Kapooki gets on top of its game

26 Aug 2004

Sited above the Dragon tattoo parlour on Talbot Street, Kapooki can never be accused of blowing investors’ money on a glitzy corporate HQ. This probably reflects the fact that the games developer was founded in 2000, around the same time that the dotcom industry was imploding. Since then, austerity rather than extravagance has been the byword of the technology industry.

Kapooki’s first serious gaming product was Lorgaine, an online multiplayer game based on Irish mythology, which it published on the internet in 2002. The company is now gearing up for its first major launch. It has developed a mass market consumer title for PC/console (Xbox and PlayStation), which is slated for release in the first quarter of 2005. For competitive reasons, the company will give no details about this new title, save that it is currently in negotiation with several games publishers and that it hopes to have clinched a deal by the end of the year.

Kapooki was founded by a group of five software engineers. CEO Michael Griffin had just finished his masters in information systems at NUI Galway, while the other four founders were ‘graduates’ of Sun Microsystems, Iona Technologies and Riverdeep. Kapooki’s largest investor is Campus Venture Capital, which injected funding of €500k in April 2000. Other backers include Enterprise Ireland (EI) and a number of private investors.

Kapooki’s first years in business have been anything but easy. The games industry was hit hard by the downturn in the technology sector. The low point for technology spending worldwide, and the toughest year for Kapooki, was 2002. “It was ridiculously tough,” Griffin recalls. “IT was not the flavour of the month. There was a very poor understanding of the difference between computer games development and the general IT market so we had to spend a lot of time educating the market about what we did. But the industry has enjoyed phenomenal growth in the past two or three years since.”

Griffin likens games development to car production: for every game you launch you should have several more in the pipeline. Griffin is hoping that Kapooki’s new game will be the breakthrough the company has been waiting for, but he is not getting carried away. “We feel the game pushes all the buttons for a mass market franchise but there are a thousand other ships out there that believe their chances are very good and that then end up on the rocks. We are very confident but it’s still a challenge,” he says pragmatically.

The holy grail, he explains, is to produce a game that captures the public imagination and becomes a brand in its own right. This then spawns sequels that provide the cash for the developer to expand its portfolio. For this reason, Griffin is a firm believer that intellectual property (IP) is the crown jewels of any games developer. “If you’re just an ad-hoc developer appointed to build a game by a publisher, once you’ve built the first game there’s no guarantee that you’ll be asked to build the second or third one. Having your own IP means that when you build a product, you usually have that franchise going forward,” he explains.

But even this is not guaranteed. For example, Core Design, the company behind Tomb Raider, produced such a poorly received fourth sequel that it was dropped by its publisher from producing the next in the previously successful series. Such cautionary tales have helped Griffin to stay grounded about his business and remain aware of the many possible pitfalls.

Kapooki is one of a small band of Irish games hopefuls that has sprouted up in recent years. Other members of this loose confederation of gamers include Havok, Demonware, Eirplay Games and Donegal’s Torc Interactive. Griffin sees a bright future for an industry that has been identified by EI and others as a key growth segment with Ireland’s digital technology sector. But he notes that the sector faces intense competition from other countries such as Australia, Canada, the UK and South Korea, which have poured millions of dollars into their own games industries.

He feels that the profile of the Irish games industry could also benefit greatly from a large-scale government funding effort. “When game publishers see that a country’s games industry is getting government support, they get an added feeling of security,” Griffin states.

While it has been getting on with the technical and creative business of producing games, Kapooki has also been venturing into enterprise applications. It has developed and launched a product called the Kapooki Satellite, a software tool that enables information, such as share prices and holiday information, to be pushed to subscribers’ desktops in line with their pre-stated preferences. The system has already been deployed by the National Lottery and Kapooki is in discussions with several other customers. “If the product performs well, we may decide to spin off Kapooki Satellite into another division within Kapooki,” comments business development manager Ivo Meekel.

But games development remains Kapooki’s core activity. While the potential rewards for successful companies are mind-boggling, so too is the competition and Griffin is keenly aware that Kapooki is just one of thousands of developers looking to establish themselves in a global industry that is estimated to be worth between US$18bn and US$20bn annually.

“It’s a cruel and vicious world out there in the games production business. It’s full of highs and lows, and you’ve got to be willing to take the knocks and get back up and keep going.” He adds with a laugh: “It’s certainly a lot more fun to play them than it is to make them.”

By Brian Skelly

Pictured are Kapooki CEO Michael Griffin with Ivo Meekel, business development manager