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Nazara To Roll Out Operations In Africa; On Middle East Ops, Ad Revenue, Platforms

Mobile games company, Nazara Technologies* is all set to commercially launch its operations in the African market. The company informed that it’s at the marketing stage with a large number of carriers and at the integration stage with some, focusing on markets such as Kenya, Tanzania, Ghana, Uganda and Nigeria, among others. It’s also looking at the South african market, for which it intends to take a different approach. The company had announced an exclusive deal with games company, Electronic Arts (EA), under which it had acquired rights to distribute EA mobile games to telecom operators across 49 countries in the African continent.

Speaking with MediaNama, Nazara Founder & CEO, Nitish Mittersain informed that Nazara would offer a complete solution to telecom operators in these markets, wherein it would manage their entire gaming decks including taking care of end to end management, promotion, marketing, technology and content, similar to what it was doing in the Middle East. He stated some telcos would also be routing content from other gaming providers through the single integrated deck. Nazara would monetize through all possible models including the freemium try and buy model, subscriptions, in-app purchases and even advertising.

He mentioned that the company intends to end the year with a strong footing in the continent, and that it was taking some time to roll out as the company has to set up separate entities in each African country separately, due to exchange control regulations. The company is also in talks with Airtel, with which it shares an existing relationship for rolling out on Airtel’s African networks.

Middle East & Other International operations: In April 2012, Nazara had inked a similar tie-up with Electronic Arts for the Middle East region, providing Nazara exclusive rights to distribute various EA Mobile titles across its carrier partners in the Middle East including Saudi Telecom Company (STC), Etihad Etisalat (Mobily), Emirates Integrated Telecommunications Company (du) and Viva (Bahrain) as well as third party channels, aggregators and retail channels in the Middle East region. Prior to this, it had also inked a deal with Electronic Arts for India, Sri Lanka & Bangladesh regions, to get exclusive rights to distribute EA Mobile catalog to carriers, third party channels, aggregators, retail channels and local OEMs in these three countries.

Mittersain informed that the company has good presence in the Middle East region, including UAE, Saudi Arabia, Kuwait, Bahrain, Oman and Jordan, and has 180,000 registered subscribers in the market. The revenue sharing ratio in the market was 50:50 or 50:40 but some telcos were considering moving to Vodafone India’s rev share model of 70:30, he added.

Nazara is also in the early stages of expanding operations to South Asian markets such as Thailand, Malaysia and Vietnam.

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On advertising: Mittersain reveals that advertising is now a mainstream revenue source, contributing as much as 12-13% to the company’s total revenue. However, the percentage of advertising’s contribution is relatively smaller in the company’s Middle East operations.

Popular mobile platforms in the Middle East: According to Mittersain, Java is still popular in the Middle East market, followed by high-end Android phones and iPhone. He adds that the company has seen more stickiness on Android, compared to Java (feature phones). It mostly offers free games on the Android Play Store.

Contribution of International revenue: Nazara’s International business contributes close to 30% of its revenue but Mittersain expects it to close at 40-45% in FY14 following the company’s Africa roll-out, and sustained growth in the Middle East.

* Disclosure: Nazara Technologies is an advertiser with MediaNama

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