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Taiwanese giant Gamania steps into Europe with a long-term growth plan

Gamania is the biggest online games business you've never heard of. The Taiwanese company was established in 1995, but it hit its stride in 2000 when it expanded into Korea. Over the next 11 years it's growth continued at a rapid pace - to Japan, China and Hong Kong, and now Europe and North America. It floated on the Taiwanese stock exchange, established mobile phone payments for its games, acquired local online game developers, and secured licenses for hit titles like Lineage, Kart Rider and Maple Story.

It also began developing its own titles in-house and moved into media production. It has its own platform, Beanfun, which allows users to socialise, share and buy games - games that are bought using its own payment system, Gash, which is used by 6.5 million people in Asia. It has its own e-sports team, the Gama Bears, runs the Cheer Up Foundation charity, has built its own development team, Red Gate, and two supporting R&D subsidiaries, along with a player feedback and behaviour monitoring centre.

In short, it's a self-contained development and publishing media powerhouse. But outside of Asia Gamania is only really known for the cartoon Hero: 108, a favourite on the Cartoon Network, which spawned an MMO that was quickly shelved.

We look at it as a start-up in each territory even though the company is very big in Asia

William Chen, Gamania

But in In Taipei City where the company has its headquarters, Gamania invited a handful of European reporters - and hundreds of Asian press - to cover a selection of forthcoming games as it looks to start again in the West. The initial batch of games have baffling titles that will mean little to a Western audience - Langrisser Schwarz, Core Blaze, Tiara Concerto, Dream Drops and Warrior of Dragon - but every effort was made to impress, with a lavish press conference complete with fireworks and dancing girls, two days of booth tours, showgirls and nights out with extended hospitality.

It was the type of event Western publishers would have held during the last generation of consoles, throwing money around to make a noise and ensure all eyes were focused on their products - before that was replaced with more focused communication and the tightening of belts. This was an event seemingly unaffected by austerity measures, the whole thing running like clockwork to a micro-managed schedule.

With a strong presence in Asia, Gamania is expanding into Europe and the US, which it sees as a crucial growth area for the business. It's been a year since it dipped a toe into Europe and quietly set up base in the Netherlands, with a team of 13 dedicated staff led by COO William Chen. From there it has spread out across Europe, calculatedly pulling the business together.

"We always look at the long term, we want to build a brand so not just launch one or two products and if that doesn't go well we pull back," admits Chen. "We've been to many different territories and we do the best we can until we really make it a success - look at Hong Kong and Japan as perfect examples. It's a three year plan, it's a five year plan, we have all of that in mind. We change and adapt to local markets step by step."

"We look at it as a start-up in each territory even though the company is very big in Asia," he adds. "We can't go too far and under resource ourselves. With 13 people we can do the basic stuff, and launching a game should be no problem. But to be really excellent at everything then obviously there's a lot of work to be done. "

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Core Blaze, built using the Unreal Engine, looks to be the most Westernised title from Gamania so far.

Some games seem destined only for Asia, like the unbearably cute Dream Drops, with its endless grind mechanics and knicker-flashing avatars. Others have a muchbroader appeal, and with the right marketing could draw healthy numbers in Europe. The most compelling is Core Blaze, a four player co-op fighter with a Monster Hunter vibe, a game that benefits as much from the company its played with as any in-game mechanics or gameplay. The fact that it's built with Epic's Unreal Engine could be a selling-point for the game, which is in development at its in-house studio in Taipei.

"Core Blaze will launch in Europe for all different languages," says Chen. "Tiara Concerto or maybe Dream Drops will be very specifically for the French market, Langrisse Schwartz could be another game for the whole European market. Our strategy is to launch in-house titles in Europe but not necessarily in every language, it depends on the genre."

In truth, Gamania's genre variety is rather narrow. Its games are free-to-play MMOs distinguished largely by theme - cute musical pirates, armour clad dragonslayers - and Chen is aware that some titles just won't resonate with Western audiences.

"Dream Drops is very good for Japan, it's getting a very positive impression from the Japanese. The European and US players, there's some reservations there for their markets," admits Chen.

"In the next couple of months, or one or two years time when we go through new development phases we can make changes and be more specific about which territories we go to. Are we going to bring all out titles to Europe? It really depends."

Five years from now Europe will account for 25 per cent of consolidated revenue worldwide

William Chen, Gamania

Gamania is entering Europe at a time when free-to-play and browser games are booming, with companies like Bigpoint, InnoGames and Gala Networks sucking up users in a market originally established by Jagex and Acclaim. Is there room for another player when there are already multiple games to choose from, all free, all riffing on RPG, strategy and MMO themes and gameplay, all screaming for attention?

"For Gamania right now every market, every language is very challenging," acknowledges Chen. "I wouldn't say Germany is the most difficult to crack because it's the largest PC online gaming market, so they understand the marketing, they know what online gaming is all about and we an use that marketing channel. Whereas in English speaking territories it's still very console based so to promote a free-to-play game it's much more challenging to educate the user in the UK, in Nordics, and other parts of Europe. For the French market there's a very big dominant local player so to step into that market you need to right communication. Every market is different."

Chen isn't being naive. His five year plan for Europe and the US is specific - each region will is expected to make up a quarter of sales by 2016.

"We have a rough idea that, five years from now, Europe will account for 25 per cent of consolidated revenue worldwide," he states. "And that's the same for the US, with probably the Asian markets accounting for 50 per cent, and within that 25 per cent will be purely from China. China right now is the largest single online gaming market in the world. That's pretty much the ideal that we have."

Chen uses China as an example of slowly understanding a local market and adapting the business to suit different consumer needs.

"China is a very big market and user behaviour is very different from Taiwan and Hong Kong," he notes. "The Chinese gamer plays very differently, they want to complete a game, they want to level up very quickly, they don't mind the grinding. And while gameplay is very important the community is just as important. The gamer is actually playing to meet and make friends. The gameplay itself is sometimes a bonus to making friends. They like to earn items and sell them on specific websites. These players are actually making money from playing the games," he adds.

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Instead of attending Tokyo Game Show this year, Gamania took over Taipei City with its own private press event.

Learning from China is being applied to Europe, says Chen, who also offers advice to European companies hoping to make a mark in the Chinese market.

"The market is so huge, so for pre-hype and marketing communication you need to start a lot earlier. Sometimes one-and-a-half years before you launch a game you need to start marketing it and by the time you're ready to go commercial you've probably spent around $2 million because it's such a huge territory.

Analysts and investors are pointing to China as the key growth region for European businesses, which Chen acknowledges is true, but it's not just initial costs for which a company needs to prepare to enter the region.

"In major metropolitan areas like Shanghai, Beijing or coastal cities the bandwidth is fine, but if you move further West there's very low bandwidth. So in those terms distribution is also a big challenge."

And legal requirements have publishers jumping through hoops, as a company like Blizzard has discovered with its World of Warcraft updates, but Gamania's experience proves it's not just a problem for Western companies.

"Even though we are a Taiwanese company, going into China we're considered a foreign company. So there's a lot of legal requirements, there's government regulations you have to follow that can really slow you down. We saw it with World of Warcraft - China is always the last place to get any updates. The Government can take six months to review and check everything, and it's very unique to the Chinese market."

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William Chen, chief operating officer of Gamania Europe.

"That's not a Western problem. It's the same for Korean and Taiwanese companies. We might be culturally very close. There are Korean and Japanese companies that want joint ventures with Taiwanese companies to go into the Chinese market - it's getting better - but it's not as easy and you're not on the same level as a local company. You will see in the next three years that Chinese companies in China will become very dominant."

Chen warns that an already difficult market is going to become even harder to reach, as local companies establish themselves with loyal customers by specifically catering to their needs.

"Five years ago there were a lot of foreign companies in China and the top ten games were made outside of China. Now, eight of the top ten are Chinese titles. They have developed games in the way that the Chinese player wants. The Chinese player doesn't need that many quests but they really like player versus player, a lot of items to sell in shops, that's very important to them. And they are sometimes very patriotic with Chinese developers developing very Chinese games, so they are keen to play locally produced games.

As well as establishing the brand and localising the games, according to CEO Albert Liu, Gamania is also eyeing Europe for acquisitions, should the right opportunity come along.

"If the right opportunity comes and we are interested in that particular M&A there's a possibility we could do that. We've done that in Asia," he says. "If the potential company would be happy and we could fit them within our company culture.

"Obviously creativity and the skills to create outstanding products are key to any partner, but also sharing is part of our studio culture, sharing ideas and being on a similar level in terms of passion in creating games."

We've seen trends of the MMO market and the free-to-play models and in Europe they are a few years behind Asia, but that's why we think there is a lot of room to grow

Albert Liu, Gamania

While MMORPGs are the core of what Gamania offers, it intends to use mobile formats as a way of marketing its bigger online products, and there's some talk of entering the console space should format holders adopt free-to-play games more widely. But the majority of efforts are in online free-to-play, and Liu sees Europe's slow adoption of the business as a good opportunity for Gamania as it plans to take the long road to success in Europe.

"We've seen trends of the MMO market and the free-to-play models and in Europe they are a few years behind Asia, but that's why we think there is a lot of room to grow.

"We fully understand that the UK and the European markets are very different to Asia so the big challenge is to really understand what European players like. That's the most important thing right now. And to understand what is good for one territory may not be right for another. It's not one territory, it's a lot of different territories and we must study them completely."

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