A PRODUCER of video games for mobile devices is on track to double revenue to more than £30 million one year after becoming profitable for the first time.
In the year to December 31, Dundee-based Outplay Entertainment recorded a 146 per cent uplift in revenue to £15.6m and turned a £890,000 pre-tax loss into a £687,000 pre-tax profit.
Co-founder Douglas Hare said the turnaround came as a result of an increased focus on the part of the business associated with servicing the games.
“It took a while for us to hit our stride and I think you really saw that come together in the 2016,” he said. “It started the year before but the real effect manifested itself last year when we could grow the audience and grow the revenue generated from the audience.”
He said this would continue in 2017, aided by the input from Derby-based Eight Pixel Square, which Outplay acquired in December 2016.
“It would be challenging to mirror last year, but it’s not out with the realms of possibility. We are looking at the range of doubling revenue,” said Mr Hare.
Mr Hare established the business with his brother Richard in 2010, backed by venture capital funding. It initially built games to be integrated into social media platforms like Facebook, before launching its first mobile app game in 2012.
Prior to setting up the business the brothers had worked in California, where they built up games company The Collective before it merged with Backbone Entertainment to create Foundation 9 Entertainment.
Outplay currently employs 175 staff in Dundee, while a further 43 work at Eight Pixel Squared.
The company currently has seven games in the market, but unlike console games the shelf life of mobile titles lasts for years, with revenue dripping in through in-game purchases.
Its most recent release, Castle Creep, was launched in January and had been downloaded more than five million times by the end of June. Three further titles will be fully launched before the end of the year, having been soft-launched in specific countries to allow programmers to assess and refine the user experience.
One of these will be the first to come out of Eight Pixel’s studio since the acquisition, and it is a game which excites Mr Hare.
“It’s unlike anything we’ve ever done before,” he says. “Based on feedback we’ve received from industry people and our own personal belief in it, we’re pretty bullish, but you just can’t tell until players start playing it in the wild.”
Mr Hare said the constant refinement of its portfolio would sustain and accelerate sales growth.
“We’re in the process of refining the things that the player never sees, whether it’s bringing players in, managing them in games, cross-promotion, how you chose to analyse the abundance of data, how we create features that may increase revenue.
The company’s business model allows users to download games onto their mobile devices for free and then pay for tokens or additional content.
Mr Hare conceded that giving away products was a model which was often misunderstood, but added: “The moment you put any price on an app it’s a fact that fewer people will download that app. It’s far more important to have as many people come in as possible.
“Even if they don’t spend money, they play your game, possibly for years, and the next time you launch a game they are still there and you can promote to them, they may download that game and potentially spend money on that. It’s all about engaging and retaining an audience by providing something that fills their day with little moments of delight.”
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