Last week Slitherine and Matrix Games announced a merger, with the two strategy and war games specialists coming together to reach a wider global audience and further expand across a variety of digital platforms.
In this interview with GamesIndustry.biz, Slitherine chairman JD McNeil talks through the logistics of the deal, why digital offers more advantages over traditional retail, and why the second hand market blocks growth opportunities for smaller publishers.
Q: Can you detail the initial thinking behind merging the two companies?
JD McNeil: We have worked together for several years, growing closer in cooperation as the years went by. It was apparent to both sides from an early stage in our relationship that whist we attract the same target audience we tend to do this using a different approach, for example Slitherine’s move to digital solutions for various console platforms. More importantly Slitherine’s core audience is European whilst Matrix has been more US centric. Increasingly we have been coordinating release dates and there are a number of other steps that we felt would benefit our audiences, such as common installers, patches, upgrades etcetera Not to mention savings in administration and external costs.
We also enjoy working together and as a team that really helps. Going forwards the merger will give us a huge increase in our band width, so you can expect to hear and see more activity in a number of spheres from the new combined group.
Q: How does the merger change the logistics of the companies – will staffing levels remain the same, are there any plans to move staff or open or close offices?
JD McNeil: Logistics will change but this will all be 'below the hood' and we have a number of plans to improve and expand our services to our core audiences, and our big push will be to expand our activities to attract a wider audience. The names of the companies will remain as is now and they will both retain their own identities. Staffing levels will not change, but by sharing tasks between both companies we will save the need, for the time being at least, to recruit. Similarly, there will be no need to relocate staff. We continue to enjoy the best aspects of modern working practices which allow us to employ the best staff we can, irrespective of where they are located around the globe.
Q: Digital business opportunities are very important to the two companies – what opportunities do you see over the next 12-24 months?
JD McNeil: We will continue to reinforce and exploit the success of Matrix in the PC market, whilst Slitherine’s experience in bringing products to various consoles by way of digital distribution will continue to grow. At present Slitherine has several releases in advance stages on Xbox 360, PlayStation 3, Mac, iPhone, iPad, PSPgo, DSi ware, Wii ware and Xbox Live Arcade. These are either in submission or final stages of development. Our recent release Ice road Truckers on iPhone and PSPgo is an example of this and Sony inform us that this has been one of the best performing titles on the PSN store. This is a major growth area for the group and is one of the shared goals that brought us together.
Q: Does the company still intend to use traditional retail channels and do you expect that to continue to be less important to the business?
JD McNeil: We do intend to continue with retail releases and even expand this. However the challenges at retail in bringing niche products to the market have become increasingly difficult. Our titles can be slow burners that go on for years. The back catalogue for both companies is extremely important in this respect, but it’s not a model that works well at retail. The focus there - in our view misguided - is to combine Triple-A with pre-owned. Giving over the pre-owned space to smaller publishers would freshen and grow the market. Recycling second hand product has been and is a self-fulfilling prophecy which is driving smaller publishers away from retail and is just a further nail in their coffin.
Q: What are the big challenges now for merging the two businesses?
JD McNeil: We need to successfully consolidate operations and working practices and allow this to bed in whilst simultaneously sticking to our very aggressive release schedule. For sure we will experience growing pains but the combined team has strength in depth and the energy to pursue our goals. One of the great strengths of both companies has been that private ownership has allowed us to respond very quickly to the market and this will continue.
Q: How do you intend to grow the business through digital markets and do you expect the PC to remain the dominant format for your titles?
JD McNeil: I partially addressed this earlier; PC is and will remain very important to us. Our existing level of sales from both companies is testament to this. However, we see the new platforms as huge opportunities and we will be announcing further releases on these platforms very shortly. With a number of the products we currently have in the pipeline, we will be working with our development partners to see how we can assist them to mould their current practices and allow us to bring some real strategy games to these new and exciting platforms. We know the audience is out there and it’s our intention to meet that need.
Q: The strategy genre is the one PC genre that hasn't made a significant transition to consoles – do you think the move to consoles would be possible via digital business models, or will the consoles always remain a smaller market for strategy titles?
JD McNeil: We pretty strongly disagree with this suggestion, as I think you can glean from the previous answers. The beauty of doing business in the digital world on these platforms, is that we don’t have to fight for shelf space and limited buy-in's at retail. In that world we get scant exposure and unless you get pretty lucky retail sales will reflect this. The other big strategy decision here is that in the main we only list our own releases and we do not sell these through aggregators. You can only get our products from us. Our audiences are increasingly aware of this and they know where to come for the type of games we have in our portfolio. Sure, we have more work to do to spread the word, but we are up for that challenge.
JD McNeil is chairman of Slitherine. Interview by Matt Martin.