OCTOBER 4, 2011 • One of the big winners as the Nintendo DS and Wii platforms took off in recent years was Majesco Entertainment. Despite having released some successful big-budget console titles in the past, the company has mostly been tagged as a publisher of bestselling budget franchises. But now Majesco is riding the success of popular family game series such as Cooking Mama and Zumba Fitness to expand into the online free-to-play (F2P) business.
Mid-year, Majesco acquired Quick Hit Inc., and the latter’s NFL-licensed online football game, for the specific purpose of driving content onto social networks. The publisher is also leveraging its experience on the Wii to quickly adapt its family-friendly casual titles to the Microsoft Kinect and PlayStation Move motion sensing controllers.
With the two current big drivers of the games industry – the online microtransaction model and console motion controllers – well suited to the casual content Majesco specializes in, DFC spoke with chief executive Jesse Sutton to see how the publisher plans to leverage its good fortune.
DFC: Majesco is having a great year. Net revenue for the quarter ending April 30 nearly tripled, your stock is trading higher than it has since 2005, and Zumba Fitness has sold more than 2 million units worldwide since the holidays. Please give us a snapshot of where the company is today, and where it is going tomorrow.
JS: We have had significant past success with the Cooking Mama franchise and now with the breakaway hit in Zumba Fitness, we are excited to see our strategy of focusing on franchise development pay off. As in the past, you will continue to see us focus on strong brands this holiday season, including Hulk Hogan, Alvin and the Chipmunks, Jillian Michaels, Jaws, and of course Zumba and Cooking Mama.
Majesco has demonstrated success with the casual gaming audience, and we will continue to focus mainly on family friendly products targeted at kids, moms and the whole family. We are looking forward to seeing how Kinect brings more casual gamers into the fold, as we believe we are well positioned and this will create a significant opportunity for growth for Majesco.
Another area of growth for us is in the social gaming space, which we are aggressively pursuing and excited about our current slate of games.
DFC: A year ago, 98% of your sales were made on content for Nintendo platforms. Today Nintendo accounts for 64%. How important has it been for Majesco that motion sensing controllers have arrived for the Xbox 360 and PS3?
JS: Our demographic focus allows us to create products for any platform our demographic of kids, moms and her family migrate to. The new motion based platforms that have emerged, most specifically the Kinect, offer us the opportunity to really broaden our reach to the consumer that was earlier only on Nintendo platforms.
DFC: With two successful recent franchises in Cooking Mama and Zumba Fitness, what now is the formula for upcoming Majesco IP?
JS: We believe brands will break through in a clutter casual games space, therefore we will leverage past success and continue to primarily release products based on well recognized brands. On console our newest releases include Hulk Hogan’s Main Event, Alvin and the Chipmunks Chipwrecked, Jillian Michael’s Fitness Adventure, and we’ve also announced future development on an NBA title and a gaming initiative with Harley Pasternak, who will star in an ABC daytime series this winter. On the social games side, we have NFL QUICKHIT Football, Parking Wars 2, based on the A&E show of the same name, and more to come. We have to build upon the success of Mama and Zumba while planning for the future by adding more branded experiences to our overall slate mix.
DFC: Majesco has seen the majority of it previous sales hits in what has been called the Value Category of video games – simple, accessible, fun, low-cost games. Although the BloodRayne series established some success as a premiere game franchise, other AAA titles such as Advent Rising and Psychonauts never found large audiences. What was learned from those earlier ambitious development plays that brought staff layoffs and talk of bankruptcy?
JS: We learned the hard way what happens when you are a relatively small company with limited capital resources and you swing for the fences with blockbuster game efforts. If you are successful it’s a home run but the risk really is potential insolvency. It has taken us seven years to come back from that and become a preeminent player in the casual family game model. We believe that the casual game audience is still interested in fun, accessible, easy to pick up experiences, but the market has changed and just because we are focused on Casual that doesn’t necessarily equal Value Category today.
DFC: Majesco’s acquisition of Quick Hit Inc. in May was a clear statement that the company sees online as another viable platform. How well do you expect existing Majesco IP to translate to the online free to play model, and why?
JS: First and foremost, we believe it’s our expertise in the casual gaming space, focusing on moms and their families is what translates most to the social gaming space. But additionally, there is an opportunity to translate our existing IP to online, depending on the IP. Cooking Mama is the most obvious translatable product and early reception to the brand on Facebook is indicative of its potential. However, we treat online/social/mobile as a separate strategy and we look to partner with brands that we can create good social/mobile experiences around.
DFC: Given the different financial model of online F2P games that well supports ambitious titles in Asia, do you see Majesco ever investing in premier games again?
JS: With the expanded cost structure and the difficulty in creating awareness for hardcore games I would doubt it. Of course, we can’t rule it out, if, for example, BloodRayne sold a ton of units on the PSN/XBLA version we are releasing this summer, then maybe we’d consider bringing Rayne back to her fans in a more robust way.
DFC: What content opportunities does the F2P model offer Majesco that were not present with existing game platforms?
JS: F2P is a model that presents games as a service model. It requires great understanding of your customer. With the current analytical tools available for Facebook games, we can now learn more about our players everyday. This allows us to make tweaks to our social games that maximize player retention which should in turn maximize monetization. This is a very different business model than the traditional games business where you are pretty much done development once the product is out the door.
DFC: You have a Cooking Mama title available on Facebook, plus two more games. Prior to bringing in Quick Hit, it could be argued that Facebook was your primary F2P platform. Now that you have an ambitious browser-based sports game under your roof, where will we see future Majesco title appear online?
JS: The big driver for acquiring Quick Hit had to do with their knowledge of GAAS. The fact that their NFL based game operates outside of Facebook is not indicative of our willingness to do other games on the web as well, but could be a learning tool as we are committed to developing expertise in the digital realm.
DFC: Quick Hit had raised approximately $15.5 million in three financing rounds. Acquiring the online developer for $836,000 seems like rather a steal. How did Majesco manage to purchase a company with an NFL license at such a bargain? Did the purchase actually include the license?
JS: We felt like the value of Quick Hit was in the synergies between our two companies, which the previous investors of the company weren’t able to realize the way Majesco could. We continue to operate the NFL game, which also fits in nicely to our branded entertainment strategy.
DFC: How do you intend to integrate Quick Hit into Majesco’s development operation? What Quick Hit assets do you intend to leverage the most, and why?
JS: The Quick Hit operation is now Majesco’s internal social games development studio, directly working on or overseeing our current and future social games slate. Having a GAAS business model really requires experts who understand it to execute properly on it. The staff at Quick Hit and their expertise, and specifically, Jeff Anderson our New SVP Online, are the real assets most valuable to us.
DFC: In addition to Quick Hit Football, you have a licensed National Basketball Association title in development, plus a Hulk Hogan wrestling game. Where does these titles say about Majesco as a sports game publisher? Have you identified the sports genre as a growth segment?
JS: I wouldn’t say we have identified the sports segment as a growth segment. I would say that we have very unique casual gameplay experiences for all three brands you mentioned, so we are staying true to our strategy of focusing on the casual games segment with significant IP to create a branded entertainment experience. We think the consumers will really get excited about all three of these games.
DFC: The NBA title for the Xbox 360, will this be a retail release, or distributed online via Xbox Live Arcade?
JS: This will be a retail release and we can’t wait to bring more information about this game to market. We will let you know more about it soon. Stay tuned!
DFC: Given the robust development of Xbox Live and the PlayStation Network, how extensively is Majesco weighing digital distribution through these console networks?
JS: Of course, the gaming industry, as other entertainment industries, is moving towards a digital distribution model, which includes Xbox Live and PlayStation Network, but there are also many other forms of delivery to consider. Specifically, on the two platforms mentioned, we are going to publish a new BloodRayne game releasing this summer. The game looks fantastic and won a “Best of Show” at E3 from Electric Playground as a result. Fans have been clamoring for a return product for this franchise and we thought this platform would be the perfect one for it.
DFC: Back to the NBA game. How does the gameplay utilize the Kinect? What is the experience like. Would you call it a sports party game?
JS: We are not quite ready to release the details of this product but we believe it is a revolutionary new way to experience the brand that players will really enjoy! We’ve done a lot of research around the title and consumers have told us that playing a sports game with their thumbs (on a controller) is not the only way they are interested in playing, so Kinect brings a really interesting dimension to address this.
DFC: Tell us more about your slate of online F2P titles. From a gameplay perspective, where do you think they fit in with/compare to F2P games coming out of Asia and Europe?
JS: Our F2P games are currently focused on taking advantage of the brands they represent. Cooking Mama, Parking Wars 2, and NFL QUICKHIT Football are based on recognized brands as will be our soon-to-be-announced social game. We believe each game was designed to take advantage of the brands they represent. Cooking Mama is now over 1 million MAUs and that is indicative of the fan interest.
DFC: What is your virtual item monetization strategy for your F2P titles? What are players buying, and why?
JS: We believe the “special sauce” for F2P games lies in formula for offering monetizable opportunities, be it consumable goods, energy, customization, and more. Each game has a different mix that reflects the game experience and analytics of player patterns, of course.
DFC: Moving forward, for titles not intended for Facebook, does Majesco have a preference for browser-based or client-based F2P titles, or is it a case-by-case decision?
JS: It’s a case-by-case decision, but we’re always going to keep in mind our casual audience target and what makes a great game still very accessible and easy to pick up and play.
