Zapak: Taking casual games seriously!
Date: Wednesday , December 03, 2008
Believe it or not! A large number of women who for long had been glued to the daily soaps; especially the ‘Saas-bahu’ sagas have turned towards gaming as the new form of entertainment. Online gaming is the new passion that has hooked the young and old alike, thanks to Zapak, which has revolutionized the Indian gaming market. With over 750 games in its kitty, about six million registered users, over 100 million page views a month and nearly 250 advertisers, Zapak, an Anil Dhirubhai Ambani Group (ADAG) company, is India’s largest online casual gaming portal. From content to technology to distribution to merchandize, it has set up a value chain providing end-to-end gaming, a feat none of the gaming portals in the world has managed to achieve till date. With this value chain as the backbone, the company has not only accelerated the gaming trend in the country but also with the Indian online gaming industry estimated to reach $200 million by 2010; the company is sitting on a potential goldmine.
Online gaming is a late entrant in India unlike the U.S., China or Korea, where online gaming has existed since past 5 to 8 years, but the number of gamers here are now on an upward spiral. The participation of 11,000 gamers in last year’s Gamebox National Championship is a testament of the craze and following that Zapak has created with in a year of its launch.
Building the numer uno Brand
Launched on 26 Nov 2006 with an aim to explore the gaming opportunity in India has grown by leaps and bounds in quite a short period and the key to this success has been its first move advantage. Unlike social networking giants such as Orkut and Facebook, who saw a potential for social networking India, U.S. online gaming majors like Miniclip and Bigfish did not visualize much market for gaming here. The low numbers of PC and Internet penetration in India did not excite them. However, that did not deter Zapak from seeing the vision.
“Zapak was launched with a clear vision of creating a market for online PC games and making it a prominent digital entertainment in India. The driving factor for this was the market for such games that we saw in China and Korea, where gaming is the stickiest form of digital entertainment. Fore seeing the growth in PC and broadband penetration in India, we decided to explore market and started Zapak with an initial investment of about $50 million,” says Rohit Sharma, COO, Zapak Digital Entertainment.
With 54 percent of the population below 25 years of age, success for Zapak has been instantaneous. The team’s strategy was simple: establish itself as a leader in gaming by building an online gaming platform and not the games. It might come as a surprise that none in Zapak’s core team actually has an experience in game development. On the contrary, they themselves come from a dotcom background, which perhaps is a definite plus. The team built each and every entity of Zapak from the scratch, be it the technology, the environment or the content. The dotcom experience also helped the team realized that it was not attracting the customers, but retaining them, would be Zapak’s greatest challenge. Hence, after huge number of man-hours spent on intense market research, observing the gaming patterns across the world and analyzing the psyche of the Indian gaming audience, the team cracked down the content strategy.
It was observed that Indian audience was as discerning to the quality of content as was the global audience and it became imperative for the company to rope in leading game publishers but roll out India specific games. Till date 95 percent of the company’s content comes from studios outside the country. Some of the studios are Mouse Breaker and Media Tonic. The team also deduced creating ‘stickiness’ was vital in order to make a user return to the portal and play. The solution, kept the games simple.
From getting the right content in terms of genre and quality to building a robust technology around it to adding community features like ‘avatars’ - personalization of characters, leader boards, badges and medals, has helped the company build a strong loyalty program and get the right game play. This has been ably supported by large investments made in aggressively marketing the brand, a step no other player in the market had taken so far. Instead of launching a prototype and then building on its success, Zapak decided to take the ‘Big Bang’ approach. From TV, radio, newspapers, hoardings to Internet, the company made sure that the brand was everywhere and generated enough buzz in the market, especially among the youth. The result is that today, Zapak is not only India’s premium gaming brand but also one of the top five gaming portals in the world.
The company now, not only boasts of a return traffic of about 70 percent every four weeks, but also successful partnerships across all the global partners and the numbers are only increasing. The success of the brand has also prompted it to start development of content in small scale and the company has put together small development team of 7-8 people. The core team of 250 people is now more than ever engaged in getting the best of the lot content, searching for good partners and closing deals to constantly improvise the portal’s quality and offering.
Creating a Value Chain
The success of Zapak has opened up the market for online gaming in the country, drawing multiple players like bees to the nectar. In order to retain its steady foothold in this competitive market, the company has believed in building a strong value chain by providing end-to-end gaming experience for the users. Having already cracked down the casual gaming market, Zapak’s next move has been to launch massive multiplayer online games (MMOGs), hardcore games that allow one to play and compete with other online gamers. Recently, it acquired the exclusive license from Shanda, a leading Chinese online gaming portal, for operating ‘Crazy Kart’, a MMOG, in India. One of the most successful casual games in China, Crazy Kart had been under closed-beta testing and will be launched by end of this year. With this game, the company is sure of setting the gaming scene in India ablaze, just the way it did two years ago in casual gaming. Zapak has already gone into talks with top game developers and publishers worldwide to add 4-5 leading titles to its MMOG category over next one year.
But a great challenge in the popularization of MMOGs in India is the low Internet bandwidth in most homes. Also such games require systems that can allow the gamer to enjoy every aspect of the game such as graphics, sound quality and speed, a feat not feasible by home PCs. “Shared access is going to be the key behind growth of MMOG. With this concept, we have launched Zapak Gameplex, first of its kind large format gaming cafés with best of the network and PCs that would allow gamers to enjoy the games to the hilt. When we launch the MMOGs, players need to have the right facility to play them in,” says Sharma. The company has already launched 51 Gameplexes across the country and plans to increase the number to 200 by March next year. The idea behind the Gameplex was adopted from the China and Korea where in spite of 80 percent of households having broadband connectivity, bout 40-50 percent of the revenue comes from gaming cafés.
The concept of Gameplex has really caught fire and has become an important place for the gamers to congregate and play. On an average a gamer spends about 8-10 hours a week and Rs. 1500 a month at a Gameplex. To keep the gamers engaged on a long-term basis, evangelize and promote gaming in a big way Zapak has launched different programs. With Zapak Live, the company holds constant large and small-scale competitions across the country and rewards gamers at different levels. Recently it conducted the second addition of Zapak India Gaming Summit, in association with Intel, in Mumbai. It has also announced the launch of country’s biggest gaming tournament—Cadbury Perk Zapak Gameplex Premiere League. The mega tournament that will be activated in 35 Zapak Gameplexes in major cities will not only showcase world's most popular games like Counter Strike, FIFA 08 and Crazy Kart but will also rank and felicitate India's top 100 gamers in these games.
The company has set up a large distribution network via Zapak Games. In association with leading retailers such as Future Group, Landmark and Lifestyle, the company offers game cards, CDs and a lot of jazzy Zapak merchandize in over 4000 leading retail outlets across 80 cities with, providing adhoc revenue of 20-30 percent to the company.
With so many facets to its gaming business, Zapak has managed to create a value chain for not only its customers but also for itself. This value chain is a uniqueness that sets Zapak apart from other gaming brands across the world. “If one looks other companies, a gaming company will have an online portal but not cafés and another might have a string of cafés but not own the content part. One may just have a merchandize line. No company in the world has caught all the aspects of gaming. We are the only ones offering end to end gaming experience for the gamers,” claims Sharma.
‘Advertisement’ is the name of the game
Not only has Zapak created a brand and gaming culture, it has also developed a monetization strategy. Though games, licenses, gameplex and merchandize bring steady revenue to the company, the major crux is scored by the advertisements. Currently, about 250 brands advertise with Zapak in India, so do not be surprised if you come across ads and promos in between a game.
Just as it believes in adding value to the customers, the company also strives to add value to the advertisers associated with them. Zapak offers a separate segment to the advertisers where they can advertise their brand either by in-game ad or an advergame.
When an advertiser opts for in-game advertising, his product is placed with in the game played and branded. For example, if one is playing online cricket, then Airtel banners are placed around the virtual field or if one hits a boundary, a message, ‘Kuch meetha ho jaaye with Cadburys’, is displayed. Advergame is a concept completely pioneered by the company where in if the advertiser gives the content/product, the company builds a game around it.
Brands such as Marico, Cadbury’s, Airtel, Ponds, Maybelline, P&G, LIC, Castrol and Parle G have constantly associated with Zapak for either in-game advertising or advergames. The company has proved to its clients that this the best way of brand messaging and the most effective way to engage a customer with a brand for long periods. Hartwin Feddersen, Director-Marketing, adidas India says, “We worked closely with Zapak on adidas Megabounce+ Challenge. Zapak seems to be cued in to the gamers psyche and converts this understanding into solutions which meet our brand marketing objectives.”
Amlan Mukerjee, Senior Brand Manager, Ponds, says, "The innovation in Zapak site around the concept Blush, during Pond's White Beauty launch campaign was one of its kind. While every brand is trying to break clutter in the mind of the consumers, and gaming is in thing for young TG, this was a fantastic example of meeting the objective of both brand and the service provider keeping consumers at the centre-stage."
With these two approaches Zapak has revolutionized the online advertising space. “Even in these times when other portals are facing a reduction in online advertising, our clients continue to do more and more work with us,” Sharma explains. As the pioneers of in-game ads and advergames, Zapak now plans take this concept at the global level too. Though a new concept at the global level too, advergames will work in casual gaming alone, says Sharma. This is because MMOGs are not advertisement driven but rather subscription driven.
Having fuelled the gaming trend in India and witnessing the tremendous success and growth here, Zapak is getting ready to stir the world of casual gaming at the global level with the launch of zapakworld.com. Available in 7 languages, it is an aggregation model of 12000 games for the global audience. The company initially plans to launch the gaming site in Pakistan, Brazil and Russia.
“We believe that the Internet or a gaming brand meant for global audience has to be neutral. Hence, we did not go for a global expansion with Zapak.com as the content is very India specific, especially the advertisements,” says Sharma.
But is the company confident of witnessing the same success as it did in home grounds? Studying the international scenario has helped the marketing team discover some startling facts that have helped it take such a decision. While the majority of the gaming population in India is male with in the age group of 25, in the U.S the majority of the audience is female above the age of 35 years. Of the different genres of online games—single and multiplayer games, flash based games or downloadable games; the latter work well in Russia and some parts of the U.S. Every country has a different audience, business and revenue model.
The team has visited different regions and identified partners who in turn helped with market inputs and strategy. For example, in India since there are no MMOG players Zapak sees a great opportunity of next level of growth here. Similarly, in Russia there are large number players in the MMOG space but none in casual gaming. As a result the company has been able to set a business model in place for each of the region.
Though Zapak has followed the gaming strategies in the eastern countries like China and Korea, Sharma accepts that it does not wish to penetrate the market there, as it is highly competitive. But what the company does plan in future is acquiring a studio or setting up a development capability to support its global quest.
The India impact
In a very short period of time, Zapak has brought India into the global gaming scenario from nowhere. Sharma believes that gaming is not culturally or geographically bound and there is no reason the steadily increasing Indian gaming market cannot compete with that in China or the U.S. As long as one understands the market need and gives quality content, one will see traction, and that is what Zapak has done in India. Today, it is easily being compared to the gaming giant Miniclip. “Miniclip may have three times more number of users but in terms of quality we stand same,” says Sharma. In a country where not many can afford to have the console video games such as the X-Box or the Playstation, Zapak has created a cult following for online games. Zapakgirls.com, which was launched targeting the growing segment of female gamers today gets about 10 million page views per month and has seen 2,00,000 visitors, making it the largest Internet destination in India for women.
Now busy with plans to rollout MMOGs in India, Sharma and his team aim at taking gaming business to new heights in the coming years. In the next two years, the company hopes to increase its user base to 15 million, number of gamplexes to about 3000 and create the biggest distribution network in and outside the country. Seems like a daunting task. However, looking at what Zapak has achieved in the past two years, it is just a matter of time before it reaches there.