement. It will not change for anyone watching it, whereas if at 7:33 PM if you and I log on to Games2win we will see two different ads because time is expanding, the site is infinite. If 10 million people login to Games2win at 7:33 PM, I am serving 10 million different ads to 10 million people whereas on the television I am only serving one ad. Newspaper or a magazine is frozen time so is television or a hoarding, but the internet is infinite or you can call it a black hole. So therefore it infinitely expands revenue.
is the current reach of Games2win?
We have 5 million users weekly on our portal from across the world. These are ComScore reported numbers from July 2009, but the biggest shocker is what we have achieved through piracy and this is a very important story. About a year and half back, we noticed that all our games were stolen and nothing could be done about it. So my partner and I invented a technology called Inviziads, where we put invisible ads in our games, they become visible on the pirate site. The more you steal from us, the better our reach becomes.
ComScore has started to measure that also and this July the number was 20 million users per month. Now, we are in the top 20 sites in the world as per a news release by ComScore because of our pirated games and our own games. I call it moving with the times. A lot of gaming companies are moving in denial. China and India will always be a pirated market, you cannot stop it.
Do you look for
a specific advertiser for a particular game that you have created?
We don’t do advergames. Contests2win does advergames. Games2win builds games for consumers' enjoyment. Then we say this game is going to become popular and invite brands to advertise on those games. We don’t sell by category also as then it becomes very difficult to micro sell. You are watching sports today but I can bet that you want to watch romance tomorrow. We all are human beings and we need to market everything.
is the kind of user group that you have in terms of age group and according to
that what are the brands that advertise on Games2win?
The user group or the target group changes wildly across countries. In India its mainly the Indian internet audience consisting of 75% males and 25% females under which 15 to 18 years is initial and 18 to 31 years is the core target group and it gets smaller as we go 35 and above. In a market like U.S we have 85% girls less than 13 years, so it’s very diverse. In China the ratio is 50:50 for boys and girls, whereas in Brazil the boys playing games are a lot more than girls.
The kinds of brands that come on board Games2win are mostly FMCG companies, who try to connect with people. In America children under 13 are usually under parental supervision and therefore a lot of brands reach out to their mothers through Games2win.
If you watch cartoon channels there would be ads for dalda or other products which mothers would be interested in, as kids that age don’t generally watch TV alone. Similarly in gaming, therefore we involve a very important house maker. If you go to see, the American or the Indian women actually sit on the spending seat of the house. She spends the most amount of money in the house, so she is the most important person anyway and we thankfully have them through games. So FMCGs, telecom companies, lots of travel companies, lots of car companies in the U.S choose to save money by internet advertising instead of TV ads.
In India, we have had huge success with media companies like Zee and advertisers like Nokia coming on board very often. We also sell a lot of inventory on Orkut, so brands get exposure on Orkut through our games. Tata Sky, Intel and the FMCG companies are the main advertisers.
is present in 23 other countries right now, so how does the business development
work on that side?
In the U.S we now have a physical office and a physical guy who is managing proceedings and in the rest of the market we are doing ad network sales. We are talking to Google on a one on one basis and getting a deeper relationship going with them rather than putting an ad tag somewhere. We have a lot of independent ad network companies in these countries by our business development teams who talk to them. So it’s pretty much done on the air, through the wire.
many games are released per month and in terms of development, how much of it
is done by you and how much of it is acquired?
Right now we develop 3 games a week, so we are releasing 12 games per month; our target is to reach 20 games a month by December. Each and every game is made within the studios of Games2win, no outsourcing. We have had a few developers here and there but conceptually it’s all moving in-house. We have a 40 man team of developers and around 3 or 4 people work on a game at any given time.
We have four creative guys here who just sit and come up with ideas, so creative directors, copywriters, art director, art illustrator, art designers, web designers, technical heads, programmers, business developers and web masters are the basically what that team is constituted of.
Overall we have about 55 people here. Apart from India there is an office in the U.S which is the business development office and there are offices in Delhi and Bangalore which are the sales offices, as all our brand owners are in Delhi and Bangalore.
much of manpower or investment does a casual game call for?
It typically consumes about 100 hours of development and I would say that it would roughly cost about INR 1.5 lacs to make a casual game.
are different language options available on Games2win, so in terms of localization,
is it also done in house or have you outsourced it?
Everything is done in house. We have a lot of internet tools that we use to figure out various languages and keep improving our feature. We keep throwing it to consumers, we keep getting them beta tested. Everything is done in house.
Is there any particular
genre of games that works best in India? Or does it vary from region to region?
Actually very much, India is very hot on Cricket and car parking games. The sense is similar in the U.K funnily enough. It’s absolutely the reverse in the U.S, here dress up, cooking and romance are big time hits. When I talk about the romance it’s the soft delicate school girl sweet heart romance and nothing beyond that. It’s a very delicate balance that you have to touch. There is nothing that is indecent or over the top, but it makes a 13 year old girl feel comfortable about the other sex. We get a lot of research done in the U.S, a lot of teenage girls don’t know what it is to kiss a boy. They don’t know what happens when they kiss a boy. So they do a kissing game on Games2win and the guy’s eyes go crazy and they feel very happy as that’s the effect they are going to have on a boy.
This is something that we have come to know after a lot of behavioral studies. Dress up is a huge genre and so is cooking. A lot of young girls want to emulate their mothers. They want to be like their mothers but they don’t want the hard work that their mom does. So they don’t necessarily have to be committed to the game as the moms have to be committed to their jobs. They can just run away whenever they want. There is a game called Super Mom which is like taking care of babies. There are really cute babies but they are really annoying. So if one gets fed up of taking care of the babies one can just shut down the P.C and run away. You can’t do that to real babies.
do you market your site and tap the new audience?
The world’s biggest sites have been built without marketing. There’s only one word for marketing in our dictionary and that is content. Content is our marketing. The minute we make bad content, people will stop coming to our site no matter what we do. The minute you have good content on your site, you start getting people. You keep wondering where they came from. So the beauty about the internet is that the right content and the right service attract people virally. If you look at Miniclip, have they advertised ever? Unfortunately people who are advertising are stuck somewhere either in their content or in their service. They are convincing people to visit a site which otherwise would not be visited. So I actually say that if you are advertising an internet property, something is wrong with you.
incase if you are trying to tap a new market, how do you go about introducing
your site then?
Take an example of Naukri and Rediff. They will tell you that they have grown the market over the years virally until they reached a stage where nobody in India was remaining to be tapped. Now they are growing the category, which means if you and I are on Rediff they are telling the Peon outside to log on to Rediff and look for a girl to get married to. When you grow to a stage where you have used up the category, then to grow the category you have to advertise in traditional media but not till then.
Games2win and Zapak together hold one third of the traffic of Miniclip in India from Indians. Why? Miniclip never advertised in India at all. But 3 times the Games2win and Zapak users from India go to Miniclip. So I don’t believe I need to advertise, as Miniclip is telling me that in your own house I have got x million gamers who are coming to me and not to you my friend and I don’t advertise, I make do on good content. I don’t have shockwave, I don’t have the class that they have so what on earth am I going to advertise about? So read between the lines and those who need to advertise are in deep trouble.
is you latest quiz game feature doing?
It’s suffering; I think it’s a bad section, its not working. We are trying to push it. The reason we have done it, is that there are a lot of mothers who don’t like to play these silly games they like to play a slightly more intellectual format of games. So it’s aimed at the companion of the gamer, it’s not for the gamer.
On the same lines
are you planning to come up with something like e learning for kids?
We are thinking, the deal is that it has to be fun, we don’t want to make it school. We want kids to run away from school and play our site. So I have to make it fun something like "you teach the teacher" or something on those lines
How much of development are
you doing for social networking sites?
We have zeroed in on two networks namely Orkut and Facebook, we have tried our hand and failed. If you look at Orkut, Slapster is our application and so is ICL. We are trying our hand very hard on Facebook but it’s really tough in terms of penetration. It’s like fighting a dinosaur but we are trying our level best. The reason why we are even attempting to fight this dinosaur is that we have this bazooka that nobody else has and that bazooka is the 20 million users that we control, users that are also on Facebook. It’s the same group of people who go from Games2win to Facebook. We just want people to know that a Games2win game is also on Facebook, so play it on Facebook. It’s an extension rather than a new category build up.
We currently have 23 applications on Facebook already. They are doing pretty ok but I won’t boast about it because I don’t have any traction compared to the big boys.
you have M.M.O.G’s?
We don’t have M.M.O.Gs but we have a blend of S.M.O.Gs (Social multiplayer online games). Its social and its multiplayer, it’s online and it’s a game, it’s like a Farmville, you would call it a S.M.O.G.
a concluding note, do casual games actually make money?
Yes, they do. They make a lot of money, if they get popular to begin with and if you understand the philosophy behind a casual game. The point is to make people have fun. To pay you for having fun and for brands to pay you to meet these people. A lot of people who make casual games don’t know how to make money. A lot of game companies are so hell bent on making the game, being artistic, being whacked out, that they don’t think about the commerce part correctly. Entrepreneurs get diverted from the money making focus. Games always make money. People don’t know how to make money out of games.