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MGF 2011: Big publishers don't know shit about emerging markets says HandyGames' Kassulke

Understand the culture or the game will fail

MGF 2011: Big publishers don't know shit about emerging markets says HandyGames' Kassulke
With billions of potential customers in emerging markets, the potential to sell a lot of games looks easier than the Western markets. Yet despite this, many Western publishers and developers are failing to sell.

Christopher Kassulke, CEO of HandyGames isn't fazed by others' failures though, stating "All the challenges can be handled. If you're using free games, then that's an opportunity to give away games while still making money."

Oksana Loginova, head of the distribution department at i-Jet Media, said social networks and social mobile games are synonymous in Russia.

'You must share your revenue with social network as they have the audience," she explains. "But the great thing is that, in terms of social mobile games, you have the same people that play games via web or mobile, and they pay twice.

Home on the Raj

Monty Munford, of the self-styled Monty's Social Media Outlook and general industry gadfly explained the situation in India, where he lived for two years

"In India, there are 50 million landlines and 650 million mobile users. But the thing

about India is that it's a very, very long game. You can't just set up in India and make money. Aggregators favour Indian over Western companies'.

Is India's market is much more reliant on the aggregator model than in the West, asked chairman Tim Harrison?

"Yes, but there are a lot of barriers to get in there if you're a Western company. It's protected against European encroachment," Munford said.

Je Alipio, executive producer at Buzzcity had a similar experience. "It's the same in other emerging markets like Malaysia, [becoming successful] is all about trust."

So how can a Western company build that trust to overcome the domestic bias?

'"We've been doing it for ages. We were one of the first," Kassulke said.

"Yes, it's a lot about trust, but is it better to be number one in Luxembourg, or number one in India? It's much more interesting to attack these markets."

"We have to think differently. It's not just being European and then transferring that thinking over to Russia or China."

Show me the rupees

But even once companies have their product in these markets, another problem has been actually getting your money. Kassulke says this is still a problem, but one that can be overcome.

"Getting revenue out of Indian operators isn't easy, but if the game is free, then I get my money through Google [advertising] and there's no problem."

Loginova didn't believe carriers in all emerging markets were so tight in terms of giving out a share of the cash. "It's very strange to discuss the percentage mobile operators get, as for us it’s just a payment system. It's more important what social networks get."

So what percentage do social networks get? "Same as Latin America - up to 85 percent," she said."But they really earn this money [by providing customers]. In Russia, it's often not more than 55 percent. Maybe no more than 50 percent."

So why do so many big companies fail to make an impact in these markets? Kassulke believes it's mainly because "they think European."

'You can't sell the same [Western] game in Japan, and it's the same in India. You sell cricket games, or Bollywood games. Big publishers, they don't think shit about [the culture]."

Feature or smarts

With high-end smartphones fairly rare in these markets, pricing models for customer's mobiles are different than Western markets, and companies need to take this into consideration.

According to Munford, "it's mainly pre-paid in India. Are they going to take minutes out of their price-plan to play your game?" he questioned.

Alipio stressed the fact that users tend to look outside of carriers to find their games. "GetJar is one of the top five mobile sites visited in India. [Mobile users] are hungry for content, but they either can't or won't pay for it."

For similar reasons, HandyGames has been moving strongly into free games, with Kassulke saying that he was expecting 10 million downloads in 2011 from that model.

Naturally, he believed this direction was the right way to go if developers and publishers want to make money in the emerging markets. "If we do 10,000 downloads [on an emerging market app store] making £2,000? That's not making money. Go to McDonalds and make more money."

Summing up

So is there one piece of key advice the panel could give to those hoping to crack the emerging markets?

Kassulke took a very Zen approach. "Be one with those markets, check them out."

'If you plan conquering with iPhone games, forget it. Android will [get there], but these will not be high-end Android devices.'

Alipio advised against charging an upfront fee, “having a solid Freemium strategy would be key.

“For instance, even if the user downloads something for free, and they don't purchase anything, they see an ad.”

He also stressed the importance of appealing to the specific culture, advising everyone to “localise your game. If you have an English game, it won't work.”

Munford agreed. “If you want to break the Indian market, you have to have a partner in India that is embedded there and established there.”

Choosing the right device for your game was the most important of all, thought Loginova; “Developers must bring it to the most audiences possible.”

Will's obsession with gaming started off with sketching Laser Squad levels on pads of paper, but recently grew into violently shouting "Tango Down!" at random strangers on the street. He now directs that positive energy into his writing (due in no small part to a binding court order).