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'In India, we want games to be the prime reason why people buy PCs' : Quentin Staes-Polet - Kreeda Games CEO and co-founder

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Quentin Staes-Polet is the CEO and co-founder of Kreeda Games, one of the first Indian internet companies dedicated to massively multiplayer online gaming (MMOG). The company received its first round of funding in March 2007 from US based IDG Ventures and Japan's Softbank.

Kreeda's flagship Bollywood music and dance game Dance Mela (The Carnival of Dance) recently made it to the Changemakers gaming honours and according to Quentin, it managed to do so because it successfully merged fitness and entertainment into a deeply localized game for India.

In an interview with Indiantelevision.com's Arcopol Chaudhuri, Quentin talks about the opportunities, challenges and gives his perspective on the larger gaming industry in India, which is beginning to gradually stand-up on its own feet.

Excerpts:

Your first round of funding took place in March. When is the next round likely to take place?

Well, I cannot share that with you, but it's not anytime soon. We're quite satisfied with the way things are going at the moment. Corporate interest in the gaming business is increasing, not just in India, but globally as well.

The gaming industry in India is still at a nascent stage. How is Kreeda combating alternate entertainment options like TV and cinema in this phase?

Gaming is the TV of the future. And there's online gaming as well. With the bandwidth increasing, we see a lot of interactivity coming in. Although India is still a couple of years away from where we can get healthy bandwidths, we see the combat happening slowly and surely.

What's the current size of the current gaming industry in India?

The Indian gaming market is very very small. Currently it is evaluated at about $5 million. Nobody really knows the exact size and there are various numbers floating around. It is estimated to reach $200 million by 2010.

But frankly, I wouldn't bet on any of the numbers. Because a lot of these numbers are part of revenues paid to companies outside India.

Has the gaming industry woken up to in-game advertising?

We're one of the first few companies to have deployed in-game advertising. I can't tell you which brands are advertising, but the good news is we have the necessary technology to incorporate it into our games.

What are the advantages it offers to advertisers compared to conventional mediums?

In-game advertising is a much better media for advertising than TV because the user involvement is so high and it allows for content integration. It's not interruptive nor is it intrusive. Customization features are high and I can even make it the sole reason why the user is playing it.

What about measurability? How is Dance Mela a valuable proposition for an advertiser?

Indeed, the best part is the measurability it offers. For online and mobile games at least, the advertiser comes to know exactly how many users are interacting with his brand and what demographic do they comprise. Being an immersive medium, it offers much more promise to the advertiser.

There's a notion that a gamer is too immersed in the game to actually notice brands in the background?

Well, I'd beg to differ on that. Ad avoidance is high on TV too. Unless of course, you customize the branding to the gamer. The idea is to create intelligent clickable opportunities for the advertiser. For example, I create a shop inside my game where the user can buy branded accessories which helps him improvise his gameplay.

What revenue model is likely to work in a market like India?

For us, I think subscription model is a little early in India. A game where there is no entry level fee, can be monetized at whatever the gamer is willing to give - his disposable income, in this case.

What offerings has Kreeda lined up, post Dance Mela?

We are looking to release 3-4 games a year. Dance Mela will be our flagship product for the next few months. The strategy is to pick up successful games from abroad and localize them for India. We'll be looking at sports games, adventure games and games which are easily adaptable to Indian cultural milieu.

How challenging was it to localize Dance Mela?

Bollywood and dance are two themes that are very strong in India. This helped us get in new gamers, especially females. Dance is a strong theme - we couldn't have had Korean dancing, Chinese - dance has its own identity and Dance Mela is, therefore, the most localized game in this world. It is the deepest example of localization in any country. We devoted about eight months putting into place the characters, dance steps, clothes, sets and music for Dance Mela.

So is that what your strategy going to be from now on? Licensing them from abroad or developing games in-house?

Actually a high-end game takes about two years to launch. But we licensed the game from China and then localized it for India, fine tuning several aspects of the game for the Indian gaming audience. It's easier and more sensible to do this, for a market like India and the returns involved.

Why aren't you developing games in-house?

As long as the gaming market crystallizes in India, we don't see developing games ourselves. The costs are anything between $3 million-$15 million, which makes no sense in a market that is emerging. As the market matures, we would look at developing our own games. India is a unique market and there is vast potential for developing games specifically targeted towards Indian gamers. We will do it eventually, but only when the market justifies the cost and effort involved.

'Our strategy is to pick up successful games from abroad and localize them for India'
How much are existing international gaming majors like EA a challenge to your business in India?

The gaming majors are not a challenge at all. They cater to a hardcore gaming audience - people whom we at Kreeda are not after. Of course, we would love it if they played Dance mela as well, but then to be a successful gaming company in India, you need to think 100 times that number. You compare that to the projected $200 million and you think it's not going to happen.

Look at China - the country jumped from zero to $1.5 billion in a period of seven years. In 1999-2000, China was no different than India in terms of internet connectivity and PC penetration, amongst other things.

So what according to you is going to be a compelling reason for people to take up gaming?

In US and China, the reason for PC penetration has been the perks it offers in the form of broadband connectivity, softwares and games. In India, as a gaming company, we want games to be the prime reason why people buy PCs. Gaming should be the driver of PC penetration in India.

What's the audience strategy for Kreeda right now - converting existing gaming population to Dance Mela or wooing a fresh audience base?

We would be looking to convert them of course, but that's not an audience we'll be banking on in the long term. Currently there is a gaming population of 50,000 to 60,000 in India today, we look to expanding that to 2-4 million in the next few years.

Which genre is going to be the catalyst for growth in this sector - mobile, console, PC, online gaming?

Well, I think its going to be across genres. Console gaming will offer premium experience and will contribute a larger share to the gaming revenue. Meanwhile, mobile gaming already has the advantage of a huge user base which is waiting to be aggressively tapped once connectivity issues are resolved. But the PC and online gaming scene is most promising since penetration in both broadband and PCs is showing rapid growth.

How much have perceptions towards gaming been a challenge in India? Violent actions packed games are a strict no-no, if academic opinion is to be believed?

Perceptions, of course, matter but as of now that's not a cause for concern for us, since Dance Mela is not a violent game. There is moderation involved and we make sure that there is no abuse in any form. For the gaming industry right now, there are many more issues much more than perception that are worrying.

What are these issues?

Distribution, PC penetration, marketing channels. There is still no entity yet, that takes care of the distribution requirements of the entire country.

And how is Kreeda addressing these issues?

We're tying up with retailers who are embracing box-game distribution for the first time. We are setting up our own sales force who visit internet cafes and take our games over there.

What hurdles are you facing while you do this?

The biggest hurdle we are facing is that the retail scene in India is undergoing a huge churn in terms of nature of operations, infrastructure and monies involved. It's great in a way since it gives us many more outlets, but the scene is slightly messy right now.

Is the market too fragmented right now?

The scene is very fragmented. In India, to reach your game to all the malls in the country there is no single channel distributor. Plus there are transaction issues involved like octroi and transportation which add to the costs of an emerging retail distribution scene for gaming. However, we are hopeful that it will stabilize very soon.

It's not just our problem, even majors like Sony, Microsoft and Apple are facing similar issues for selling their boxes and iPods in India.

What is Kreeda's presence across shelves in India?

Currently we are in about 4,000 retail stores and 2000 internet cafes across the country.

What payment mechanisms are you offering users?

The current crop of payment options include credit cards for transactions over the internet and prepaid cards. We are also introducing our own gaming cards which can be used at internet cafes where our games are present.

How are you promoting Dance Mela?

We are planning to associate with college festivals where we can give students a full-demo of Dance Mela and our company profile. Soon we will also be looking at associating with a TV programme where the game will be integrated into the show's proceedings. Our objective is to reach 1 million users by March 2008 and we're working aggressively on our sales strategy to reach that target.

How does a start-up company like Kreeda see the inroads of Reliance's Zapak in the gaming market? Are they creating an over-powering presence?

I think Zapak's entry is great for the gaming industry. We're all grateful to Reliance for taking so much interest in this market. Thanks to Zapak, curiosity and following has increased dramatically in the country. The sector is just emerging - there are 4-5 players when there is space for about 50. We're right now creating a pie and then we will work together in growing it. When it's grown big enough, we can fight for market share.

If you were to do a SWOT analysis, how would the gaming sector look like?

The strengths would include interactivity, demand, business models and high profit margins in India. The weaknesses are distribution, perception and novelty while the opportunities comprise cafes distribution, Indian retail boom, advertising and educational gaming

As for threats, fragmentation is definitely there. The government might also come up with a regulatory policy when the industry scales up.

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