Interview

Interview: Gameloft's Gonzague de Vallois on... everything!

We sit down to talk strategy with the publisher

Interview: Gameloft's Gonzague de Vallois on... everything!
It's pretty out-of-date to call Gameloft a mobile games publisher. In recent years, the company has released games for DS, PSP, iPod and PC, not to mention taking its titles to Xbox Live Arcade and WiiWare.

How would senior VP of publishing Gonzague de Vallois describe Gameloft now then? "We could call it a casual games company working essentially electronically," he says.

"What we know how to do is make good casual games for the mass-market, and deliver them electronically. That's pretty much the position today, but our core remains the mobile games market. It's 90 per cent of the business."

However, Gameloft appears to be mulling a bigger splash in the traditional console market, fuelled by the popularity of its games on XBLA and WiiWare, and previous success with boxed handheld titles - Asphalt Urban GT sold half a million units on DS, for example.

"On DS we have no choice, it's boxed games or nothing, so we've gone for boxed, using a distributor," says Vallois.

"On Wii, so far our focus is on electronic distribution, but there are some size limits on what we can do on WiiWare, so if we see that some of our games can make sense as bigger experiences, we might go to boxed."

Vallois says that working with platforms like DS has benefits for Gameloft's mobile activities too, allowing its teams to get experience working on a rich platform with a touch-based interface - something that now applies to high-end mobiles and the iPhone too.

For example, he says that WiiWare title TV Show King is now being ported to touchscreen mobile handsets - the first Gameloft brand to start on console and then come back to mobile.

'Rich' is a word that crops up repeatedly throughout PG.biz's interview with Vallois. It's a key plank in Gameloft's current mobile strategy, to push 'HD' versions of its games with larger file sizes and more impressive 3D graphics - current examples include Assassin's Creed HD and Asphalt 4: Elite Racing HD.

"The market is in need of a giant step forward in terms of experience," says Vallois. "The innovators are getting bored, because we've reached the maximum we can do with 600k [file-sizes]. When you have rich, touch and motion sensors... wow!"

Gameloft isn't ditching those 600k Java games, of course. But Vallois says the company's goal is to launch simultaneous 'rich' versions of games alongside their J2ME versions, with Asphalt 4 being the first to get this treatment.

The publisher isn't hiving off iPhone, Symbian, N-Gage and other advanced mobile platforms, either. Vallois says that game brands are overseen by the same producers, with the chance for team members to move between them.

In Europe, 'rich' effectively means 'Symbian', and that's something operators haven't always been willing to support. In fact, many refused point blank to sell Symbian games on-portal. Vallois says that's changed, and flags Nokia's N-Gage as one reason.

"The launch of N-Gage has made some carriers wake up to the rich gaming experience," he says. "If they didn't want Nokia to take that part of the market, they have realised they should allow Symbian downloads on their platforms."

Vallois has a lot to say about the operators, as do all mobile games publishers. One concern is that there are still mixed messages coming from the operators, who are trying to open up to the mobile internet, while still keeping content revenues firmly on-deck.

"There'll be one guy who is selling games on-deck, and another responsible for off-deck, and they don't have the same P&L, so they're in competition," he says. "Some of our carriers, we don't even tell them we have an off-deck billing system, because they would not be happy!"

Vallois thinks operators are spending too much time and money on logistics, when they could be focusing on other things, and leaving the technical side to publishers.

"We think the best way is to leverage on the publishers' hosting platforms that they all have or rent," he says. "The carriers could then focus on marketing, not logistics processes. Some carriers in the UK are moving in this direction, but others are outsourcing to agregators instead."

Vallois actually thinks the trend for operators to outsource their games services is "dangerous", claiming that these aggregators' business models are based around maximising their margins, and so will impact how they run the games services.

"They will have a few brands to attract users, and then push their own in-house or cheap titles," he says. "That's really bad for the business. We've seen some carriers who outsource, and then a year later call us and ask if we want to launch a channel, because their business has halved."

Vallois's view - and the outsourcing firms are sure to disagree - is that instead of outsourcing, operators should let publishers run their own games channels, hosting their titles and managing the retailing.

"If I'm getting a 50-70 per cent revenue share, I have an incentive to have one guy working on my channel for that operator every day, merchandising it," he says.

"If he just increases sales by 5,000 a month, that's worth it. And carriers might have their top five publishers fighting for ideas to merchandise sales in this way. But we are maybe the only publisher to be pushing for this..."

Gameloft's belief that publishers will increasingly be managing their own channels both on and off portal is one of the factors influencing its roadmap, which is considerably larger than all its rivals.

Vallois confirms that Gameloft is scaling back slightly, from its planned 60-plus releases this year to around 40. But he also explains the rationale. "We think this is a mass-market industry, and we want to be a one-stop shop," he says.

"In every genre, we want to have the best game there. But that means 80 different genres: chess, backgammon, solitaire, sports, arcade and everything else. And if we want to renew each genre every two years, it makes sense to release 40 games a year."

It's a logical argument, but the point expressed by Gameloft's rivals is often 'the carriers won't take that many games'. Vallois takes that head-on.

"It's true that on a carrier portal where there is often one guy and limited resources, they may only be prepared to have one game for each publisher per month," he says.

"But this is not the way we will grow the mobile games business. It's true that we benefit more from this [Gameloft's strategy] when we have our own D2C channel than on a traditional deck where there is limited space. But we think this is a long-term good bet for the growth of the business."

Pricing is also a matter of some debate at Gameloft, with the company having consistently pressed for lower mobile game prices, often in contrast with the desire among some of its rivals to see higher price points for richer mobile games.

"When a game costs £5, that isn't massmarket casual. In our B2C service, we brought prices down from 5 Euros to 3 Euros, and after the first month, we were doing more revenues, and nearly doubled our conversion rate," says Vallois. "We see there is price elasticity in this business."

Some operators clearly agree - cutting some games' prices to £2.50 or even £1 and seeing them shoot into the ten most popular downloads - but others don't. Vallois cites the example of seeing the five-year-old King Kong game still selling for £5 on some portals.

"Effective merchandising and marketing is a long-term bet, but the problem in this business is that carriers and many publishers are short-term," he says. "They have targets, and of course we have our targets to make too. But we have to open up this market."

Gameloft has been slugging it out with EA Mobile for the position of market leader for some time now, with Glu a little way behind but still part of the Big Three.

Does Vallois see more competition coming? "I think EA and Glu will stay as our biggest competitors for quite some time," he says.

"Vivendi are pretty rich, so let's see what they do. Real bought Mr.Goodliving but didn't make much of it. PopCap has an operation but I think they make much more money licensing Bejeweled to EA. And of course there is Namco, Sega Mobile and all these guys. But it's a specialist market."

However, he concedes that the story is different on platforms like iPhone, where the likes of Sega and PopCap can punch above their existing mobile weight.

Gameloft is also piling into iPhone, initially with a slate of six casual titles, with a motion-enabled Asphalt game following in the near future. The publisher has already shown its intent to be flexible in its App Store strategy, cutting the price of three iPhone games just a week after launch.

An intriguing side-note to Gameloft's strategy is its diversification into non-games content, with the recently-launched Gameloft Live chat service, spanning web and mobile.

"It's about what we can bring around our gaming experience that makes sense to the user," he says. "It's bringing more stickiness to our shops. If people can chat around the games, they'll be on the site, and they may buy more games, so it's about bringing a richer experience around Gameloft."

Overall, Vallois says he is optimistic about the direction of the mobile games market, particularly with the new mobile platforms like iPhone and N-Gage. "We are very optimistic, because we see innovation coming," he says.

"We lost a year, because the first iPhone launched without games, and N-Gage was delayed. It's like the impact on the video game business if the PS2 and Xbox were both delayed. But these [mobile] platforms have come now, so it's really exciting."
Contributing Editor

Stuart is a freelance journalist and blogger who's been getting paid to write stuff since 1998. In that time, he's focused on topics ranging from Sega's Dreamcast console to robots. That's what you call versatility. (Or a short attention span.)