In the burgeoning mobile business, Glu is an interesting entity, part of the small group of top-tier mobile-only game publishers. Formed as a marriage of mobile firms Sorrent, Inc, and Macrospace Ltd, utilizing licenses such as Fox Sports and Cartoon Network in a diverse product portfolio, and receiving $27.5 million in its latest round of venture capital (including a notable investment from Warner Brothers), Glu is in a strong position to take advantage of mobile gaming's growth spurt.
What's more, Glu president and CEO Greg Ballard has a fascinating history in the electronics and video game industry, with experience ranging from his time as CEO of 3Dfx, as well as CEO at SONICblue, maker of the Rio digital music player, to his presidency of Capcom USA, and even a time as COO and CFO of the infamous Digital Pictures. We spoke with Greg at length about his thoughts on how to get good deck placement for mobile games, development cycles, shaky ventures, and gaming controversy.
Gamasutra: How and from where did Glu originate?
Greg Ballard: It was one of the first companies founded in the whole mobile game area, long before the whole download had even originated, when it looked like it was going to be a WAP business. It was founded [as Sorrent] by a couple of guys who left Electronic Arts, pretty senior guys, in fact Scott Orr, who was kind of the chief founder, if there is such a phrase. He was the guy who was responsible for the John Madden Football franchise, and had run a number of the bigger sports franchises at EA for a number of years.
He got to the position where he wanted to do something different, left EA, and came up with the idea of doing games for cell phones, which at the time was a pretty radical notion. He raised some money, some initial seed funding from a senior guy at New Enterprise Associates (NEA), which is one of the leading venture capital firms in the valley, along with a couple of the other venture firms, and now here we are four financings later, raising some $27.5 million this round, for $58 million total, so it's come a long way.
Now, I joined the company in October of 2003, so two years after it had been founded, and nearly two years ago. My job was to, basically, take it to the next level. At the time the company was focused very much on sports, and almost entirely focused on the U.S. I believed then, and in retrospect, it turns out it was one of those rare moments in my life where I was right, that we needed to be in more areas than just sports, and that we needed to be in more countries than just the U.S. So we embarked on a campaign to become diversified in products, and global in range.
Gamasutra: Who do you consider your major competitors in terms of mobile-centric publishers?
GB: I would say the clear leader is Jamdat. We have a lot of respect for them - they've pioneered a lot of things in the business that we think are good, and they are the company that we talk about most often as being our leading competitor. But I would also put in that category Gameloft, the Ubisoft spinoff, because we think that they've done a very good job of building a business around mobile. And then there are a whole bunch of companies that are with us in the sort of third place range. We think of ourselves at third place, but we may be fourth… Mforma, though they are not exclusively [creating and publishing] mobile games, is another company we pay attention to. The list drops off pretty fast after that, I mean there's THQ, but again, they're not a pure mobile game company, so there's not a lot after that in terms of competitors that we focus on.
Gamasutra: How easy is it for you to get games in with carriers, and onto phones?
GB: It's harder than it used to be. It's not as hard for us as it is for smaller companies. We've built a pattern of creating really good games that have been successful. So on those rare occasions where a carrier tells us that they don't want our game, typically we can go back in and tell them why we think it's going to be successful, and point to other games like it that we have done that were successful. We get the benefit of the doubt more often than not, because of our track record.
That's not to say that it isn't difficult, but we made a decision three years ago, even before I came on board, that we were going to always position ourselves at the high end of the market - we were going to try to make the best games. Now we might not always have the best game out there, because it's a creative endeavor, and sometimes you don't create as well as other times. But our culture is all around building really great games, and if you do that, it almost doesn't matter if it's a good brand or a bad brand, you're probably going to get it on the deck. Now, it may not sell as well, but the carriers, when they play it, they'll realize that you put a lot of work into it, and that it's a quality game and it's not going to embarrass them.
Gamasutra: Speaking of the deck, how do you get good placement on the list of games within the phone?
GB: Well, you get in there through a number of different ways. Sometimes it happens because you just launched a title, so it's in the ‘what's new' category. Now, the ‘what's hot' only happens if you have done well with that title. You have to be in the top 10, 11, or 15, depending on the carrier, so some you earn by sales. Then there are some that are at the discretion of the carrier – they look at the game, they look at the marketing support behind the game, they look at what the publisher is doing with the brand elsewhere, and they say “OK, we're going to focus and put this on the hot list” or whatever the feature list is called, and that's something that's a function of relationship, and also your sales pitch to the carrier.
Gamasutra: How much do these games cost, generally, and is it a major factor in terms of what people are buying?
GB: Our games typically cost $6.49. We've tried to raise the price various times, and we've found that it does have a negative effect on sales, so yes, price does matter. On the other hand, in our research we've found that people are willing to pay that amount and maybe a little bit more for an experience that they consider to be worthwhile, so price does not seem to be a huge inhibitor to people buying, but I think we're pretty reasonably priced right now.
Gamasutra: What are your most successful titles, in terms of sales volume?
Driver 3, Glu's most successful title yet.
GB: Our most successful of all time was Driver 3 [over a million sold in the U.S.]. Behind that is Deerhunter in the U.S. only, and Who Wants to be a Millionaire, in Europe only. And then we've had other titles like Zuma, that's currently a hit, but hasn't got that lifetime record that Driver 3 has, but is on a trajectory to get there. We have done very well with Fox Sports Mobile, which is an information application, not a game, but that is consistently in our top 5, and right now it's probably number 3 overall for us. We have also done well with a couple of our movie titles, Fox Sports Football is a big title for us every year, so one of the things I think we've accomplished in the last year is that we're not dependent on any one title as say Jamdat, who is dependent on just one or two titles – now Tetris, and it used to be Jamdat Bowling. We have a much wider breadth than they do, and it makes us a little less vulnerable should any of those titles go away.
Gamasutra: Do you feel at all threatened by film companies coming in and trying to use their own film licenses now?
GB: We always pay attention to those kinds of developments, but this is a pretty tough business for someone to be in. And it's hard to dabble in this business. So Fox Films, for example, has chosen not to get into this business directly, at least for the time being. They've licensed all of their leading films to us, because they looked at it, and they said it's too complicated, and will take too much investment for them to build a business, so we'll just license these off, and get the check from Glu every quarter and be happy with that. Warner has taken a different approach. The jury's still out on who's taking the right approach, but at the end of the day, it's a big business, and there's room for a lot of us to be players.
Gamasutra: Where is your development based? Is it mostly in America?
GB: Actually it's about half and half. We have a studio in London that's almost as big as this one – and if you take out the corporate people, it's probably as big as we [in the San Mateo, Calif. studio] are. And they produce just about the same number of titles each year as we do.
Gamasutra: And I understand you have some development in Asia?
GB: We do have some in Korea – we've taken some of our titles that have done well elsewhere, like Robots for example, and done a Korean version at a studio in Seoul, but for the most part we don't have a separate studio there.
Gamasutra: Do you feel that original IP is important to Glu's future in mobile, or are licenses going to be the main business for a while?
GB: We continue to believe that it's mostly going to be licenses, although we have invested in, and continue to invest in original IP. So, maybe 25-30% of our business is original, in the U.S. We have Daily Puzzle, which is a subscription service which provides you with a daily puzzle, we have five card poker - both of those titles do very well, and putting a brand on them wouldn't necessarily make them do any better.
In the UK we have a fair number of original titles - Ancient Empires II, Cannon Tournaments, Blackjack Hustler. They've done a very good job of creating licensed product, but even there, despite the success of Ancient Empires II, and some of the other titles I've mentioned, the top title over there is still Who Wants to be a Millionaire. Their number two title has typically been a Cartoon Network title. So you can do a really good job on original IP, and still find that the licensed stuff does better, because that's what consumers and carriers are more comfortable with.
Gamasutra: Do you find the European and U.S. markets to be significantly different?
GB: Quite different. And it's interesting – I wonder if it's not the case in the console market as well, but nobody has ever really been able to separately address the two markets, so we've never really seen it. Here, we can do a European-only title that's completely affordable, or a U.S.-only title. And one of the results of that is that we can look at what our studio in London puts out versus our studio in San Mateo, and they're different.
Ancient Empires II, one of the biggest problems we've had with that title is that we forgot to think through the QA time it was going to take – because it's 40 hours of gameplay! So our QA schedule was based on a normal game, which has maybe a couple of hours of gameplay. And here you have a 40 hour game, and it just sort of blew through all of our numbers on QA. And we hadn't thought about it. But that game, while we're going to try and sell it in the United States, is not a natural thing for U.S. customers to play - a game that's that deep and complicated.
Gamasutra: Why do you think that is?
GB: I just think that we're at the first stage of the business. I think it'll change, but a lot of gamers aren't in the market yet. But I think they're the natural next big wave.
Gamasutra: Do you have any plans to branch out from the mobile space?
GB: Not from the mobile space – I'll never say never, but you're not going to see us going too far astray. I don't see us going into PSP, or Nintendo devices. It's conceivable that we would do something on the web, for example, as a way of creating original product on the web that moves to mobile. But not too further astray than that. The rumors that we're going to buy EA are vastly overstated! *laughs*.
Glu's Cartoon Network-licensed Foster's Home: Balloon Bonanza
Gamasutra: Do you try to target specific markets with games?
GB: Yeah, we do. We have a graph that we use internally that takes all of the different demographics, and even the psychographics and then matches them up with the titles we have, for 2006, for example. We look at that, as well as all of the categories on the deck. And we're constantly looking and saying – “you know what? We don't have anything right now for the 18-28 year old woman.” Then we sort of move some things around. Then we'll look and see that we have nothing in the board game category, or TV show category. So we're looking at those in a much more sophisticated way than we were last year, and we're making those kinds of decisions.
Gamasutra: What kind of percentages do you like to have, if you can say?
GB: We like to map pretty closely with the percentages that sales represent on the handsets. Like the casual market has gotten much bigger, so we've increased our sales of casual games. We have some gaps – we don't have a lot of retro, we don't have a lot of board games, we don't have a lot of casino games, so we're working in some of those areas.
Then we have an over-representation in other areas – films for example, because of the Fox relationship. So we look at all of those things, but at the end of the day you have some constraints that come from your licensing relationships, or lack thereof, because you can't create original IP that's retro, for instance, almost by definition.
Gamasutra: Do you think it's useful to time releases with certain events, thinking specifically of Glu's Bush vs. Kerry Boxing?
GB: Yeah, I wish we could come up with another one like that. It did fabulously, and it was almost entire profit, because we just used our boxing engine, and the game, from concept to execution was three weeks. Literally one of our producers says “Hey, how about…?” and that day we had a staff meeting, it was presented, we all jumped up and down and said: “Yeah, let's do it.” Three weeks later the game was being shipped out to the carriers. But you know what – I don't know if that'll ever happen again, that was pretty special.
Gamasutra: What's it like coming from the console space to the mobile space, considering you worked at Capcom and served on THQ's board?
GB: Well, I've spent a fair amount of time in the mobile space. I like it better here [that in console], though. In fact, when I was talking to Robert Nashak [senior VP of production] about his coming onboard as the creative head of our studio, he was coming from Acclaim, and I was using some of the same arguments that I had found exciting for me. 18 month development cycles for a videogame can be a real bummer if you don't like the game that you're working on. Or if you feel like the project's not on track, it's a long time to be stuck on one. Whereas here, over an 18 month time period, these folks will do probably five or six products. And each one of those products will advance their knowledge and understanding, and any mistakes they made on that product, they'll come back and do it differently the next time, and better the next time.
Same thing with jobs – I change jobs a lot. But I know that you're more able to apply your knowledge you gained on a job to the next job than you are at the current job, because you sort of get into a rut, and you can't change. But boy – you get to that next job, you look back, and you just organize yourself differently and do different things. I guarantee that by the time you've finished your sixth game, you have changed your behavior, learned more, adapted more and improved more than the person who's on an 18 month cycle with a video game.
I like the fact that the games don't cost a lot, so you can take fliers. We did Jamaican Bobsled, which frankly was pretty controversial here. Nobody knew if it was going to be a good game, or a bad game, or what the heck we were thinking about, but I am delighted that we're able to go off and do something that's sort of wild and crazy and different, and a little bit of a flier. You can do that when it costs you $150,000 to do a game – it's really hard to do that when it's a $15 million game. So I think that means there's more room for creativity in this business, and less penalty for failure. And I think failure's a cool thing – I've specialized in it for much of my career! You know, if you can't fail, you can't really succeed.
Gamasutra: As a complete aside, what was it like working for Digital Pictures [notorious early ‘90s ‘Hollywood/gaming' crossover firm which created the Congress-condemned FMV game Night Trap]?
GB: I'm not sure you could print it! Digital Pictures was not my worst career experience, but close to it. It felt like I was on a Greyhound bus, and the rest of the world was flying on a jet. I mean we were trying to develop a technology that was clearly losing, while everyone else was discovering the vast joys of 3D technology. I mean, we were trying to make zombies move around in a movie, and make it good gameplay, when everyone in the building knew that the way to go was 3D. But we had a founder who was intractable, and ego-bound, and unwilling to listen to those around him.
Gamasutra: Digital Pictures seemed to get in legal trouble a lot as well.
GB: Yeah, it did! And frankly, I left because I didn't want to be associated with it.
GS: So, no chance of a Night Trap for mobile?
GB: (Laughs) Well I will tell you – you know Paul Eibler, who runs Take-Two, and who I've known for years and admire greatly. I happened to be visiting him socially in New York when all of this most recent Take-Two stuff [regarding the ‘Hot Coffee' mod] was going down. And I was able to give him a great deal of comfort, because I knew all about how it would turn out, because Night Trap was the precursor to all of this stuff. And you think about how tame Night Trap is now, in comparison to the stuff that even my 10 year old daughter sees on a regular basis, it tells you a little bit about the changing mores of our society.
Night Trap - the GTA of the '90s?
Gamasutra: Didn't Night Trap get in trouble with Congress?
GB: Yeah, actually that was the basis for the whole rating system. Though at the time there weren't ratings, and it just got pulled off the shelves in a lot of places. It was Joe Lieberman who led the charge on that. And to the credit of the people – I wasn't actually responsible for Night Trap, I came in on the aftermath of it – it actually had a lot of good that came out of it. It was, as much as anything else, what caused the IDSA to get formed, and the ratings systems to get formed, and… it wasn't the entire reason for their formations, but it actually ended up being a good thing for the industry as a whole. I'm actually a fan of the rating systems, I think they could probably be improved, but I think it's a good thing for the industry to have ratings, and that led to it.
Gamasutra: So that's a no then?
GB: No mobile Night Trap! It actually was a pretty good game though – we had a couple of games! I mean, I make fun of the corpses, but Corpse Killer was actually kind of a fun game. It's just that we took the genre just a little further than the genre wanted to go.
Gamasutra: Some people do have some nostalgia for that era, there are some small ventures that get the licenses to some of these older FMV games and print discs.
GB: That's fabulous, it'd be fun to see some of those. So I went from Digital Pictures, which was a train wreck about to happen, and did happen, to Capcom. And my very first greenlight meeting was Fox Hunt. Now I don't know if you know Fox Hunt, but if you ever have some time to do some research on the Internet – it has the distinction, in my personal, biased opinion, of being the worst videogame ever made.
Fox Hunt was a $5 million budgeted program, which was back when $5 million was a lot of money [for a PlayStation and PC release in 1996]. It was about a spy – I don't really remember the story, but it was all full motion video. So here I had left Digital Pictures, because they hadn't moved into the real world – and was basically sold on Capcom because I saw Resident Evil being worked on in Japan, said “I'll take the job,” and the first greenlight that I went into was Fox Hunt. And I was like “Oh my god, what are we going to do?” And I think we sold 132 copies. So somewhere, somebody has a copy of it, and it is a true collector's item, because it is the worst that was ever made. Ever.
Gamasutra: But you settled in eventually…
GB: Yeah, well when I first visited the Capcom offices in Japan , I got served tea by a lady in a perfect kimono, and everything at the time was so formal – I wasn't sure I could work for a company like that. But then I was led around the development area, and I saw one guy working on this amazing looking game. “What is that?” I asked – and through the translator, he says, “It's Biohazard [called Resident Evil in the U.S.].” “Great looking game,” I thought – can't use the name, because Digital Pictures owns it [and according to Ballard, the reason why Biohazard was not named that in the U.S. ], but I'd never seen a game like that, and they were moving in the right direction, I thought. So I signed on after that.