Having sold his games-software company, DemonWare, to Activision for $15 million three years back, Dylan Collins recently scored another coup when GameStop made a major investment in his internet games company, Jolt Online.
Last year, Jolt received much acclaim for striking a deal with Hugh Hefner’s Playboy empire to publish an online game called Playboy Manager. Are traditional media companies looking for new ways to monetise online?
The challenge a lot of the print media companies are facing is that the revenue that existed offline historically cannot be replicated online. What a lot of them are getting into is the business of licensing, so as to drive revenues from their brands.
Obviously, gaming is a pretty significant revenue driver in and of itself, so if you have a brand that will work for a gaming demographic it makes a lot of sense to go there.
Our business model is premised to a certain extent on licensing brands from these companies and turning them into games. It’s kind of win-win for them and us – they get a royalty cheque, we get a game and a brand to drive profit.
Jolt is very much an internet company. Have the costs of starting an online business come down significantly?
It’s cheaper than it has ever been to start a business online and, given the internet’s penetration globally, every day the market grows bigger.
What we have seen over the last 10 years is huge commoditisation of services like hosting, processing, even advertising services, and that has definitely helped start-ups.
The cost of starting a company in the internet space, of getting something up and running and into the market, is perhaps 1pc of what it was 10 years ago. So it’s a great place to be and it’s definitely an area that is accessible for people starting a business.
With all the talk of high-potential start-ups in Ireland, is enough attention given to the potential for online gaming as an export industry?
It’s one of those unreported truths. Ireland is one of the biggest online gaming hubs in the world, most people just don’t know it. If you factor in the online games companies that are here – ourselves, Blizzard, Gala Networks and so forth – and you add in the online poker and casino companies, we have become one of the biggest online gaming hubs in the world.
It’s an area where there’s a huge amount of opportunity. It’s there, it’s scalable, there’s a business model behind it – it works. I think the growth predictions for this year for online gaming are 15pc, while if the rest of the world breaks even it’ll be happy!
Has the whole area of cloud computing been part of this commoditisation you mention?
Virtualisation is, I think, a much more accurate description of what cloud computing is. What it means is that hosting has become a lot more flexible and you no longer have to get signed into 12- or 24-month contracts, again making it easier for start-ups.
Not that in my view it would be as much of a game changer as, say, Google’s ability to host your corporate email. That’s probably a much underrated service that has utterly changed how small companies look after their email.
Previously, they would have paid some hosting company a sum every year. Now that’s all changed. That’s a much more directly applicable example of the commoditisation of some of these services that are out there.
It’s definitely the biggest companies like the Googles and the Amazons who are leading this charge because of what you can produce with an infrastructure of their scale. Some of these developments that are not seen as big stories in the media actually have much more impact for the SME than those that get the attention.
Dylan Collins will be speaking at the Digital Landscapes conference, which takes place on Wednesday, 3 March, 2010, from 7.40am-12.30pm at O’Reilly Hall, Belfield, UCD. For further information, or to book, visit UCD’s Growing Ireland website or phone 01 7168050.
By Ann O’Dea
Photo: Dylan Collins, CEO, Jolt Online Gaming