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The European Stage

Koch Media is a company with growing ambitions, and we speak to the boss to find out what they are.

Koch Media has for a long time been known better as a distributor of a number of European game titles, generally catering to a slightly niche audience, and only more recently linking with bigger partners such as Namco Bandai and Sony Online Entertainment.

But in August the company announced the acquisition of Rockstar Vienna, a studio used to producing world-beaters - a move that signalled a change in direction for Koch. We spoke to Dr Klemens Kundratitz, managing director of Koch Media, to find out where that direction would lead.

How do you see Koch Media's position at the moment?

Koch Media is a games publisher, games distributor, and a consumer software distributor. We're a European player, headquartered in Munich, Germany, with content and distribution covering the major territories in Europe including the UK, France, Italy and the three German-speaking markets.

We are independent, a private company, we employ around 300 people, so we're in a space between the few global players, and the local players - we're right in the middle.

You recently announced the acquisition of a studio in Vienna - how does that signify your ambitions?

Until now, Deep Silver, which is our games label, has been a pure publishing label where we released products from external studios as well as core publishing sources. And, after existing for five years, we're now adding a third leg to our strategy which is internal production.

It's certainly a very important step strategically for us, and shows our full commitment to triple A globally saleable IP, and it shows the way for the whole company too. More will follow.

Why is the time right to make that change now?

Well, we're in a time of change, we can see how interactive entertainment is embraced by a much bigger mainstream audience, and we can also see the two Nintendo platforms as a great opportunity for further growth - not just for global players, but also for European players as we are.

How much further do you think the Nintendo platforms can reach?

Once the doors are open, I think we don't need to worry too much about the next generation platforms. The key thing which has happened over the last 12 months is that we have added to our core gamer audience a new what we call a family audience.

Once these people have been exposed to interactive entertainment, as long as we keep up the momentum of creative software and attractive consoles, I don't think they're going to go away.

There seems to be a tendency to think of Europe as a single territory - what actually are the challenges associated with working in Europe?

You have to be extremely local in your thinking and I think experience shows that companies who are not rooted in Europe find it hard to gain a market-leading position in the key European markets.

That's because the rules are so different in each territory, and the mentality and culture, and the way that you approach publishing is so different, that I think Europe is a minefield for people that aren't European, and I think that will remain the same in the future.

Does that give you a competitve edge in Europe?

Absolutely. I think if you compare us to other companies that work on an international basis, we can offer a great and unique service. We are the only truly European independent publisher and distributor, which can offer not only a strong distribution force in one territory, but can really offer the true European package.

Our partnerships with companies like Namco Bandai or Sony Online Entertainment are testimony to our strength and depth in that area.

So what will the new studio be working on?

Games That Matter is run by the top management of what was formerly Rockstar Vienna, which is famous for its console versions of Grand Theft Auto 3, Vice City, Max Payne and Manhunt, so I think it's pretty clear the kinds of games that their core competencies are in, and we'll build on those competencies.

We believe that when we get involved in triple A productions, it's paramount that we have internal know-how, expertise and infrastructure to not only produce external studios, but also to be in the middle of the project, and to steer it, to be creatively involved and so on.

It's a way of managing the associated risk to have them on board. Not only are we ambitious to create products for multi-platform next-gen, but also we create our own IP and we do it with the internal studio.

It's pretty expensive though?

Hence the need for publishers like us to review and extend our development strategy which was until now based on external studios only.

We've seen broadband penetration increase dramatically in the past five years, what do you think the future of multiplayer gaming will bring?

I think we are only at the beginning of the multiplayer era. The success that we see of one game is not what will be at the heart of online gaming - I think the MMO sector will develop, but it will only be part of the scene.

The second part that will develop in my mind will be more casual MMOs, where you will still get involved in avatars and building skills and being part of a community, but in a more casual way.

The third part of online gaming I think will be browser-based games. And as far as offline games with online components are concerned, I think they will also play an important part and continue to grow.

There will be certain types of games in the future that you will expect to have online components, for example racing games - without an online component I think in the future they won't have any hope.

Manhunt 2 was recently banned in the UK, and that's prompted a lot of reaction. How do you see the situation in Germany?

I can tell you we have arduous discussions in the publishers' association about this topic, and I think that as an industry we need to respect the cultural environments that we find ourselves in - and that environment is different in each country.

I don't believe the standards that are being applied in the UK - qualitative or quantitative, and I mean I'm talking about violence against bare skin, language - all these things are weighted differently in different countries, and I think that needs to be recognised when we talk about age ratings.

Secondly, as a community of publishers, we have to be more responsible. So it cannot be that we create games which include violence for the sake of violence, and make it available to the general mainstream public.

I would point to the film industry, where yes - there are definitely also some very specific films being produced, but they're not made available to the mainstream public. And we need to not just fight against the critics, but work with them and act responsibly.

I'm not advocating not making violent games, but I'm saying implement the right systems so that only adults can play and have access to them.

What are your thoughts on whether or not videogames should be classified as cultural, and therefore whether developers should receive state aids?

The definition of what is cultural and what isn't is not one I want to get involved with - I would say that it's entertainment that we are offering.

But how do I see subsidies? I don't believe in sponsorship, public funding and subsidies at all, because I think that those systems will lead to games being produced for reasons that are not what the consumer demands, but because people think they should be for cultural reasons.

It takes the attention away from what the customer wants, and if we create great entertainment then the customer will buy it and I'd rather not have everybody focused on how to get subsidies from various places.

Certainly it's very concerning to us when you see that big publishers put their development resources into Canada, and that Europe is being disadvantaged as a place for development in general - that concerns me, but I don't think the answer is that we should lobby in each individual company for subsidies.

Dr Klemens Kundratitz is the managing director of Koch Media. Interview by Phil Elliott.