Interview: Salil Bhargava, CEO of Jump Games Says The Indian Mobile Games Market Is Rs. 30 Crores; Things More Sane Now

In Part 1 of this interview, Salil Bhargava, CEO of Jump Games, a Reliance Entertainment company, had told MediaNama had outlined the companys plans for the US market. Interestingly, he had said that, at present, around 70 percent of their revenues come from overseas. Part 2 of our discussion with him, he talks about how the mobile gaming market in India has changed over the past year:

How big is the India market, if you take out the operator share?
If you take out the operator share - there are taxes etc - but I don’t think it’s more than Rs. 30 crores. But there are new revenue streams that are making a difference - like using mobile advertising and WAP site. It’s still small, but those kind of models will also emerge in India.
Is there a significant dependancy for you on Reliance Communications for revenues?
Not at all. There’s no dependancy at all. We’re operator agnostic. We’re a part of Reliance Entertainment.
Is the mobile gaming business in India viable yet - standalone?
Not yet, but I think it is becoming more and more viable for the existing players. There are very few people left in India.
What happened in India?
Most of the players who were focused on 20 other things, have stopped making games, or figured that they really can’t compete with those who’re making high quality games, which is what the operators are beginning to ask for in India as well. A lot of those people who flooded the market with a lot of content, are now beginning to fall off the radar in terms of mobile gaming. Most of them doing all kinds of other stuff also, and they’ve gone back to doing other things - ringtones and wallpapers business, and some becoming a platform company.
Are you in the black in India?
We’re privately held so I can’t disclose. We as a company don’t focus purely on India. What we have is a global deployment team. We have a team which does some aggregation for India, but in terms of deployment, it’s a global deployment. It’s still early for us as a company - we’ve only completed two years of the company.
Well, I’m asking because I’ve heard that Paradox Studios (the previous avatar of Jump Games) was shut down as a sick company…
No. I don’t know where you’ve heard this. It was restructured because all the people moved and started a new company called Jump, as a part of Reliance Entertainment. Paradox Studios was a legacy company, and used to do different things, including PC and console stuff. When we started Jump, we took a decision to focus on Mobile.
What kind of games are you making? Any iPhone games?
Not for India specifically. We do have the SDK and our teams are working on it, and we should have a game ready in the next 3-4 months.
What about multiplayer games?
We’ve done a few in the past as well. Its very early, and the bread and butter of this business for quite a while is going to be single player casual games. That’s not going to change anytime soon. A lot of people talk about multiplayer and bluetooth games, but its easy to stay in the news that way. The number one mobile game of all time is Tetris. It’s just a simple fun game. Most consumers don’t want to press a million buttons - they don’t want to complicated a game.
What needs to be done to ease the process of game discovery in India?
I honestly think, it’s education from the operator themselves, and the real growth will come when the subscriber growth starts tapering off. It’ll lead to a spurt in data. It’s understandable - for example, if an operator has $100, he’ll spend the money on subscriber growth. When that starts tapering off, he’ll still have $100 to spend. I honestly think it will take 2-3 years.

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Interview: Jump Games And The US Mobile Games Market; 70% Of Revenues Are From Overseas

Reliance Entertainment company Jump Games launched its US operations, setting up shop in Chicago. Jump has also set up an office in Singapore, and announced plans for a London office. Remember that Jump has licensed Manchester United content for a period of 3 years, a deal that is believed to be worth over $50 million. MediaNama spoke to Salil Bhargava, CEO of Jump Games. In Part 1 of this interview, Bhargava talks about the US market and why they launched services there, what they are looking for in an acquisition, and most importantly, how mobile operators across the globe have changed the policy for accepting games:

Why have you entered the US market?
Wel, if you look at the mobile gaming industry, the US is a very very important part of the business: from a geographic point of view, there are only five or six carriers. It’s easier to do business: it’s a very well established business model in terms of revenues and operator share. If you look at US, it’s a very big driver of mobile gaming revenues - maybe two or three years ago that wasn’t the case, but it has rapidly become a much more important market than Europe as well.
How big is the mobile gaming market in the US, if you take take out the operator share?
If you take out the operator share, it’s around $400-500 million. It’s the largest market in the world, in terms of a single country. If you include the operator share, it’s almost a $1 billion market, with operator shares at 50 percent. Verizon is the largest, then there’s Singular and AT&T.
How much are you investing?
We’ve opened an office in Chicago, and will be adding sales and QA (Quality Assurance) people in the US, because a lot of network testing can’t happen in India. Ultimately, over the next year, we really want to establish a design studio there. We’ve built the back-end infrastructure here in India. If you look at all the global majors, it’s a rapidly consolidating market. All the ones who are successful right now were the ones who were early enough to establish a back end, particularly here in India. Our focus has been to build out our back-end infrastructure. The idea is that by end of March, we will be 250 people in Pune, and leverage the lower cost infrastructure we have here to feed all the markets. Game design and high-end game production - even on the cell phones - I don’t think we have the experience yet. It could be a 10-15 people studio for concept work and building, and the porting and maximum QA happens here in India, and last bit of the QA in the US.
Why are you planning a design studio in the US?
The carriers have become very strict about the criterion. There’s a 3 strike rule, and game can get pushed to the back of the queue. We have to be careful about the criteria now. All these things really lengthen the process from creation to going up on the deck. In India, we really need to improve on the design capability. Today we outsource most of the game design - the concept, not the artwork. The artwork is good in India. Which is why we want to establish a design studio. Over a long term, we want to transfer that knowledge to India.
What kind of an investment would it require to set up a design studio in the US?
Really depends, but you’re looking at around a $1 million at least - it’s really about the people. At the same time, there are opportunities for inorganic growth. There’s so much consolidation in the mobile gaming business - the smaller companies are feeling the heat because of the credit crunch. So we’re talking to people, and looking - when the right opportunity comes, we’ll take the decision.
What capabilities are you looking for, in an acquisition - market presence, content licenses….?
There are various criteria - definitely one of things we’re looking for is distribution - would it be easier for us to buy instead of setting up our own distribution channel, which we’re in the process of creating. We’re looking at people, technology, design capabilities, content library.
Have you set a timeline by which you have to close this?
No deadline as such, but there is an active interest.
When will the US start contributing to revenues for you?
Well, it already is. We have multiple relationships, but it’s very important for us to have a local presence. Amit, whom we’ve hired, is the global head of sales.
How does South America play out as a market for you?
It’s a very interesting market - so far we’ve done things through partners, but we’re getting a lot of interest for the Manchester United content. Brazil interests us a lot - it’s a $200-300 million dollars as a market, then there’s Argentina and Mexico. The Americas office in the US will cater to entire South America. We’re looking to increase the content portfolio.
What about US as a content licensing market?
The US is still one of the more significant generators of content, which appeal globally. So we’re very strongly looking at enhancing that portfolio. One is from a game licensing perspective - and if people have content libraries, we might even buy them out.
What was the reasoning behind the Manchester United deal? Just getting a big brand?
We really wanted to establish ourselves in the world market, and we couldn’t think of a bigger brand than Manchester United - it’s among the top 10 recognized brands. And definitely there are revenue implications.
Do you see a revenue of above $50 million from Manchester United content?
I’m really not going to go into revenue figures - I’m contractually bound.
How many operators are you live with?
We’re live with 5 operators in India, and around 45 globally.
How much does International contribute to your revenues?
Around 70 percent.
How is the your pay-per-play model been doing in Europe?
It’s been doing okay. The whole pay-per-play model hasn’t been pushed yet in Europe. There’s just a lot of consolidation taking place in Europe. A lot of partners we’re working with right now are focused on that. The pay-per-play model, in 2-3 years, is going to be an important part of the business. The margins on the pay-per-play are similar as in case of downloads. Pay-per-play model is where a good game makes a big difference. At times, we’ve made more money on pay-per-play than pay-per-download.

Tomorrow, in Part 2: The Mobile Gaming market in India.

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@IAMAI MVAS: “What’s in a Game? It’s All In The Name”; Only 2-3 Players In Mobile Gaming In India?

It’s all in the name of the game; that the point that Zubin Dubash, GM VAS for Tata Teleservices drove home, responding to a point on issues around mobile gaming. Dubash said that for the customer, its initially the name that he sees on a game deck of a WAP portal. If a game is called Tetris - he knows what it is, he’s played it before. If it’s a Don Game and or an Om Shanti Om game - he can visualize it, and knows what he’s buying. But if there’s a game called Combat Tank Attack - he is likely to ignore it. Fortunately or unfortunately, that’s only guarantee to why a game is downloaded is because there is no option to preview a game.

Dubash was responding to a comment by Salil Bhargava, CEO of Jump Games, on the issues around mobile gaming. Bhargava said that quality is the biggest problem - You spent Rs. 50, and finished the game in one try. That is not what gaming is all about - it’s about a challenge, and a person consuming the content again and again. Three years back, there were 15 different companies who did various value added services - heard gaming was a new buzz word, and jumped into it. For them, creating a game was a 1 week job. Jump takes 6 months to make a game. Quality Assurance (QA) is a very important part of what we do. In Europe, there is something called a three strike rule - if you game gets 3 complaints, you get blacklisted by the carrier.

Operators in India are demanding quality games here as well. In India, there are two or three players left in the mobile gaming space.. There’s a significant skill set required. As the quality of games is improving…a couple of operators are saying that 30 percent of their mobile entertainment revenue actually is coming from games. You’ll hear about bluetooth games and multiplayer games being launched - that’s all just to get into the press. The bread and butter of this business remains single player simple casual games. The most downloaded game of all time is Tetris. It’s a simple and challenging game. It’s not the same every time you play it. This is what drives gaming.

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Jump Games Launches US Operations; Mobile Gaming Industry Woes

Jump Games, the mobile gaming company from the Reliance Entertainment group has set up shop in Chicago, and is looking to aggressively acquire mobile content licenses, as well distribute their own content in the US. Over the next few months, Jump Games USA intends to roll out content in the US market, and also make some key hires. Amit Khanduja has been appointed the EVP for Americas. They’re also looking for acquisitions in the US, and have hired VSC Consulting to identify potential targets.

Jump has consistently had an outward focus, and Salil Bhargava, CEO of Jump Games, had told me last year that a majority of their revenue comes from the International market; that is reflected in the licenses they have acquired in the recent past as well - the key among them being an exclusive deal with Manchester United for games based on the football club, valued at over $50 million. Other exclusive deals include those with Virgin Comics for their brands Devi, Ramayan 3392 AD and Sadhu, and for Fido Dido with Honest International. Jump had also launched a pay-per-play model for Europe.

In India, they’ve also tied up with Bollywood stars - actresses Bipasha Basu and Malaika Arora, and music composer Bappi Lahiri. Also note that another ADA Group Company has recently gone mobile with its games - Zapak. I wonder what Jump Games thinks of that.

For game developers, this international focus is due to better margins internationally, and the state of the mobile gaming in India, which is plagued by the following issues:

– Quality: many games are just modified versions built upon a “game engine”; there isn’t a significantly better gameplay on offer, and hence a largely inferior gaming experience. Games with really no difference in gameplay tend to put off users.
– Game Deck Management issues: Who decides which games are given a prominent positioning on mobile operator game decks? This is a qualitative issue, and developers tie up with Bollywood stars and movies, hoping that the tie-up will get them a better position on the game deck, and greater number of downloads
– Reconciliation of download numbers, low revenue share and long credit period for payment - read a related story here.
– Easy availability of pirated games: the bugbear of all mobile content: many shops which retail handsets offer pirated content in memory cards as an add-on. There are online groups that also offer pirated mobile games for free.

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