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American McGee's Spicy Horse Gets $3M Funding, Signs PopCap Deal
American McGee's Spicy Horse Gets $3M Funding, Signs PopCap Deal
May 13, 2011 | By Christian Nutt

Today, the Shanghai-based studio Spicy Horse, which has completed work on Alice 2 for EA, is announcing that it has secured $3 million in investment from Singapore and Shanghai-based Vickers Venture Partners.

The company, from this point forward, will focus on developing 3D social, online games for a global audience. Spicy Horse is working on its first post-Alice 2 project alongside PopCap's Shanghai studio -- a 3D online version of one of the casual titan's games, to be launched initially in the Asia/Pacific region.

"The sense is that while a lot of social games have built their empires on 2D, there will be a moment where the genre has to shift into 3D, and we want to start that process now," McGee told Gamasutra via phone from his Shanghai HQ.

Spicy Horse's direction is "definitely going to be about free-to-play online multiplayer games," which McGee is "much more excited about" than packaged console titles, he said. Spicy Horse wants to "prove that experience can translate to 3D, and maintain that casual audience -- so we want to be there as that wave starts to come up."

Said McGee, "The reason I originally came to China is that I wanted to get into that new model -- I wanted to get away from console game production and retail, disc-based sales." In other words, Alice 2 was a "beautiful distraction" from the company's true focus, in his words. While he expects the title to be a success, the studio is pursuing "new style development, new style monetization" here on out.

While it took the team two years to create Alice 2, he expects Spicy Horse to develop a "game every six months or so" from this point forward -- or five games, at a minimum, over the next two years.

This funding "allows us to execute on a two-year plan to bring multiple titles to market," said McGee, and that's "ignoring that we might even make a profit off of Alice" or the titles the company launches during that period.

The team -- which has seen a "significant restructuring" from a peak of 75 members to closer to 55 in the wake of the organizational shifts necessary for this style of production -- will return to the "very fluid and dynamic" and "very efficient" methods it pursued when developing episodic title Grimm for the GameTap service, in McGee's words.

"It has not been terribly painful; it's been a good transformation, and it feels like a much more efficient organization," McGee said. He expects the studio to "do a lot more stuff, and maintain a much healthier work culture with fewer people."

While he can't disclose details of the PopCap game, he said it's "a perfect example of the kind of games we're going to be working on." It's free-to-play, it will launch initially in Asia, it's multiplayer, and it's microtransaction-driven. "It's got all of those hooks in there," McGee said.

The studio will pursue PC multiplayer online, mobile device -- primarily tablets -- and social network games. Beyond the PopCap deal, McGee is speaking to many of the "established players" in the free-to-play market, including those who market client-based games. "With some [games] we want to go straight to Facebook and publish straight to Facebook," said McGee. Spicy Horse has "one unified platform technology" which will drive its titles.

With the investment and the tech and experience it builds up over the next two years, said McGee, "We can be viewed by those existing operators as a potentially smart acquisition -- because we've illustrated we can make that transition."

In a statement to Gamasutra, Joe Grillo, managing director of investment banking at Wedbush Morgan, who helped Spicy Horse with the deal said, "It was a pleasure to work with Spicy Horse. The company has extensive experience and a truly unique culture. The new partnership with Vickers will allow Spicy Horse to bring even more groundbreaking product to market."

"Spicy Horse is well-positioned to become a major player in this new wave of 3D online casual games that will be the next big thing for gaming," said Jeff Chi, managing director at Vickers Venture Partners. "Spicy Horse has an experienced management team with world class 3D game development capabilities and a vision that sets the company on the frontier of online gaming both in China and globally."

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Tim Carter
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Basically, it's American McGee.

Jane Castle
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What the heck is that supposed to mean?

Tim Carter
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It's American McGee and any key developer in Spicy Horse who cares to self-promote.

We should be promoting people. Key creators should be self-promoting. Promoting people gives strength to game creators as a whole. Promoting companies does not.

Companies come and go. Key creators last.

(At least that's been the case in every other major art form. Does the game industry wish to be accepted as a major art form?)

Tom Bednarchuk
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Said McGee, "The reason I originally came to China is that I wanted to get into that new model -- I wanted to get away from console game production and retail, disc-based sales."

Really??? Or is it that you can get developers on the cheap? Why not Bangalore?

Nicolas Godement-Berline
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I can't believe we're still seeing such comments in 2011. Wake up !

The new F2P/Social model DID expand first in Korea and China (ex : Happy Farm "inspired" Farmville)

And there is absolutely no comparison between the Shanghai and Bangalore games industries (other than wages, yes, perhaps).

Tom Bednarchuk
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Hmmm so you HAVE to go the China to take part in the F2P/Social model? Somebody better tell Zynga. Yes they have studios there but they didn't start there. Let's face it, a piddley $3 M will go a very long way in China as opposed to the US.

American McGee
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The reasons for moving to China were much more complex than just wanting to be close to a thriving online game economy - though for the purpose of this announcement, that single reason seemed appropriate. To expound on the other reasons, I'd need to write a book. And it's sad that these sorts of "you're un-American for leaving America" reactions still exist in today's hyper-globalized world.

A few other reasons for my leaving the US, for the record: George Bush had just "won" the 2nd election, and I'd already told myself and friends that I'd find a way out if that happened again. The idea that a business in the US and its employees helps bankroll ongoing destruction of foreign countries to the tune of 40% of each tax dollar. Living in LA and spending 3hrs a day commuting. Damaging prevalence of religious nonsense in a supposedly secular country and government. A desire for adventure in new places. Yummy Chinese food. Exposure to a new culture, language and mode of living. I could go on...

In any case, I believe it's difficult to understand until you've done it (lived outside your home country) for some time. It's too easy to reduce down to "you went there to save money on production". And yes, there's a saving associated with it - but it's not clear to me how that's "bad" to you or the people (myself included) working here, seeing as how there's a saving associated with every item around you which is manufactured somewhere outside your local economy. The people working in our studio are highly skilled and highly paid - and on a scale that's not relative to China in general, but to the booming local market economy in Shanghai.

Things are cheaper in many ways, but the US should be finding way to emulate those things, not deride them. 10+ million people in Shanghai ride bikes or electric scooters to work each day. A huge portion of consumers still shop in local wet markets and independent grocers, which connect directly to the farmers whose fields ring the city. Public transportation is HUGE here, with Shanghai having the largest subway system in the world, efficient and (deadly) silent electric buses and an inter-province fast rail system that's one of the fastest in the world. Taxation isn't out of control, and the PRC government has a vested interest in improving the infrastructure of cities and lives of citizens living within. It's a very optimistic time to be here and witness of all of this.

If it were just about "cheap", then the quality of life for myself and the other people in our studio wouldn't allow for the equation to work. So, I hope that helps illustrate more of the thinking behind the decision. I know the reasons are similar for a lot of the other foreigners working in our studio - people from Canada, France, Britain, Brazil, Nepal, Australia, Belgium, Holland, and the many far flung provinces of China outside Shanghai. We're all pretty happy here - come visit and we'll give you a tour ;)

Emil Johansen
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The world sucks and shines in so many different and exciting ways and places. And then there's the people living in it...

In other news, I'm looking forward to this new project.