7Seas: The game factory Date:   Thursday , March 04, 2010 Maruti Shankar is busy building a game factory. His Hyderabad-based game development company, 7Seas Technologies Limited, churns out one game every fortnight. They vary in look, feel, technology, and difficulty level of designing and making. In fact, Shankar’s aim of building a factory that releases intelligent content bears a striking similarity to Ram Gopal Varma’s once cherished dream of setting up a factory that would churn out different and intelligent films. On his part, Shankar, the Managing Director of 7Seas, says, “The game development business is akin to the movie business.” A hit could catapult an unknown actor to the heights of stardom, and pave the way for his forthcoming releases to be readily lapped by distributors as well as audiences. Also, says Shankar, in the game development business, like in movies, a new director and a seasoned pro have equal chances of securing the ‘best release’. For one, the talk of a gaming ‘factory’ appears well founded. “In another 2-3 years, 30-40 new gaming portals will come up in India alone, and they will need a constant supply of content (online games) to survive. Add to that the burgeoning social gaming space, and you have a scenario where the demand for online games will be huge,” says Shankar. He reckons that his gaming ‘factory’, 7Seas Technologies, will be able to cater to a significant part of that demand. 7Seas was started in November 2005, and after three years of its incorporation it is the first independent game development company in the country having an ISO: 9001-2000 certificate. It has over 270 IP-based online games, seven 3D mobile games, and one PC-based game in the market, with many more in the development and testing phases. As is evident from the numbers, the thrust area for 7Seas Technologies is online gaming. But interestingly, the company started operations with a PC-based casual game, the only one in the category that it has in the market thus far. Sudoku of Game Development “We started off with a conscious policy of not doing any outsourced projects. The brief was simple: from concept to testing, we’d take complete charge and develop IP-based games,” says Shankar, reminiscing the day when he started his company. Eight months from that day (November 18, 2005), 7Seas launched its first game, a PC-based casual game modeled on sudoku. “In the initial stage, we wanted to prove ourselves. And the only way to do it was to build a PC-based game and release it internationally through a leading distribution company,” recalls Shankar. The logic being that once a leading distributor accepted it, other independent portals would, owing to the precedent, take the game on board. A distribution tie-up would enhance 7Seas’ acceptability. The strategy worked, and the sudoku game was picked up by the distribution company Trymedia Inc, and has seen numerous downloads on portals across the world since. In addition, the game was top-rated in the SuDoKu Puzzle category by Terragame.com and received 4 Star and 5 Star ratings from Gamextazy and Windows market place respectively. A major reason as to why 7Seas began operations with a PC-based casual game was economics. “We had to get the company on its feet,” recalls Shankar. Had he focused on building online games upfront, it would’ve taken two years, a marketing blitz, and running to hundreds of different portals to attain a fair degree of sustainability, while being an unheard of company. On the other hand, the PC-based sudoku game helped the company attain a 30-40 percent higher margin. A tie-up with a leading distribution company (Trymedia Inc) enhanced the value of 7Seas and eliminated the need to go to hundreds of different portals to sell the game. Almost instantaneously, 7Seas was not an unheard of company any more. “The fact that the game was accepted by Trymedia, after a few modifications, gave us a lot of confidence as a company,” says Shankar. Slowly, 7Seas’ sudoku started appearing on many portals and gave the company the chance to come up with some subsequent releases with add-on features and tweakings. Apart from Trymedia Network, 7Seas was able to distribute the puzzle game to other portals worldwide. PC Games to Online Games Given 7Seas’ foray into the gaming world with a PC-based game and its subsequent deep focus on the online gaming space, the question as to why the company did not stick to the former becomes imperative; especially in view of the reasons Shankar enlists for beginning the business with a PC-based game. “True that the PC-based sudoku game helped us establish the company and gain credibility,” reasons Shankar, “but the PC-based casual gaming space is characterized by very high competition.” Also, it requires much higher investment. Whereas it costs $10,000-20,000 to build a single player online game and $25,000-50,000 for a multiplayer game, it costs $100,000-200,000 to build a PC-based casual game. “In the long run, online games help a company make money,” says Shankar. There are more than 1,000 gaming portals, he reasons, and if a game is sold to a 100 of them, it is enough to recover costs and pump in the excess money into developing more games. Online games give access to a far larger audience, compared to PC-based games. This is because most gaming portals offer free access to customers; and anything that’s offered free reaches a far greater number of people than a paid product. Interestingly, even when 7Seas’ games are played free-of-cost on a third-party portal, it ensures the game developer a steady stream of revenue. This is owing to in-game advertisements; the game developer, in this case 7Seas, gets a share of the returns from in-game advertisements every time its game is played on a third-party portal. So, even though entering the market with a PC-based game made sense, shift to the online gaming space was inevitable. However, it’s not that 7Seas has abandoned the PC-based casual game space altogether. The team that built the sudoku game is now busy testing Kraze – a 3D PC multi-genre racing game focused on the Asian as well as the world markets. Kraze is due to be released next year; the release date was incidentally pushed back on account of rampant piracy. The company wants to release the game in many countries, and follow an online distribution model, like the company did in the case of the sudoku game, to offset piracy and also follow retail distribution. Online distribution for a PC-based game makes sense, since it does not involve a huge marketing cost, says Shankar. A game development company needs to approach a distributor. If the distributor accepts the game, it straightaway means that the game will make its way to 200 odd portals that a leading distributor in the market has links with. Also, it gives local, smaller portals confidence to buy the game, and that takes the sales figure much higher. Compared to that, if the PC-based casual game were to be sold in CDs and DVDs, only a far less number of units will be sold, reckons 7Seas’ managing director. Mobile Gaming 7Seas has also forayed into the mobile gaming space. Apart from mobile versions of its successful PC and online games, the company also focuses on building celebrity-based games for the mobile platform. For instance, it has a licensing deal with the Bollywood celebrity Neetu Chandra, under which the company has created a game called ‘Neetu - The Alien Killer’. The pull of such celebrity-endorsed games is evident. For instance, the U.K.-based Mobile Entertainment Distribution (MED), while announcing its distribution tie-up with 7Seas for the latter’s mobile games, made special mention of ‘Neetu - The Alien Killer’. “We’ve watched 7Seas before from afar with interest; now, as the U.K.’s Bollywood fans are keen to hear about the company’s licensing deals with stars such as Neetu Chandra whose game, ‘Neetu - The Alien Killer’ is included in the new distribution deal, we are only happy to have a tie-up with the company” MED says. Other games that were part of the deal included 3D Sudoku, Planets of Sudoku 3D, Great Elude, Treasure Trove 3D, Derby 3D, and Kraze, most of which are multilingual and are available in English, French, Dutch, Italian, Spanish, and German, for that’s the way to reach a far larger audience. All of 7Seas’ mobile games are 3D, and it’s with a reason. “We want to reach minimum number of handsets, but the ones that offer the maximum revenue,” says Shankar. Constantly changing technology and the practice of upgrading handsets help the company sell more games in this space. “It’s good to have competition within the company,” says Shankar, referring to the online, mobile, and PC-based gaming modules. 7Seas has, over the last three years, roped in separate teams of techies and graphic artists to work on flash-based online games and 3D mobile games. These teams now compete among themselves. These games are also distributed worldwide through companies like IMImobile, IndiaGames, Thumbstar Games, Softgames, Nokia software market, and so on. Trends and Game Design When 7Seas launched its operations, sudoku was just making its way into public imagination. There were already a host of sudoku games available, “But we added an alphabet component into the game,” says Shankar. Whereas a conventional sudoku uses the numbers 1-9, 7Seas’ sudoku game uses numbers 1-9 and letters A-I. Also, the game has a 3D background, with features like floating blocks. That, in essence, forms the basic principle 7Seas builds games on. A game must be based on prevalent trends, says Shankar; yet it must be different from others. It must be rich in graphics and visual effects. In addition, the setting and environment of the game must pertain to the target market. For instance, in a game meant for global markets, the sets must resemble New York City and not Hyderabad. As a result, in 7Seas, artists and game writers play a very important role. They decide on the storyline and ‘freeze the artwork’ and give it to techies to build on. As a result, artists and writers must have a Western mindset, and design the games accordingly. Also, in keeping with the company’s onus on design and trends, a team keeps constant watch on new games, sets, and environments. “Gaming is not a one-time job,” says Shankar. “A creative mindset and constant addition of new features based on the trends is a must,” he says. 7Seas is now focusing on building what Shankar calls “Indian traditional games”. Characters in such games are adorned in saris, bindis, and jewellery rather than skirts and T-shirts. It’s a conscious decision, given the fact that the female audience for casual gaming is increasing, as is the proportion of users in the 35-plus age group. Also, such games are a hit in the Western markets, and accordingly are available in different languages across many portals. Acquisitions and Road Ahead 7Seas Technologies recently acquired Neodelight, the gaming division of Germany-based Neokolar GBR, to complement its growing online gaming business. Neodelight has more than 33 IPs and five game engine technologies. “We acquired Neodelight to add value to the development of 7Seas’ online gaming space. We took the gaming technology engines of Neodelight, which will help us reduce 50 percent of our game development time and bring down costs significantly,” says Shankar. Going ahead, online and mobile games will be 7Seas Technologies’ focus areas in India, since the penetration of broadband and PC is increasing. Also, with India having the second largest mobile subscriber base in the world, the company expects that these two will be the major segments in Indian gaming. However, an impediment to the growth of gaming has been the lack of awareness, despite the growth of infrastructure. Even now, opines Shankar, awareness about games is quite low. But given Nasscom and government initiatives, things are currently looking up, 7seas itself has a strong online presence through its own IP-owned gaming portal www.onlinerealgames.com. The site was awarded the Game Site Standard of Excellence by Web Marketing Association, U.S.A., for 2007, adjudged the Best Game Website 2008 by the that Association, and selected the Best Online Site by Stevie International Business Awards. The gaming portal, which has nearly 2 million registered subscribers, has seven Indian multi-language games and four international language games. It also has more than 50 games targeted towards women. 7Seas’ successes notwithstanding, Shankar rues the mindset of Indian techies. “For gaming, good programmers is the need of the hour,” he says, adding that developers are generally not passionate about working in the gaming industry and don’t think of it as a long-term career option. This accounts for the fact that familiarity with gaming engines is very less; and it requires around a year to familiarize techies with gaming technologies and bring their performance at par with required standards. To offset this problem, at least in part, 7Seas is looking at acquiring some more companies that match its technologies. Such acquisitions will help not only in terms of getting new platforms, but they also help in getting teams that are conversant with the platforms. Incidentally, 7Seas has a 100 percent subsidiary in the U.S.A., fortune7Inc, for publishing and distributing various products, and is planning to set up subsidiaries in few other countries as well. While the detractors may write off 7Seas, dismissing it as a part player, the coming year is set to correct some of the misconception. A lot of what has been happening behind the scenes, in terms of game development and testing for PCs, consoles, and mobile phones will come into the light. A slew of games for mobiles and PCs will be released. And if 7Seas’ precedent in the online gaming space is anything to go by, the stage looks set for some big successes. After all, recently, 7Seas’ product Mouze Maze was awarded the Best Online Game by the FICCI FRAMES 2008 BAF Award. It is only obvious that Shankar’s gaming factory isplaying the game well and is here to stay. 2008: The Milestones The company more than doubled its revenues. Its user base expanded www.onlinerealgames.com. Launched new unique mobile entertainment and social networking portal www.mobizill.com for mobile users Acquired German online gaming portal Neodelight with 33 IP and game engines The Strategy Focus on developing online casual Indian tradition Games and Mobile 3D Games Expanding internationally. Localizing online and mobile games for several countries Looking for partners, portals, distributors and affiliates In-Game Advertising and Game Licensing Model apart from online advertising to be followed.