Q&A: Gameloft’s Vallois on an Upcoming Mobile-Social Gaming Network & More

Like other gaming companies from the pre-iPhone era, France’s Gameloft has steadily made Android and iOS a core part of its business by bringing smartphone revenues to 34 percent of its total in its most recent quarterly earnings report.

With hit franchises like Modern Combat and then more casual titles like The Oregon Trail, Gameloft is looking for a more balanced portfolio going into next year between action-oriented games and more accessible brands. We caught up with the company’s senior vice president of marketing and sales Gonzague de Vallois on the company’s plans for the coming year, which include a mobile-social gaming network in the first half.

IN: When we see Gameloft on the grossing charts, we typically see titles like Modern Combat, Order & Chaos or Starfront: Collision. How do revenues from your portfolio of games break down between these types of titles and some of your more casual ones?

Vallois: We originally developed games for early adopters; as those were indeed the first purchasers of smartphones and tablets in 2008 and 2009. So while our first hits were more hard core games like Modern Combat or N.O.V.A., we’ve found that the user base has become much more diversified, now consisting of a more casual audience, and thus we are extending our range of games accordingly with games like Oregon Trail or Fantasy Village.

We have already successfully gone through this target expansion on the feature phone business a couple of years ago. In this market, our casual games represented finally more than 50 percent of our revenues.

IN: What kinds of games could we expect to see coming out next year? How will it differ from what you launched this year?

Vallois: Smartphones and tablets are becoming really mass market. For example, given the choice of devices consumers now have, a tablet user can range from be a retired business man to a young girl. So you can expect all kind of games to come from Gameloft in the next year to address all kind of customers’ tastes.

Not to mention, all those games will have to be more and more refined, offer a deeper and deeper experience as our teams learn year after year how to optimize the user experience on the platform. On the business model side, you can expect a quite balanced line up between freemium and premium titles.

Last but not least, new hardware will come out (quadcore devices for example) that will help enhance the experience even more.

IN: A lot of your better known titles are also paid (even though you do have free games like Uno, Real Soccer, etc.). Where do you see this going over the next year?

Vallois: The freemium business model is experiencing very strong growth in the video game industry as a whole. At Gameloft, we are embracing this trend but are also making sure we keep the perfect user experience and learn from consumers’ feedback. Depending on the gameplay and on the audience, we will balance our line up between freemium and premium titles.

IN: How does Android play into your strategy this year? Do you start treating it evenly with iOS this year? If not, when do you see that happening?

Vallois: Android has been a key platform for us for quite some time now as we are today the biggest publisher of titles on Android Market Place. The fragmentation on Android with the number of different Android handsets launched very month made it hard for our teams to launch simultaneously on both iOS and Android platform but our teams are working hard to achieve this goal.

IN: At the moment, how big is Android revenue relative to iOS? 1/4th? 1/8th, etc.?

Vallois: We do not share those detailed numbers but we do share that our smartphones and tablets sales are growing fast (60 percent growth rate year-on-year in the third quarter of 2011) representing 34 percent of our global sales.

IN: Can you share anything about how the average tablet or iPad game compares to one on a mobile phone in terms of overall revenue, and then monetization per user?

Vallois: As this is a very fast growing market that is also going through the freemium transition, it is hard to give precise numbers.

But in terms of trends, what we can say is that the adoption rate of game on smartphones and tablets is much higher than on feature phone, as long as the shopping experience (e.g. billing for example) is the same – which makes us very optimistic for the years to come!

IN: How are you thinking about acquisitions? Would you look at buying any independent or venture-funded developers and if so, what would you be looking for?

Vallois: We are always open top bring new talent inside Gameloft, even though most of our growth has been organic for now. Those talents would need to bring an expertise: Would it bring a specific market, a particular game segment or an innovative distribution model?

IN: You recently told Gamasutra recently that Gameloft is also working on a mobile-social gaming network like GREE and DeNA. What’s going on with that?

Vallois: We are indeed working on the development of a mobile social gaming network. The target is to launch it first half of 2012. The goal is to keep enriching our fans’ gaming experience through new innovative features.

IN: How will you differentiate your gaming network? There are many, many other ones out there.

Vallois: We’re keeping this a surprise, so you’ll unfortunately have to wait to see!

IN: Will it include third-party titles beyond Gameloft’s ones?

Vallois: As it stands, this will not be available at launch.

IN: In 2011, we saw the rise of both freemium gaming and of Android (even though it still lags in terms of monetization). What are your big predictions for 2012?

Vallois: We think tablets gaming will accelerate this year with new devices broadening the consumers’ choice – of course smartphone gaming will keep growing also rapidly.

In terms of business model, we think a balance will happen between premium and freemium as we see that consumers have different tastes and games have different monetization logics. 2012 will also be the emergence of mobile gaming social networks and there will certainly be a fierce competition on this field.

IN: Beyond Android and iOS, do you see any other big platforms or stores emerging in the next year that will be strategically important for Gameloft?

Vallois: HTML5 is definitely a technology we are looking at very closely. We recently launched GT Racing:
Motor Academy on Google+ and we will keep learning about this technology. Windows Phone is also a platform we are following closely, specifically with the launch of Windows Phone 8 in 2012.

We also expect some innovation in the TV gaming space as we feel there is value to bring to consumers here. Our first experience on Set Top Boxes is very successful.

IN: How attractive are Android Market and Amazon’s Android Appstore compared to each other? How do your titles perform on a per user basis compared to each other in both stores?

Vallois: It is very early to draw any conclusion yet as the Amazon Appstore is still very new and really
took off recently with the Kindle Fire launch. Both stores are doing well for us and we are working with them to optimize their merchandising and shopping experiences which are key to maximizing the end users’ satisfaction.