Danish game company grows in Southeast Asia

Danish-owned PlayLab is a mobile games company based in and focusing on Southeast Asia as future growth market, with a global success landed with their ‘Juice Cubes’. As their third developed game became their break-through they quickly grew from a team of 20 people to over 100 within a short period of time.

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CEO and co-founder Jakob Lykkegaard Pedersen held a presentation at the Techsauce start-up summit earlier this year and ScandAsia got a chance to get insights into the gaming industry and how PlayLab has grown into a success and continues expanding, striving to create the best games for iOS and Android devices along with Facebook.

Jakob started Playlab along with Danish co-founder Thomas Andreasen and a third Dane, their CFO Kasper Kragelund has also invested into the company. Legally based in Hong Kong they have games labs in Bangkok and Manila. Anino Games (Manila) that Playlab bought up is their fifth games team that focuses on developing Playlab’s casino slots games further. The games company has also received a $5 million investment from Monk’s Hill Venture in one of the largest games VC deals in Southeast Asia to date.

PlayLab was basically born out of Jakob’s initial intention to move to Asia, first aiming at Japan, but ended up instead in Thailand where there was no teach start-up or anything back then.

“I didn’t really feel like the lifestyle was fully there,” he comments on Japan, and randomly came by Thailand that he could live here and build up his business. “There was no one really to communicate with, but I liked the country and the lifestyle enough.”

His interest in Asia was also based on the business potential.

“I could see that Europe and the US felt were stagnant. I didn’t feel that things were going as fast and I was impressed by the heavy growth that was happening in Asia in general and that was what attracted me.”

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Jakob had done a start-up previously, which was a plug-and-play editor for Facebook pages, which was quickly bought up by a US company, and him eventually bought out.

“I then started investing into different start-ups in Thailand, early on when there was really also no angel investor community. And one of these investments was into a gaming company, so I bought my way into a gaming company.”

Ten the team of fifteen people in Thai team decided to shift focus, moving to mobile and into more social games.
“And I came from a background of doing Facebook applications, so we moved into this where people can play against each other and leveraging Facebook heavily to build it up.”

The third game became a real hit on the global market, we have over 25 million downloads on it and it has generated more than 18 million dollars, and is still generating revenue. That was the game that also really kick-started the growth of the studio.”

The success with Juice Cubes meant having problems with server issues, mainly due to lack of expertise in Thailand to handle hat big servers, explains Jakob.

“When you scale up games that fast you need cloud servers that can handle it. The game still communicates with our servers to keep the information and keep game saved.”

The remedy was to find internal talent, which the do mainly do in Denmark and the rest of Europe.

“So our Bangkok team is 50 per cent foreigners, many from Denmark and France.”

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Succeeding in getting popular with a game very much depends on the game as such, explains Jakob: “in the case of Juice Cubes, for every user that we got in he/she invited three friends that signed up to play. So we could do marketing to get one users and get three friends in per user on average. That is also why you can grow that fast.”

To market this game they spent mostly on Facebook advertising.

“They have a lot more information about the users so we can more specifically target based on interest. So for Juice Cubes we have spent over two million us dollars up to now.”

Google and Apple mainly are the main distributors of the game: “As long as we get approved to the apple store, for instance, they will handle all the credit cards and download. Apple gets a thirty per cent cut of all sales that happen on the iphones but they also help with some of the promotion.”

All mobile games, these days, are free to download while the revenue comes from no more than five per cent of player who spend money.

“Angry Birds was probably the last successful Premium game, it cost you a few dollars to download the game but in today’s markets most games you download are free. Instead you focus on when they are in the game, in app purchases. If you don’t spend money you might have to wait ten hours for building to get done, but if you pay money it gets done instantly. So you now get users to spend several times. Those that buy spend a lot. Around 0.1 per cent of them, the super spenders, several of them spent more than 10 000 us dollars in our puzzle game alone!”

 

You have people who are addicted to it; usually American housewives who have plenty of time and money and are in need of something to do. They haven’t been playing games for many years; it’s a completely new market,” says Jakob and says that they are not against the freemium games [game provided free of charge, but money (premium) being charged for proprietary features] like others who try to complete the game without spending money.

“American housewives are not that way; they think that this is normal so it is easier for them to adopt the culture of actually spending money on mobile games as entertainment.”

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Their games were mainly built for the U.S market as they have the best online payment penetration and while they are still competing on the western market they have decided to go after Southeast Asia.

“There is not really any player in Southeast Asia and that’s the market we want to grab, that has been neglected so long that you cannot even pinpoint any specific market here now.”

“You can see that the growth here is incredible, 50 per cent year-on-year growth of both revenues and downloads. Where Southeast Asia is unique is that they kind of jumped over the PC generation and directly to smart phones. That’s why you have Line so successful, for instance.”

As for finding talented team members it is 50/50 locals and westerners.

“For local talent in Thailand you have great art, animation, and also some good game designers. But of course you don’t have the experience in Thailand and that’s where we can bring in people from overseas, even our lead art is Danish. And you have in Scandinavian a different style in sense of quality. But he is able to train a local team to get up to that level. So our games are by far globally competitive; on par with global successes in terms of production value.”

Scandinavia is a good source for talent, based on its success in the gaming industry.

“You have really good schools, art schools and development schools, so you can get really good people from Scandinavia at the moment.”

As for the local start-up scene Jakob comments: “For the last three years it’s been crazy growth within that; we now have events like Techsauce that we would never have seen a few years ago. I didn’t know a single guy in tech in Thailand, but the last three years you started with co-working spaces, got the investors in, even the telecoms feeling that it’s trendy to do start-ups so they started promoting it and that’s where we now have a local Thai scene as well, building start-ups.”

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