Wild Tangent’s chief Alex St. John talks about elevating COO, shutting game studio

Alex St. John was one of the renegades at Microsoft back in the day. He cut an imposing figure as he wandered the halls and swung a fake battle ax. He got Microsoft to launch its DirectX game development technology. Since 1998, he’s been running his game start-up Wild Tangent, but now he is formally handing the reins of chief executive to his chief operating officer, Mike Peronto.

St. John confirmed in an interview that his management team has been running the Redmond, Wash.-based company for six years anyway, while he has been traveling the world representing Wild Tangent before the media, customers and other parties. He said there was no need for him to “camp” on the CEO position, a reference to a gamer’s tactic of sitting in one spot inside a game to pick off all of the other players running by.

He also said it no longer made sense for the company to run its own internal game studio and so he confirmed Wild Tangent laid off its 20 developers. But St. John said that Wild Tangent isn’t suffering from the bad economy. Rather, he said the company grew its revenues 63 percent in the past year and is making money from a variety of methods for selling and distributing web games.

One of the ways is an electronic payment system dubbed WildCoins, which lets gamers play for fees as low as a quarter. The company also makes games available for free if users choose to watch ads which are embedded in the games.

According to comScore, Wild Tangent ranked third in total online gaming audience in September. The company’s game network drew 11.5 million visitors, more than other big companies such as Disney, Microsoft’s MSN, AOL, and others. It is behind only EA Online and Yahoo Games.

Peronto will handle day-to-day management while St. John as chairman will continue to focus on customers, partners and industry evangelism. Before joining Wild Tangent, Peronto was vice president of Publishing Products at Adobe Systems and the chief operating officer at WatchGuard Technologies. One of the things St. John has been saying for a while is that the game consoles will go out of business and be replaced by web-based gaming on the computer. I don’t know anyone who believes this, except John Welch, the chief executive at PlayFirst, who has been saying something similar.

Despite the comScore number, Wild Tangent claims that it gets more than 30 million unique monthly gamers for more than 500 games, which can be played on the web only or downloaded to a user’s PC. Popular titles include “Polar Pool,” Polar Bowler,” and “Fate.” The company’s internal developers worked on titles such as a new version of Fate, a role-playing game, but the title generated a small amount of overall revenue.

“We decided our core strength was publishing and marketing,” he said.

St. John said that it made more sense to dedicate resources to efforts that would boost overall sales. Wild Tangent reaches gamers in a variety of ways, including its own site. Its software for playing games is pre-installed on desktops from PC makers such as Hewlett-Packard, Gateway, eMachines and Toshiba.

He said that years ago, Wild Tangent needed the game team to produce its titles. But he said there are now lots of independent game developers– more than 150 — who can supply games inexpensively to company. The company still has 80 employees. The company has raised more than $76 million from Advanced Technology Ventures, ATI Technologies (Now Advanced Micro Devices), CIBC Capital Partners, Greylock
Partners, IDG Ventures, Madrona Venture Group, Millenium Technology Ventures, New Millenium Partners, Sony, and Washington Mutual.

St. John acknowledged that Wild Tangent has taken longer than he thought to get to its “liquidity event. “I figured I’d be on my third company by now,” he said. “Certainly I would have thought I would have flipped some companies by now. But I’m proud of what Wild Tangent has become. This is a VC funded company. It’s my job to deliver a fantastic liquidity event. It’s not going to happen in this current market.”