million dollar case studies

Building Million Dollar Business in a Year

3 Case Studies

• Introduction to Everyone • Introduction to Myself • Grow Art Outsourcing by partnering with a School • Grow Development Outsourcing by finding the right Niche • Grow Games Studio Outsourcing by looking at the Market • Key Takeaways • Q&A

Felt I was strong in production, but not strong enough in business so partnered with an outsourcing company to build a business. Not a big fan of art outsourcing because I felt it was undef

CONFIDENTIAL

China West Coast

CONFIDENTIAL

Summary

CWC aims to become the best service provider to game developers and game

publishers.

Based in Suzhou, CWC was formed by experienced experts from KONAMI, Sierra,

NCsoft and UBI Soft in 2008. Based on years' experience, we deeply understand the challenge and opportunity our clients are facing. "Small Money Big Pie", "The

deadline is always yesterday!" We want to help our clients to create more qualified contents in timeline and share our experience and expertise through the project.

The management team of CWC has more than 7 years average working experience in multicultural game projects and companies. We speak the same

language as our clients and specialize in training the local talents to satisfy the

requirements of international level games.

We understand what it takes to build good partnership and always value the trust

of our customer. Our team was built with the mindset of delivering Quality, Reliability and Security.

CONFIDENTIAL

Services

3D Character Modeling & Texturing

3D Prop Modeling & Texturing

3D Environment Modeling & Texturing

Mesh Optimization / LOD

User Interface

In Game Animation

CONFIDENTIAL

Tools

Service

Next-Gen Related Tools

Software

3D Studio Max Maya

SoftImage Photoshop

Character Studio Motion builder

Zbrush

Mudbox

Next-Gen Related Skills

Engine

High-rez model Normal map, Specular map, occlusion map, height map,

etc.

Renderware Torque Unreal

Bigworld

CONFIDENTIAL

Our Facility

No access to internet from workstations

Key cards to access office with 24/7 video security

Ensure after-hours management supervision

Fire walls, router, anti-hack, anti-virus and ISA Server to the networking

Separate Internet and Intranet, no outgoing is allowed

Centralized data management

No USB and other portable hard drives

CONFIDENTIAL

Scaling without Resources Underutilization

CONFIDENTIAL

CWC Co-lab

CONFIDENTIAL

CWC Co-lab Program

CWC invest in building game art courses with local

universities

CWC set up the 1st game art co-lab with Shanghai Film Art Academy in 2008

The CWC lab has been producing game assets for overseas developer/publisher on multiple platforms

First graduation class has a 94% employment rate

and average salary of over 4000 RMB

CONFIDENTIAL

Training Pipeline

< S t e p 1 >Basic Training Program Enroll

< S t e p 2 >Basic Training Program / 9 months

< S t e p 3 >Co-Lab Training / 3 months

< S t e p 4 >Co-Lab Project / 9 months

< S t e p 5 >Onsite Internship / 5months

CWC Full-time

CONFIDENTIAL

Case 1 – Find Strategic Partners to Scale

Project: A world wide console game

Big Publisher with a very tight schedule

Staffed a strong leader and elite team.

Team Time-shifted to effectively communicate with customer.

Project grew a 10k initial project grew to over 500k in one year after trust was established with the publisher and resources were available to scale.

CONFIDENTIAL

Case 2 – Invest in Training for Unique Capability

Project: A Korean Next-gen MMORPG

Conducted project-focused training for our junior artists for 3 months before allocating them to the project

Worked with clients engine and tools to delivery engine ready assets directly.

At the beginning of project, we have some of client’s artist working onsite with our team

We also send our artist to Korea for communication

Contract volume: USD 300k

CONFIDENTIAL

CONFIDENTIAL

Contact

[email protected]

Development Outsourcing

Augmentum Confidential 29

Rapid Growth

0

500

1,000

1,500

2,000

2,500

2003 2004 2005 2006 2007 2008 (F)

Profitable for the first full year of operation (2004) and ever since.

Headcount Worldwide China


New Hire Recruiting for 2008

Recruited 610 fresh graduates

out of 18,000

– Targeted top universities: 30

– Covered universities: 140

– Covered cities: 18

– Recruit rate: 3.4%


Augmentation Team Formation

Probationary Formation Steady State

™


Business

Imperatives Software

Consulting/

Professional

Services BPO

Business

Imperatives Software

Consulting/

Professional

Services BPO

U.S.

China

Leadership for Innovation Strategy


Customer Profile – United States

Smart Mobile

Phone Software

Storage

Semiconductor

PDA

Online Advertising

Mobile

Computing

Digital Entertainment / Games

Online Meeting & Event Management

Business Intelligence

Our customers are the leading players in each of the above markets


Customer Profile – China

Mobile Carrier

TV Manufacturing

Community site

Media

Our customers are the leading players in each of the above markets


Outsourcing is the Future for Gaming

“Game Outsourcing will reach $1.1 billion by the end of

2006 and is set to grow to $2.5 billion by 2010,

representing around 40 percent of total game

development spend.”

-Screen Digest 3/06

“Of the outsourced work going overseas, the majority

of the work is going to China and India.”

-Amritt Ventures 7/05


Console -> Online -> Virtual Worlds -> Mobile

More Titles, More Variety -> Bigger Industry

Next Gen pushing needs exponentially

Online require updated and additional content

MMO/Virtual Worlds are much more Technical

Real/Virtual World, Gaming, Hollywood, and

Entertainment becoming blurred together


Millions of Gamers

“As Chinese developers continue to improve

their skills across all game platforms, the country

has become the primary center for outsourced

game development globally” - Niko Partners: 8/06


China Games Market

• Fast growing Online PC Games Market

• 75% growth in 2006 from $468 to $830 m

• 20% # of players growth from 26 to 31 mil

• Big Operators declining in Market Share

• Local Content is taking off

• Largest Mobile Market in the World


Overview of the Market

• Breakdown of the Games Industry

– PC, Console, Handheld, Online

– MMO/Mid-Session/Casual/Serious Games

• Asia is focused on PC Online and Handheld

– Mid-Session and Advertising based games hot.

– Handheld/Serious games are more popular in Japan

• Western Game Companies focused on Console

• Korea and China leads in PC Online Space

• Social Networks/Virtual Worlds are exploding


30 Second Pitch

• Our Digital Media & Entertainment/Gaming

practice is focused on being a full solutions

partner for game developers, operators, and

content providers worldwide. We are building

our capabilities by leveraging the system

engineering strength and platform of

Augmentum and expanding into art, game

design and production.


Multi-Disciplinary Expansion


Not Just Engineers and Artists

• Producers (Exec, Senior, Line, Associate)

• Creative Director

• Designers (Game, Level, Writers, Balancers)

• Artists (Concept, 2D, Level, Character, SFX…)

– Technical, Art, Shader, Enviroment

• Animators (Hand, Key Frame, Mocap)

• Sound (Producer, Computer, Designer, Mixer)

• Testers (Level, Component, Certification)

• Licensing, Sales, Marketing, Customer Support.


100+ Person Team

• 38 Artists (28 City, 9 Car, 1 UI)

• 4 Designers

• 9 Programmers

• 1 Tools Programmer

• 3 Audio Content/Devs

• 2 Producer

• 12 Testers

• 5 Licensing

• 3 UX

• 2 Content Management

• 2 Art Leads

• 2 PM

• Audio, Usability, Support, Loc, Dev, Design

, and only 11 Engineers

• 9 Programmers


• 3 Audio Content/Dev

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Games Engineering Background

• Console Experience (TCR, Hardware, FPS)

• Graphics Rendering (3d, shaders, characters)

• Artificial Intelligence (script, models, animation.)

• Physics (Physics Models, Math, Theory)

• Gameplay Object Programming (Minigames)

• Multiplayer (prediction, reconciliation)

• Networking (network layer, communication)

• Billing, Database, Transaction Architecture

• Game Servers Scalability and Security

• Community, Social Networking, Web 2.0

• Tools/BI/Intranet Process Improvements

• Automated Testing (experience in above areas)


Art Background

• User Interface (UI) Artist

• 2D Texture and Concept Art

• 3D Modeling and Character Artist

• 3D Environment Art

• Special FX (SFX) Artist

• Animators


China is a Big Part of DE&G Business

• Four of the Top 10 Western Publishers

– Asia Online Game and Business Intelligence Platform

– Distributed Development for Sports Franchise

– Playtesting for an Online Game for China

– Digital Media Management System

• One of the Top 10 MMO Game Companies

– Intranet Tools and Social Networking Community Site

• Top Social Networking Application Platform


Decision Makers in IE Space (Diverse Projects)

• Execs: CEO, CTO, COO

• Studio Managers, General Managers

• Executive Producer, Producer, Tech Director

• Account Managers, Hubs in the Games Space

• Network in GDC Conferences, Talks, Shows


Bizdev to lay a lot of seeds

• Communication with Old Colleagues:

– Small Games Industry moves around rapidly.

– Referrals and Friends.

– Not just Engineering/Development Contacts.

• China Joy bigger than ever before!!!!

– Roy, Belinda, Vivian, Jason, John, Alex

• GDC China Event Cancelled

– Internal Chinese Politics

• Respect in Games comes from Shipped Games


Major Game Events for 2008

• E3 Media & Business Summit July 15-17th LA

• China Joy July 17-19th Shanghai

• Microsoft Xfest/XNA July 22-23rd Seattle, WA

• Casual Game Forum July 24-25th Seattle, WA

• Develop Conference and Expo July 29-31st Brighton, UK

• GC Developer Conference Aug 18-20th Lepizig

• Austin GDC - MMO/Virtual Worlds Sept 15-17th Austin

• GDC China Cancelled Shanghai

• Tokyo Game Show Oct 9th-12th Japan

• Game Convention Asia Oct 9th-12th Singapore

• Gstar Nov Korea


How We Built the DE&G Practice

• Build tools/solutions or do testing for – Developers, Publishers, Operators, and Middleware

• Build Web 2.0 Games, Virtual World Experiences

• Partner with Publisher/Company enter China

• Online/MMO Companies need server expertise

• Partner with China Art/Games Outsourcing Firms

• Build Art/Design team along with UX Team

• Hire Core Team Members when we can

• Build Game capabilities and Understanding – Art, Engines, AI, 3D, Test, Level Design


Growth with Customers and More

• Expand to all Ten Top publishers

– Build Social Networking/Community Platform

• Build bigger dedicated core teams

• Move higher on the value chain -> Royalties

• Develop/Retain IP and Licensing rights

• Embrace the consumer market

• Push in Euro/RMB contracts (fixed exchange)


“The Relentless Pursuit of Perfection…”

• Functionality is just the beginning

• Creating Emotions/Experiences/Entertainment

• Passion is Required to create the Quality

• Monetiztion/business/marketing is critical

• NEED to play games, watch movies, have fun


2008 Revenue Target

• Revenue Objectives – Sell 100 – 200 Resources for DE&G related projects CY2008

• Q1 ~ 30: Q2 ~ 60

• Q3 ~ 80: Q4 ~ 100+

• Current status – THQ 3, EA 30+, Qwaq 4, CCP 2+, Eidos 10

– All Customers should be Referencable

• Focus for 2008 – Leverage Augmentum Core Engineering Platform.

– Establish Creditability in the DE&G industry.

– Expand Augmentum’s multidisciplinary capabilities.

– Become the Best China Partner for Foreign Companies


Q3: Establish Brand, Credibility, and Internal Tech

• Utilize 3D Engine Team to Expand Capability – Expand Qwaq/CCP to include Virtual World/Game Work

– Ogre Engine, Small Port or Virtual World/MMO Project

– Build simple games with XNA Platform

• Expand all customers to include IE Work • Project Managers and Recruiting Plans in Place

• Build Website/Cases for Augmentum IE • Expand into Games Testing

• Build Captive Art Studio in Wuhan – Evaluate Art Outsourcing as Art Team Grows.

• Establish Advisory Board for IE


Q4 Augmentum Studios is Established

• Game Development/Operation is the MOST $$$

• Developing full games:

– Ports, Simple Down-Platform parallel creations

• Explore Crossover between Games and Gaming

• Evaluating Developing for China DE&G Market

– Social Network Platforms

– Virtual World Add-Ons or Extensions

– 3G Mobile Content/Platform

– Xbox Launch in 2009

• Evaluate Establishing an Operation Division


CY08

• Build a 100+ person organization by CY ‘08 – Develop and grow business opportunities

• Enterprise Software and Solutions

– For Top Game Publishers and Game Studios

• Interactive Entertainment

– MMO Game Companies

– China Market Production Needs

• Virtual World/Social Networking

– Business Intelligence

– 3D Development

– Mobile Interface


CY 08

• Create New Career Ladders and Structures

– Build the Interactive Entertainment Studio

• Artists

– Concept, 2D, 3D, Character, Enviroment

– Animators

• Designers/Project Managers

• Engineers (3D/Engine, AI, Gameplay, Network)

• Develop Bizdev/Sales/HR/Finance capability


CY08

• Grow Augmentum Consumer Capabilities

– Team of 5 PMs by CY ‘08

• Develop China Program Managers

» Focused on Design, Consumer Experience, Process

» Good Specification Writers and Communicators

• Develop China Game Designers and Studio

– ????


CY 08

• Customer and Account Management for PR

– Growth and Referencebility of Customers

• 80%+ of all customers referenceble

• 60%+ of all initial projects continued and expanded

• 25%+ of all customers refer additional leads

– Develop 3 Compelling Case Studies for DE&G

– Deliver 2 joint Press Release for D&G

• Plan for GDC SF 09 Talk

– Distributed development for Games Industry


CY08

• Expand Bizdev/Network across all areas

– Leverage existing leads for new introductions.

– Actively expand network at Conferences and Events

– Follow up on blind Referrals/Leads

• Synergy with IT/Cloud Computing/Operation

– China Business Intelligence and Operations

– Solutions (Middleware) Development


Current Customers

• Four of the Top 10 Western Publishers

– Asia Online Game and Business Intelligence Platform

– Distributed Development for Sports Franchise

– Playtesting for an Online Game for China

– Digital Media Management System

• One of the Top 10 MMO Game Companies

– Intranet Tools and Community Site

• Leading Enterprise 3D Virtual World

– Avatar Pipeline Production and Creation

– Multi-Modal Collaboration Application

• Top Social Networking Application Platform


Digital Asset Management

• Complete Digital Media Management Solution

• Stores and Indexes all Media Formats:

– Movies, Textures, Models, Animations, Sound, Music

• Global Federated Model for Studio and Worldwide

• Fully Indexed and Searchable with Thumbnails

• Version Control and Workflow Management

• Built as a Scalable MS Sharepoint Solution


Facebook Games


Distributed Development for a PC Game Franchise

• Games Industry is a relatively immature industry

• Embraced Art Outsourcing in last 5 years

• Market Forces pushing Distributed Development

• Database/Scripting/Rules based Simulation

• Direct X GUI Development

• Online Community Expansion


The Virtual You


Standard 3D Character Pose


“A Picture’s Worth A Thousand Words…”


Wall Street Journal

Virtual World Gets Another Life

Technology Offers Companies Private Workspace

http://online.wsj.com/home


Games Playtests

What is game playtest good for? - Combine controlled lab test and survey to

test the "fun" of a game

- Get the players' immediate experience of

a game

- Can provide game designers with

actionable feedback

- Can be used to compare different games of the same type or different versions of a

same game

- Test more participants at a time, so low

cost and rapid turnaround


Customer Quote: Tencent - Online Photo Album

“I was deeply impressed by Augmentum's deep understanding of Silverlight, expertise in User Experience, and their dedication and enthusiasm, as well as their high efficiency and on-time delivery..”

Richard Chang Director, Innovation Center, Tencent


Other Digital Entertainment Customers

• Fantasy Sport Flash Based MMO Game

• Mid Session Online Game and BI Platforms

• Online Photo Album

• Backend Systems


Newsweek: Chinese programmers rival Silicon Valley’s best…

“design savvy and sometimes

honest-to-goodness innovation”

“…says Intel spokesperson Bill

Kircos. “meet or beat the

deadlines””

“The principles of protecting

intellectual property are

stressed”

“one third the cost”


Booz Allen: Outsourcing Thought Leaders

Five prominent providers of

outsourcing services with TCS, 24/7

Customer, Cognizant, IBM and

Augmentum.

Augmentum: Pioneering Software

Development in China

Games Studio Outsourcing by looking at the Market

Social . Media . Mobile . Game . Interactive . Intelligence

TipCat Interactive

Truly Bi-Cultural International Team delivering Western

Production Quality Online Content and Platforms

combined with Chinese Business Model, Scale, and

Experience for the International Stage

Most Experienced Bicultural Development Team in China

Highest Production Value Team with released games on all platforms.

Strong Support from Government including China Operations License

Pipeline of Talent from Activision, Ubisoft, EA, Shanda, Tencent…etc

Partnership with Universities and Schools for additional talent pipeline

Strong Network and Credibility in Local and International Agencies

Unified Client, and Backend Technology across PC, Mobile, and Social

iPhone Games 79

Shanghai Express Shanghai Express is a tile-based pair-matching game.

Shanghai Express is the first title we developed Shanghai Express is the title, which we co-op with uWink.

iPhone Games 80

Magic Mind Reader Magic Mind Reader is an entertainment application.

Magic Mind Reader is the title from uWink games.

iPhone Games 81

Sudoku Guru Sudoku Guru is a Puzzle Game with

60,000 Sudoku puzzles. Ranked #2 in Japan market, 71627

downloads since Nov 1 - Dec 31, 2009.

iPhone Games 82

Cell War Cell War is a horizontal-scrolling shoot'em up arcade game. Cell War has 2 game modes, 9 unique stages, 3 difficulty levels and more than 10 bosses. Cell War supports OpenFeint achievements and leaderboards.

Cell War hit ‘What’s Hot’ on iTunes. Ranked #56 in US Arcade Games and #70 in US Action Games

"There really is a lot to like about this game, and the production values are outstanding." TouchArcade.com

http://www.toucharcade.com/

iPhone Games 83

Ghosts’n Zombies Ghosts'n Zombies is an action shooting game. Ghosts’n Zombies has 2 game modes, 15 stages. Ghosts’n Zombies supports OpenFeint achievements and leaderboards.

Ghosts’n Zombies hit ‘New and Noteworthy’ and ‘What’s Hot’ Ranked: #27 in US Arcade Games, #79 in US All Games

"Ghosts'n Zombies is a fun shooter with a silly premise, and worth picking up." - TouchArcade.com

http://www.toucharcade.com/

Global Runner

Global Runner is a casual side-scrolling game.

Wild West

Launched Wild West on RenRen

Community, Virality, Compulsion Loop, Monetization

Partner/License to North America Operator

Driving Traffic from SNS to Mobile/Game Portals

Scale Production Capability with M&A and Licenses

Alpha Launched on RenRen:

http://apps.renren.com/hahawest

http://apps.renren.com/hahawest

Office - Suzhou

Office - Shanghai

Mobile Development

88

iPad Development

Mobile Games wasn’t making any money

Old Media Business Models

Full Packaged Product

Subscriptions

Advertising Based

None work in China

Piracy

Credit Cards

Low CPMs and Government

Distribution is King

China will lead the way for New Media Innovations

2009 was the year of Online Video

CCTV Cost went up 15%, budgets went down. Brands still needed the reach

Youkou, Tudou, PPLive were all natural fits for low cost and high reach

2010 is the year for Gaming in Social Media

Social Gaming hype worldwide is at an all time high

Agencies are pitching Social Media/Virtual World play in China

Gaming is an established mainstream medium in China for target consume.

Mobile Development for Agencies

Pepsi’s iPhone game for Burton USA open game 2009.

In-Flight Entertainment actively expanding Gaming Content on Planes

Exclusive Games Developer for #2 Content Provider for Airplanes

Mainstream Entertainment companies actively looking at New Media

Western Media plays requires large upfront guarantees for their IP

Asia markets actively looking at new media for growth and community

Social Networks control distribution and scale in new media world

Unbeatable Attraction

Unbeatable Clear World Cup Campaign

First International Branded Social Game for Omnicom/PHD China

Unilever’s Digital Media business in China is $440 million USD

RenRen driving at least 4 to 7 Million Registered Users plus Real Life Promotions

Harem for Sale, Training and Cheerleader Mini-Games, Social Bar, and Fan Club.

Mobile support include WAP gameplay and Avatar augmented reality pictures.

Zombie City (Working Title)

Cafe World + Plants vs. Zombies

Using decorations to attract various zombies

Expanding yard to contain more decorations

Hiring your friends as attacker and mechanic

to protect your house

Producing different light weapons, heavy

weapons and traps to kill zombies

Trying to capture zombies to build your

personal troop to ‘visit’ other players house

Greed War Online

A 3D MMO casual game for main stream PC

Revenue from micro-transaction

Suport UGC- by providing easy-to-use level editor

Pirate universe , Simple control, Multiplayer ( 2-8 ）,

Competitive and cooperative game play, Rich item system

Game modes: RTS, DOTA，PK，Somali, Ghost Boat,

Treasure Island

Lord of the Seas (Working Title)

Unity 3d Tower of Defense Ship Game

10 Levels PVE then PVP gaming begins

Upgradeable Ships, Towers, and Crystals

Prototype live on http://apps.renren.com/lordoftheseas

http://apps.renren.com/lordoftheseas

95

Find Good Partners to Work: Complementary Skill Set

Figure out and Start with what you’re good at!!!

Think Different!!!! Look for the Next Wave

Maintain a Defensible Differentiation

Build an Organization and Culture that can Last

Be out there driving the Businessp pitching, and

Track your prospects pipeline carefully

Watch your Cashflow!!!!!

Be Ready and Watch for Change (RMB -> 4 -1?)

Have Fun


100+ Person Team

• 38 Artists (28 City, 9 Car, 1 UI)

• 4 Designers

• 9 Programmers


• 3 Audio Content/Devs

• 2 Producer

• 12 Testers

• 5 Licensing

• 3 UX

• 2 Content Management

• 2 Art Leads

• 2 PM

• Audio, Usability, Support, Loc, Dev, Design

China will lead the way for New Media Innovations

Make a Wish Foundation

One Wish to do anything

Movie Stars, Disneyland

Xbox Was Pretty Cool

Gave him a tester

Gave him a goodie bag

Played with the testers

Passed them to the Halo guys

We are making Games

Bill Gates: if you’re not having fun.

Then what will you have fun doing

Thanks

million dollar case studies

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