NOV. 8, 2012 • Aeria Interview: There is a flood of free-to-play publishers making bold moves to carve out territory on mobile platforms. While it cannot be contested that many consumers are now completely enamored with their smartphones and tablets, there are mounting questions about how many games these consumers will actually pay for on their mobile devices, and whether there is too much content vying for far too little prospective purchasers.

That conundrum doesn’t seem to be deterring Santa Clara, Calif.-based Aeria Games and Entertainment, which plans to increase its share of mobile revenue from 25% to 50% during the next 12 months. Aeria is best known as a publisher of F2P MMO titles in 30 countries and nine languages, experience that chief executive Lan Hoang believes is the ticket to set Aeria’s upcoming mobile slate apart from the competition. DFC went to Hoang to get a first-hand description of Aeria’s mobile ambitions.

DFC: Aeria is best known as a free-to-play online MMO company. But with the acquisition of ijji Games, you picked up a significant shooter community, and with the move into mobile, how do you frame Aeria today?

Lan: Aeria Games intends to be a leading device-agnostic provider of free-to-play multiplayer core games. The multiplayer core gaming market is different from the casual gaming market and our expertise – from monetization, management of game operations, to marketing – transfers across all devices.

With the launch of Monster Paradise and the release of our additional mobile card games, Aeria Games will be a leader in the mobile strategy and role-playing card games. In addition, Aeria Games has built a distribution platform Ignite, similar to EA’s Origin, but focusing on free-to-play games. The platform has achieved 450,000 daily active users (DAU) and will soon surpass the 500,000 mark as we’ve just launched Tribes and will confirm additional games to join the ranks.

DFC: Considering that Aeria started with under 10 people on staff six years ago, the amount of growth in content and distribution resources you have attained during that time is enormous.  How were you able to manage that rapid growth so effectively?

Lan: To grow to approximately 350 people across three offices we were focused from the start on building a robust technology infrastructure that can scale and assembling a team with strong operational expertise. Unlike other start-ups, we wanted to build a self-sufficient sustainable company before pursuing external financing or raising our market profile.

DFC: Last September you acquired the internal development team from Punch Entertainment, who formed the foundation of your mobile development aspirations. How much extra did you have to build from that foundation in order to launch your mobile division?

Lan: Prior to the acquisition of the Punch Entertainment team, Aeria Games had no internal mobile development experience. The Punch Entertainment team became a foundation for our mobile initiative. We have significantly expanded the team to acquire additional expertise in mobile games publishing, as well as  mobile marketing. Fortunately, the experience in operating PC-based MMO games is very relevant and transferable to mobile games. With 35 people and an expected size of 50-plus members by the end of this summer, Aeria Games has the resources to publish one to two mobile games per month, mainly from licensing third-party games.

DFC: You launched your Aeria Mobile division last March with three titles: Eden Eternal: Monster Paradise, Tuff Tanks, and Armygeddon. Please give us snapshot of how well these games have done with mobile users.

Lan: Monster Paradise, Tuff Tanks and Eden Eternal went commercial but we took Eden Eternal down though we may revisit relaunching it at a later date.  Armygeddon will be launched in the near future. Monster Paradise achieved a ranking of No. 13 of Top Free Games on iOS and is now in the Top 100 for revenue. The metrics are amazing: daily average revenue per user is close to $0.60 and daily average revenue per paying user is north of $20. With the success of Monster Paradise, we will be launching a new card game Immortalis with Western graphics and improved gameplay on the iOS and Android platforms. We expect a strong performance from this game.

DFC: What is your strategy for mobile?  How much of your revenue would you like to see mobile games generate for Aeria?

Lan: Aeria Games intends to focus on its core competency for mobile: the publishing of multiplayer mid-core mobile games. The focus allows Aeria Games to move quickly in the fast-changing mobile game market. As a publisher, we will extend our expertise – fast game launches, management of multiplayer core games, monetization, marketing, analytics, etc. – to the mobile gaming market. Aeria Games has the ability to launch one to two games per month on the mobile platform in the underserved mid-core gaming market. By the end of 2012, mobile games will generate approximately 20%-25% of our revenue and 50% by the middle of 2013.

DFC: How many mobile titles are you offering now, and what will be the number available by the end of the year?

Lan: We have commercialized only Monster Paradise, Tuff Tanks, and Eden Eternal so far. We will be announcing more in the coming weeks/months. By the end of 2012, we expect to have six to 10 commercialized titles on both the iOS and Android platforms in Europe and Latin America.

DFC: With many companies rushing to build their mobile game business with a flood of titles, what sets Aeria’s games apart that can attract a strong user base?

Lan: Aeria Games focuses only on the multiplayer mid-core gaming experience. With a strong user base of core gamers, we can leverage not only the current players of our games but also our extensive expertise in managing and operating such games. Our target demographics will have higher lifetime value and a preference for high-quality complex games.

DFC: What percentage of your existing PC users are migrating to your mobile titles?

Lan: Over time, we expect most of our PC users will be playing smartphone or tablet games. Currently we target to transfer 10% to mobile games within the first month of each mobile game launches.

DFC: By and large, are your mobile titles drawing in more non-Aeria gamers than existing customers?

Lan: Of course, there are new players for mobile games, but generally the target demographics are quite similar.

DFC: What have you had to learn to market effectively to smartphone owners? What does it take to reach these consumers?

Lan: The channels used for mobile marketing are different, and due to the newer nature of mobile marketing there’s more experimentation and less data available. However, the general expertise for successful marketing is the same and lessons learned for PC games are transferable to mobile.

DFC: Last January Aeria acquired the online gaming portal ijji Games from NHN Corporation. What benefit did you see in the acquisition at the time?

Lan: We gain 10 million-plus registered users and a strong user base of hardcore gamers, especially in the action genre.

DFC: In April of this year, Aeria attracted another outside investor in So-net Entertainment, the online network subsidiary of Sony Corp. In addition to the funding, what is Aeria gain by this relationship with So-net?

Lan: So-net is also the biggest shareholder of DeNA in Japan, and has extensive relationships with Japanese mobile developers, which are important for our goal of obtaining more high-quality mid-core mobile games from Japan.

DFC: A long term criticism of Aeria is that you don’t have enough original IP to funnel into your distribution channels. How do you respond to that question? Do you really need more original IP, and if you do, will you look to more development acquisitions to fill that need?

Lan: Major development companies in Asia and even in the U.S. have tried to extend their IP to other regions. Most are unsuccessful or have unprofitable operations. Our platform allows IP owners to expand globally faster and with less investment of resources. To build a similar publishing infrastructure would take much time and money.

DFC: You have offices in the U.S., Germany and Brazil, as well as publish in nine languages and 30 countries. Please give us a sense of Aeria’s global strategy.

Lan: Aeria Games will continue to focus predominantly in the Western hemisphere and English-speaking countries. We are in early stages of planning for an expansion into South and Southeast Asia.

DFC: With the beta launch of your Ignite digital distribution service last May, you said you would bundle the service with all of your upcoming games.  How has your user community responded to Ignite? What benefits, or annoyances, have they found with Ignite?

Lan: Ignite now has 350,000 DAU, that is, 350,000 people have the application in their system treys, allowing us to cross-promote and message our users. We continue to add social features and other important functionalities to increase the value proposition of Ignite to users. Ignite will have 500,000-plus DAU within the next two months.

DFC: As well as being a single stop for users to launch all of their Aeria games, Ignite also give you an opportunity to communicate more directly with them.  Please explain some of the ways you use Ignite to reach out to the community.

Lan: On Ignite, users can message with other players, see targeted promotions, download multiple games at the same time, etc. We have the ability in the near future to have promotions and events tailored to each individual user.

DFC: Ignite is as a platform is supposed to service PC as well as smartphone uses.  Please explain how Ignite is able to service these different platforms well.

Lan: We are building a mobile Ignite, utilizing many of the functionalities in Ignite on our mobile dashboards. In addition, Ignite can promote and incentivize users to download mobile games, similar to other marketing methods.

DFC: Like Steam, Ignite is also intended to be a distribution platform for other developers.  How aggressively are you pursuing such partners and what is your criteria for outside content to run on Ignite?

Lan: For new partners, we are looking for games that can be attractive to our core gamer audience. These games may have a proven record or are highly anticipated games. Because we target the free-to-play MMO space, we will be much more targeted than Steam.