The Canadian gaming sector has risen to become one of the strongest in the world and leaders like Albert Lai of Big Viking Games and Alex Sakiz of Gamerizon are examples of how multi-million dollar gaming dreams can become reality in Canada.
A lot of credit for the suddenly thriving Canadian gaming sector compared to a few years ago goes to the extremely generous tax credit programs that attract world-class talent to the country to help out the existing 432 or so companies in the space which Lai says is enough to pay 5000 employees.
Lai, who was Co-Founder of Kontagent which raised over $20 million in venture capital funding tracks over 150 million users a month, over a billion events a day, and over 25% of all Facebook Dollars spent.
Other entrepreneurs like Ken Seto of Massive Damage and Chris Wright of Games Analytics can’t stress how important data analytics are in understanding how to shape the development of an always evolving mobile game further for monetization purposes.
While new privacy legislation will give way towards less accurate metrics for game developers as gamers can opt out of being tracked, game developers will still have a pretty large sample size of data to work with.
Not only that, but game developers are leveraging communities with the belief that hundreds of thousands of voices are better for pitching new ideas than a team of twenty-five people according to Zack Karlsson of Capcom who started building his community on Newgrounds over a decade ago.
Lai did say that profitability may be slowing down in the social space with Facebook changes like not being able to get users to invite friends for game credits, Facebook Taxes and overall changes to the site recently as it shifts towards a potential mobile strategy more so optimized for smartphones and tablet apps.
It was further underlined that game publishers have to think in a different way when it comes to making revenue from mobile. With so many games being offered for free, mobile game developers have come to rely on advertising and in-game transacations using virtual currency to turn a profit.
There are also other models emerging like Tapgage, an in-app app advertising platform and plenty of different marketing methods in the offline to online space using mobile communications technologies to support game developer efforts that have been less utilized. Gamerizon uniquely offered one of their Chop Chop games for free for a short period of time and had an influx in downloads and managed to make $1 million dollars in five days due to the other associated revenue models built into the game before turning it paid again. It’s part of what they call the “Freemium” model where 2% of gamers are business and 98% are waste when you give an app away for free, so they wanted to twist those percentages in their favour by adopting a hybrid model as 80% of the top grossing mobile games are given away for free according to Lai.
Kontagent’s founder continues to be amazed how there are so many independents winning in the mobile gaming space as traditional gaming publishers struggle to adapt to an intensified gaming platform marketplace. Sakiz of Montreal’s Gamerizon and their popular Chop Chop franchise has made millions and raised $5 million in VC funding from VanEdge. He said in his presentation that the traditional video game industry is too intertwined with that of the motion picture and television industries. As a result, due to contracts, the nature of traditional relationships that mirror that of television, owned content, licensing agreements, legal stipulations and what not it is more difficult for legacy publishers to become cross-platform publishers.
Even worse, social and mobile gaming have turned out to be some of the fastest moving ecosystems in the world making it really hard for traditional publishers to catch up in the development race. Adding to development issues is that many legacy games require a rebuild for social and mobile platforms.
Although mobile gaming is hotter and potentially more lucrative than ever, it doesn’t come without challenges. Unlike the traditional console market Gamerizon said that they are competing with all the other apps from various categories out there as well.
Sakiz emphasizes that there’s just simply no industry like mobile with over 1 million competitiors- a market that will continue to grow exponentially.
And the traditional publishers are feeling the effects as losses continue to deepen for companies like Electronic Arts in the hundreds of millions, just like in any other industry so affected by the change digital, social and mobile have brought about.
A gaming industry that had Albert Lai asking in the wake of massive 2010-2011 Canadian acquisitions totalling in the billions ask not what company will get acquired next, but rather which Canadian gaming company will acquire a $100 million dollar plus company in the future.