Gamundo is a cross-platform game development studio formed by veterans of multiple ‘traditional’ game studios from around the globe. The company is committed to creating high-quality next-generation, accessible and commercially successful games. Gamundo’s talented core team members have produced three titles together; including the highly recognized browser based social MMO Club Galactik. In this postmortem, Ilja Goossens from Gamundo shares with us the story of how the idea for Club Galactik came to be.
The initial idea behind Virtual Fairground, my first true gaming venture, was to build online games for kids aged 8 to 12 based on existing IP. In 2007, my business partner and I were involved with a ‘traditional’ game developer and an online community company. However, we noticed a shift from console- and client PC gaming towards browser-based gaming (remember: this was before the whole Facebook/social gaming hype and before the iPhone was released).
At the time, there were some online communities for kids and some virtual worlds (the most successful turned out to be Club Penguin, acquired by Disney for $750 million). In order to become a top 3 developer of these online worlds, we had to come up with a strategy that would give us a head start. We had several options; (a) having a huge marketing budget, (b) using an important publisher or (c) using existing intellectual property. We decided to go for the latter, since this would allow us to get a user base relatively quick and to monetize aggressively.
Identifying the property
With kids entertainment you have two different target audiences: the kids (who play the game) and the parents (who pay for the game). When kids start playing our game, they will love it and want more. This is when they have to start paying for a subscription or virtual currency. Parents tend to pay more quickly when they know the brand themselves, or at least heard of it before. Go figure: would you buy a product of an existing brand, like Apple, or from a no-name tech company?
We set some criteria that the IP had to meet to be useful for our plans. A must-have was television exposure, because from our own experience we knew that the conversion from offline to online was huge in this target demographic. For example, a friend of mine is a games publisher in the ages 8 through 14 target demographic (he used to publish Runescape, amongst others) and he had a barter deal with multiple TV stations. They aired the commercials for the show and they got a share of the revenue instead. He used this as the main driver for the audience and they saw huge spikes of registrations during the TV campaigns.
The IP also had to have traction momentum in the main European countries and optionally the United States. The property needed to appeal to both boys and girls in the age group 8-12 and was preferably created by an established brand like Disney, Nickelodeon, etc.
Based on these criteria, we identified a handful of properties. We did so by attending a lot of shows and (licensing) fairs, like MIP in Cannes (a TV licensing fair), the New York Toy Fair, etc. We narrowed the selection down to the properties that had potential and we added 3 properties that were a bit off, because they were based on a book, toy line and a magazine.
Building a relationship
Now we had to get in touch with the IP owners and make sure we could secure the rights for the online game, meaning we had to start networking like crazy. We were a small startup, pre-funding, with just a good idea. Again, we started visiting fairs and shows and trying to get in touch with the right people. These were the owners of licenses such as the Smurfs, Donald Duck, Charly and the Chocolate Factory and Winx Club. These were IPs that everyone knew and had an established value. Our pitch: we can contribute to the success of your IP, we will drive traffic to the offline components of the product and we will create an additional revenue stream. And to make it a really good deal, we will pay for the development ourselves!
Once we established a relationship with the IP owner, we could start negotiating the deal terms. Back in 2007 and early 2008, online game were not that hot yet. But we wanted to be able to build our own product, not just build what the IP owner wanted. This is why we did not continue the Disney deal (we were quite far in the process already).
There is a funny story related to the Disney deal though. We knew the online director from Disney; he was located in Burbank, CA. We told him we were ‘in the neighborhood’, but we were not even in the US. After making an appointment for a casual chat and a cup of coffee, we booked a plane ticket from Amsterdam to Los Angeles and flew in just to meet with him. Building a relationship with the IP owner is the most important there is. If they have the idea that you know what you are talking about and can deliver quality, that will be so much more valuable than a bag of money. A brand like Disney cannot afford a mistake, a bad product or complaining customers. They fully need to believe that you can deliver what you promise.
In the end, a company like Disney has many, many rules and regulations for the IP, so in the end it felt more like we would be doing work-for-hire that we had to pay for ourselves, instead of building our own product.
We had some great ideas for potentially successful properties. After negotiating with the owners of IPs like The Smurfs, Charly and the Chocolate Factory and Donald Duck we settled with Alphanim. Our job was to create an online game based on Galactik Football. The show was a hugely popular cartoon series on Jetix, aired in almost entire Europe. At that point in time, two seasons had been aired and season three was in development. Besides, the show was about football and the World Cup of Football was coming up. Our timing couldn’t have been better.
Negotiating the deal
To close the deal regarding Galactik Football, we had to negotiate the terms. Of course, this is a very complex and lengthy process that needs professional guidance. We decided to hire an attorney that was specialized in intellectual property, so he could support us to get the best deal and warn us for the pitfalls. There are two main points to discuss: financials and content. The financial part is about (upfront) minimum guarantees, revenue share, and marketing- and development budget. This is a necessity, but can be pretty straightforward. The discussion about the content is a whole different aspect, here you have to convince the IP owner that you will do justice to their product, create length, create an additional value and can deliver a game with the same quality and look and feel as the original product.
During these negotiations, we established a very good relationship with the IP owner. Regular visits to each other’s offices and meetings with the marketing, creative and development teams were an important part of the process.
The concept for Club Galactik
The initial concept was to create an online game with lots of real-world extensions and a presence in the TV series. We would create a training school for talents and call it Club Galactik. To create the feeling that all players were also part of the TV show, we had written a story line in the script that contained the school. Now every player of the game immediately became part of the TV series. Together with the creators of the cartoon, we designed a logo, characters and a space ship that were used both in the series as well in the online game.
Alphanim would produce a trading card game, convince the broadcasting stations to implement the game into their websites, organize real life events and create connected merchandize. This way we would be responsible for the online product, and Alphanim would take care of the physical products and the marketing and distribution. Unfortunately for all parties, it didn’t become the success we all hoped for…
We depended heavily on the conversion from offline (TV) to online. Unfortunately, Disney acquired Jetix just before we released the game and decided to cancel the show because this was a third party production. (They rebranded the channel to DisneyXD and only programmed their own productions.) The IP was not strong enough to kickstart the distribution of the game, but we still had to pay a yearly licensing fee, so we decided to cancel the game even before the full version went live.
To see what projects Gamundo’s currently working on and what other games they’ve done in the past, have a look at their website.