Interview: HandyGames talks innovation, aggregation, and erotica

Life should be sweet for German publisher HandyGames. Several of its rivals have been acquired, shifted focus or dropped out of the industry altogether, allowing the company to increase its market share, and expand other elements of its business, including aggregation.

Yet, as CEO Christopher Kassulke explains, the travails of rivals isn't all good news. "On the one hand, it's good, because we're getting market share at a time when it's really hard to do that," he says.

"Just ask EA or Gameloft how much it's costing them to get a bigger market share. Yet on the other hand, it's very bad, because it shows the industry is not really healthy at the moment. Of course, those who are struggling are either funded by a lot of venture capital, or they're big companies who don't have their costs under control."

If you've met Kassulke in the flesh, you'll know he's not the shy and retiring sort. Indeed, it's clear he sees himself as an entirely necessary thorn in the sides of the Big Three mobile games publishers.

"Innovation comes from small and mid-sized developers, while the big ones make the sequels and big brand games," he says.

The big publishers would certainly disagree with that verdict, arguing that the revenues from those sequels and branded titles give them the clout to innovate in other areas. But the real question is whether the operators agree with Kassulke that innovation also comes from the smaller firms. Their policy of squeezing many of these out seems to imply not.

"It doesn't work, though," he says. "I don't know a single operator that's making more downloads because they squeezed down their number of partners. They just end up with no innovation or variety for the consumer. I see us as a much more flexible partners for operators."

That's a partnership that's increasingly seeing HandyGames take on the role of an aggregator – something it's also doing for Sony Ericsson's PlayNow Arena portal. The company's been taking on these kind of partnerships for 2-3 years now, says Kassulke, but is now expanding that side of the business.

Is he tempted to split HandyGames into publishing and aggregation divisions, as Player X has done recently? "No, we don't want to split it up," he says.

"There is a huge demand for the publishing/distribution kind of model. There are a lot of aggregators out there, but they are aggregating 1,000 games at once. That's not what partners really want from us – they want to have the trust in us that we won't sell them any bad games."

Ad-funded benefits
HandyGames was one of the first sizeable mobile games publishers to investigate ad-funded games, so how's that going?

"We're not only using it as a revenue stream, but also for data monitoring," says Kassulke. "We can tell when people play these games, and how often they're playing. And of course, we can then use that information to take to the operators."

HandyGames is also distributing its ad-wrapped games on Nokia's MOSH community – a service that Kassulke (like many other mobile publishers) has distinctly mixed feelings about.

"It's an illegal site," he says. "If you go there, you can find games by nearly every publisher. But of course, we cannot sue Nokia for that. So we have to use it positively, which is what we do. We upload our ad-wrapped games there, and make a little bit of money."

However, Kassulke says he is wary of promises of big revenues from these kinds of free distribution channels, not least because those revenues are dependent on people then playing the free games often.

"Most of the guys who are downloading games for free aren't really playing them that much," he says. "They are more or less collectors, happy if they have 3,000 games."

From Bible to babes
Kassulke says HandyGames is also keen to bring in new mobile gamers, for example with The Great Bible Game, due for release later this year. The same principle (albeit in a radically different area) applies to the publisher's work with erotic games, such as Dr Kamasutra Sextrainer.

How big an area is that? "There's a huge demand out there," replies Kassulke.

"But you have to be doing games in that sector to truly understand what consumers want. It's true that there's a difference between a good quality game on the normal operator deck, and what's in the erotic section. Nowadays, people want high-quality slideshow type games with different effects. Although we may have some motion-sensing in there sooner or later."

HandyGames is certainly open to experiments – besides ad-funded, biblical and erotic games, the company is investigating DS as a platform, while keeping an eye on what's happening in social gaming.

But ultimately, it comes back to mobile – "that's where we're making the money" – and the company's intention to stay independent.

"People talk about all the independent mobile games publishers leaving the industry, and there being no one left, but we are here saying yes, there is still one independent publisher!"

Plus Glu, surely? Kassulke gets a mischievous glint in his eye.

"Yes, but for how long?"