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G5's Suglobov: We will see more structured pricing on the App Store

G5's Suglobov: We will see more structured pricing on the App Store
One of the few European publishers to be listed on a stock exchange is Swedish/Russian company G5 Entertainment [STO:G5EN].

It splits its work between mobile and casual PC, and the development of its own intellectual properties and work for hire projects.

And as well as finding some success on the App Store, it's also announced it will be released versions of its game via Sony's PSP Minis program before the end of 2009.

Basically, it's involved in all parts of the business.

We caught up with CEO Vlad Suglobov to find out his views on the future direction of mobile gaming.

Pocket Gamer: As a mobile publisher, how do you see the balance shifting between the traditional markets such as Java to the likes of iPhone, WinMo, Blackberry, Android?

Vlad Suglobov: We define G5 as a developer and publisher of small - or casual - games across different platforms. There is a growing demand for these smaller, more affordable, games on different platforms, not only mobile.

When it comes to mobile platforms, I think traditional markets will continue to make good business for established players, but iPhone and other stores will be driving the growth in the market and the change in the marketplace. This is where we are going to see the explosive growth continuing, and the most innovative games.

Do you think too many companies are risking too much on iPhone, especially compared to Java, which is still generating a lot of business?

Yes, there's this gold rush inspired by developer success stories and supported by the press and Apple's smart moves.

It's exciting that iPhone is getting all this investment, talent, and effort. It's much needed to explore all you can do on the device and fill all product niches. As game developer, I also like what I see. I think everyone is tired of tiny screens, and those mid- and low-end phones and how much innovation you can package in 128K and how much performance you can squeeze from Java machine.

From business perspective however, before you jump in, you'd better have a sound cross-platform strategy and understanding of your business model going forward, and how you are going to compete on this market in the long term. Some developers and publishers are eventually going to lose money on iPhone. No doubt, some already have.

I think what happens with iPhone and App Store is slowly affecting how mobile operators and aggregators are doing their business. If they can open their decks to larger number of competing games, offer better business terms, and lower entry fees - everyone is going to benefit.

What do you think about the potential of the new portable platforms such as DSiWare and PSP Minis?

There are many of these devices out there, and people who bought them should be interested in games. I think the potential is definitely there, and with the right digital store model and the right pricing for games, it's going to take off.

If you are one of the 52 million people who owns a PSP, or you're going to get PSPgo, there's no reason not to check PSP Minis catalogue for affordable great games. Our first two PSP Minis are Stand O'Food (a time management game) and Mahjongg Artifacts 2 - both popular PC casual games.

I'm excited about the potential of digital distribution and the progress it is making. Consumers need more affordable games and wider choice, and developers and publishers want to be able to sell directly to their consumers. Digital distribution makes it possible. And it's going to work for all platforms that will support this model.

As well as a publisher, you work closely with other publishers, so how easy is it to balance these demands?

It's quite easy, in fact. Since 2005, our studio has developed some 15+ games for a number of large clients, including EA, Konami, and Disney, across virtually all mobile platforms. G5's studio is used to working on several projects simultaneously; we have more than 50 people across two offices in Moscow and Kharkov.

Our publishing operations internally are separated from the studio. G5 as a publisher would order G5's studio to develop certain game just like other customers, and the studio would work on it like on any other game.

We've developed and self-published original games since 2007, and I think it made us more flexible and safe partner for our work for hire customers. It also benefited our team. They have more freedom to realise their creativity while working on our original games, and they also have a chance to work on the games based on some of the world's most popular properties while participating in work for hire projects.

You've had success on the App Store recently with Stand O' Food so can you explain in more detail about taking that brand from PC to iPhone?

We've taken a number of games from PC casual format to iPhone: Supermarket Mania, Stand O'Food, Mahjongg Artifacts 2, Success Story, and recently Yumsters! 2. And our plan is to deliver continuous flow of casual games on iPhone - both G5 properties and properties and games from third party developers.

Going down from PC to iPhone varies in difficulty from game to game, and sometimes is quite tricky. You have to redesign controls, if not parts of gameplay. The plain port approach doesn't work well, in our opinion.

You have to understand mobile as a platform. Our experience as mobile developer helps us get things right most of the time, but sometimes it takes quite a few iterations before you get controls right. It helps us is that we know both worlds. We understand what makes PC casual game a good casual game, and we know how to make a game enjoyable on a mobile device with smaller screen.

The time management genre is a very competitive one so what do you think gives your games a competitive advantage?

We're not afraid to experiment and try different twists in terms of gameplay and new settings. There's so much you can do in this genre, even now.

When the original Stand O'Food game came out on PC in 2006, it was the first time management game based around the fast food theme. The game spent a lot of time in portal charts, and then more games about fast food restaurants followed.

In 2008 we released Supermarket Mania on PC, expanding time management setting to grocery store and using new mechanics. The game became success both in PC casual format and later on iPhone, and now we see more games coming out in this setting and trying different approaches. Another aspect is the effort we put into polishing our games before we release them. We are setting higher goal with every new release.

What's your opinion on the drive to 99c as the standard pricing for iPhone games?

We are selling our games at different price points, not only 99c, but the pressure is there, of course. I've heard opinions that you can't make business selling games this cheap, but our iPhone business is profitable.

As the platform matures and install base grows, I think we are going to see more structure when it comes to pricing, and also higher prices for niche games and blockbuster and/or branded games.

As developer, I'd rather see 99c prices, generous revenue split, and the opportunity for original games to sell, compared to limited deck space, lower revenue share and higher prices for consumers. I don't know for sure how many people have downloaded applications and games to their iPhones, but my gut feeling is it's way better than long-unchanging 4-5 percent for mobile phones.

Think about how many people are trying mobile games, casual games, and videogames on iPhone for the first time. iPhone is recruiting new gamers for our industry, partly because of the low prices.

Do you think features such as micro-transactions will help publishers generate significant more revenue?

I don't think micro-transactions can benefit all games. I think you have to design the game with micro-transactions in mind to achieve significant revenue, and certain genres work better than others. Also when you rely on micro-transactions as primary revenue source, it might limit your cross-platform portability and increase your porting costs.

That said, with the drive for 99c price on the App Store, it's worth exploring, and we are using micro-transactions in our upcoming releases.

Finally, as a publicly listed company in Sweden, what do you think is investors' attitude to games companies?

I think overall investors are gradually getting more appetite for risk. From what I see happening in Stockholm (where G5 is listed) and Moscow (where I spend most of the time right now), the activity is ramping up. There are new startups and there are investors looking specifically at casual gaming, iPhone, and digital distribution segments.

The market has been growing even through these hard times, and I believe there's huge growth potential for companies in this area if they play it right.

Thanks to Vlad for his time.

You can follow G5 Entertainment via its website.
Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.

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