Green Man Gaming carves out a $40 million niche in Steam’s shadow (updated)

Companies survive — and thrive — as they compete with Steam, the largest online store for downloadable PC video games in the world. Green Man Gaming is one of them. This shows that while one company dominates the market — in this case, Valve with its massive operation and community — others can find a niche. In this case, the U.K.-based company has carved out a space that brought in $40.37 million (£29.5 million) in 2015 (compared to $684,000 [£500,000] after its first year in 2009).

And it has carved out this niche by doing things Steam doesn’t: Rewards for community members and publishing partnerships, selling console and PC gaming, and putting products not just in front of its community but also in the hands of 2,000 affiliated streamers.

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At the recent Electronic Entertainment Expo, Green Man Gaming founder and CEO Paul Sulyok talked about his company’s sixth anniversary, how it stands out from Steam, Amazon, and other competitors, game publishing, the importance of trade shows and conventions, and other issues key to the growth of the worldwide $99.6 billion gaming industry — like selling games in China. This is an edited transcript of GamesBeat’s interview.

GamesBeat: How long has Green Man been around now?

Paul Sulyok: Green Man Gaming was launched in 2010. May of 2010. We were working on it in the back end of 2009, I think. I put my credit card behind the bar to get us an office about September 2009.

GamesBeat: What regions are you in now?

Paul Sulyok: Green Man Gaming sells—there are three parts to our business. The first part is the e-commerce platform. We sell digital computer games from multiple digital rights management systems in about 180 to 190 countries every month. We sell on a global basis. About 40 percent of our business is based in the U.S., another 40 percent in Europe, of which 8 percent is in the U.K., and 20 percent in the rest of the world.

GB: Is any of that 20 percent in China?

Paul Sulyok: Yes, a significant portion is in China. China is an interesting one, because it’s not driven by games per se. It’s driven by specific products. The Chinese will want to go for a specific product. You’ll see a massive interest in that particular product, and anything else—they like Game A over there, why don’t they like Game B? I don’t know yet. I’m working on that one.

GamesBeat: Do you have any good examples of specific games they were really into?

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Paul Sulyok: I have a specific example of how they react.

We had China switched on for a long time, and nothing was really happening there. It was PayPal, it was credit cards — all the payment systems were very mundane there. We then turned on China Pay and AliPay as payment systems. The U.S. is 40 percent of our top line. Within three hours of us enabling those payment systems–we didn’t tell anybody about it or do anything about it. We just switched it on to see if it would work. Within three hours we had the same traffic coming from China that we had coming from the U.S. So there is absolutely pent up demand there for western digital products. Certainly if you go to China Joy for instance, there are lots of games that are very similar. It’s folly for me to criticize because there is no such thing as a bad game in my opinion. There’s only a game that’s mispriced. There’s always a demand for any kind of game. But the challenge is that there are lots of very similar games, similar looks and feels. Getting down to the nub of what is different, what’s going to push their buttons, what’s going to gain interest over there, is an ongoing challenge we face. I’m sure other companies like us face is as well with different product ranges.

GamesBeat: One thing I’ve always heard about other consumer products in China is that it’s brand-driven. You take a look at Blizzard. Its games do well in China, and it’s a top brand in gaming. Do you see that same thing at work?

Paul Sulyok: Brands do drive it. Publishers drive it as well. But I also think that it’s about an immersive product. If you look at Blizzard products, they’re brilliant. They’re a wonderful publisher. But they tend to be very immersive, and very competitive. The gaming culture in many parts of east Asia, China partially included, it’s a social culture. People go to gaming cafes and hang out with their friends. They compete in gaming cafes. It’s less of a solitary occupation and more of—they’re living in quite often very high density towns, like Singapore for instance. Going out to hang out with your friends at a gaming café is a fun pastime. That’s why those sorts of products do very well. It’s less the brand than the product.

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GamesBeat: So chances are that if you have a game that brings a lot of people together, you’ll do better.

Paul Sulyok: Correct.

GamesBeat: Have you found that to be the case with the games you sell?

Paul Sulyok: Absolutely, we have found that. There’s also the stardust appeal. Something that’s a triple-A game, a beautifully created game, Grand Theft Auto for instance. There was a lot of demand in China for Grand Theft Auto, because it was a beautifully created game.

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GB: Does piracy hurt you in China?

Paul Sulyok: We haven’t found that piracy hurts us at all, honestly. It really doesn’t bother us. It’s about the change in affluence. If you think back to Eastern Europe 10 years ago, piracy was a major issue there. As soon as a game came out, it got cracked and released. But as people became more affluent in these economic regions, to be honest with you, saving yourself—you’d spend three quid, say, on a cracked game, because you still had to buy pirated goods in those days. And you’d spend 10 pounds on an uncracked game. As people have more money, they’ve become less willing to take the risks associated with taking a cracked game and more willing to just pay a bit more and get a premium product. It is a little bit of that. It’s about pricing, and it’s about affluence. If the publishers reduce their prices and the population becomes more affluence, it will naturally stifle piracy.

GamesBeat: I’ve heard other companies tell me that they’re seeing that happen in Eastern Europe. CD Projekt, for example, is having great success there. Free-to-play companies on PC are doing well. Ubisoft does well there, too. What makes Green Man Gaming stand out right now? Everyone knows Steam as the biggest store around. GOG has its own thing. But the PC market is so big and so diverse that different companies can still carve themselves out a market. How did you do that?

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Paul Sulyok: Green Man Gaming is composed of three parts. The first part is the store. We’ve already covered that. But we have a great range of products. We have 7500 different products, from about 450 publishers we work with directly. The second thing is we’ve got Playfire, which is our community. Playfire is a game tracking community where people can come in and discuss games. They’re automatically put into communities around the games they own. And what we do with Playfire is we draw down the information about the individual customer from the relevant backend. It could be Xbox, PlayStation, or Steam. If you have a Steam account and you’re part of our community, we know not only the games that you purchased from us, but we also know every other game you’ve purchased on that platform. We know how long you played it for, when you started playing it, when you finished playing it, what achievements you got. We correlate that information with the economic information we get from your purchasing profile. We get a very clear picture of exactly what you are as a gamer, across multiple platforms. That’s absolutely a differentiating factor. On top of that, we’ve also got the ability to give prizes, give rewards for people who do things in games. If you get to level 13 of a particular product, or you get a certain very difficult achievement, we can give you something. From the publisher or from us, to make it worth your while. That could be a voucher, a free product, DLC, or even some credits in your account.

GamesBeat: Does that include cosmetics, things like avatars and skins?

Paul Sulyok: Absolutely. We’ll work with publishing partners and they’ll say, right, we’ll give you X number of avatars for everyone who hits level 13 of this particular product, this particular game. That’s a unique differentiating point for Green Man Gaming. The third thing Green Man Gaming does differently is—we’re also a publisher. In late 2014 brought a guy on board the team called Gary Rowe. He’s ex-Sega, ex-Codemasters. He was working at Sega for content acquisition when they took on board Creative Assembly and Sports Interactive.

GamesBeat: So he made some of the best decisions Sega’s ever made.

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Paul Sulyok: I’ll give him credit. Sometimes you get it wrong and sometimes you get it right. But he normally gets it right. We brought Gary on. Gary runs the publishing team. We now publish our own games as well. We were being approached by a lot of developers. The market is very crowded right now, especially on PC. Getting your product in front of the right people at the right time is a challenge. We were hearing from developers saying, can you help us with this? We said, fine, let’s publish games as well. So in 2015 we did a dozen smallish games, just to get our feet wet. Now we’ve got four major titles released. One’s coming up tomorrow. It’s called Lifeless. I can show you a little video clip. It’s a combination, a hybrid of something like Battlefield or Counter-Strike, with two teams, but you do this in a zombie-filled environment. These two settlements fight against each other with the zombies in the middle that you have to contend with as well.

GamesBeat: So it’s like a MOBA mechanic, the jungle, in a shooter.

Paul Sulyok: Correct. We have a number of other titles, including The Bunker, which is a point and click movie. Very similar to Telltale Games when they did Walking Dead. But it’s a movie. The lead actor is Adam Brown, who was in The Hobbit. It’s effectively a bunker that’s been—you wake up in a bunker 30 years after a nuclear holocaust. You work back through your memories – it’s a psychological horror story – to work out who you are and how you got there.

GamesBeat: It’s a departure from what Fallout has done.

Paul Sulyok: It was picked up by the BBC. There’s a BBC show called Click Online. Specializes in technology. Bunker’s another very nice, interesting game.

GamesBeat: What makes you attractive to developers? The way your platform works, you can get those games in front of people who might like them?

Paul Sulyok: Bear in mind, because we’re a retailer—a normal publisher will have their normal publishing channels. We’re a retailer. Because of our relationship with the market, we have, for instance, 2,000 Twitch streamers in our affiliate network. We have 2500 affiliates at websites all over the world, content websites we work with on a regular basis. We have this ability to tap into an engine that we already had in place from a digital perspective. A normal publisher can’t do that, because they can’t feed 2,000 Twitch streamers with content, with free games, with prizes, something else every week. They don’t have that breadth of content. We have a relationship with 450 other publishers already, which allows us to say, right. Mr. Streamer, have this and this and this, you can promote and profile these games. We’re in a slightly unique position, to the benefit of our developers, because we can put their games in front of a much wider audience than they would otherwise get, whether it’s with a medium-sized publisher or by trying to do it themselves.

GamesBeat: Or on Steam, where they’d just get lost.

Paul Sulyok: Well, Steam is easy. We sell on Steam as well, by the way. We sell on Steam, Humble, about a dozen different outlets. Amazon. You get up on Steam, you make that first splash, but unless someone’s checking in to Steam that particular day, they won’t see you. Whereas we send out 2.5 million emails to people who’ve opted into our mailing list, offering them products and bargains. You don’t need to have lots of those people tapping in and talking about buying that game to start creating a groundswell of opinion behind it.

GamesBeat: Is it fair to say that one of the other things that makes you stand out is the fact that you have an engaged community, as opposed to something like Steam where a lot of people don’t participate in community at all?

Paul Sulyok:  Yes. They’re a very lively community. Bear in mind, if you roll in Playfire as well, where people are talking about games—admittedly they’re talking about other things as well. But it’s a focused community around games. You drop into any of the buzz feeds in Playfire and ask a question – how do I get X-Y-Z – then they’ll be very happy to jump on that thread and say, this is how you do it. We have an engaged community.

GamesBeat: Is that community different than Steam’s community in any way? Steam can get pretty nasty sometimes.

Paul Sulyok: All online communities need a level of management. They need a level of freedom, a level of democracy, and a level of management. If you work well with an online community then they’re a self-managing entity. If somebody’s out of order, then somebody will always jump in and say, that’s out of order. You get your community invested. You get your community leaders. They’re not even formally appointed, but they become senior members of the community to help guide that community. From a community perspective, you make sure the people that take on that additional responsibility are the right people to lead that community.

GamesBeat: What is it about being a retailer and a community driver and a publishing platform—what is it about that that’s attractive to you?

Paul Sulyok: I’m an entrepreneur. This is my third company. My first company produced algorithmic trading engines in the equity markets. Total shift away from here. I made some money doing that and I really enjoyed it. My second company was a hybrid of computer games and gambling, which was called Prizefight. And I loved that too. It was brilliant. Everything I did wrong in the first company I did right in the second company. But it made no money. I’m very commercially focused. I believe a company has to be commercially focused. That’s the lifeblood of any organization. You can’t rely on venture capital to come in and keep feeding you money. You have to prove the organization can make money. Am I deeply involved in this company? Yes. We do a town hall meeting every month where I sit down and tell people how well we’ve done – or not, if there’s bad news as well. I like the up close and personal with my staff, but I like to be highly engaged with my customers and my publishing partners as well. So you have to be. You can’t not—we started in 2010 and made 50,000 pounds that year. In 2015 we made 29.5 million pounds. That’s public knowledge. If you’re trying to grow a company that fast, you can’t not be passionate about it. It’s not a job at that point.

GamesBeat: Do you play many games yourself?

Paul Sulyok: I always play one game. I obviously play our games that we’re coming out with, although I recognize the fact that I’m probably not the person who should be guiding them on what they should and shouldn’t be doing. I’m not creative in that sense. I just played through Fallout 4 now. That was a project and a half. I have a wife and two children. I don’t play games with the wife and family around, so I have to play games when my wife’s out and the kids have gone to bed. Then out comes the laptop and I start playing Fallout 4. It’s a great game.

GamesBeat: In the next three or four years, what kind of games do you see as your growth opportunities?

Paul Sulyok: Interesting. I’m very interested in VR, where that’s going. That’s going to be driven by where the—the battle of the hardware, basically. That’s absolutely something I think is going to be a position of great interest. If they can get it right, it’ll be a whole new level. Not just of games, but of entertainment period. It’ll require refining and a great deal of work. Right now, many of the virtual reality games that are out there are just too intense on the brain. Just too much to take in. You’ve obviously played them.

GB: I’d agree with that assessment on bunch.

Paul Sulyok: You come out feeling fuzzy-headed, even after 15 or 20 minutes. We need to refine the art of how to make games like that. Then, I think, it’s going to be very interesting. The classic genres of games are going to remain. MMOs, strategy games, first-person shooters. Those sorts of games appeal to different types of people. I do think there’s going to be an interesting turn with what’s happening right now in the economics of games and game playing and game distribution. Steam has turned the market on its head a little bit. They’ve not gone for a walled garden the way PlayStation and Xbox historically have done. They’ve not felt the need to rely so much on physical distribution. They’re very much looking at, how can we leverage a virtual online community in order to talk about our games, play our games, discuss playing the games, build that groundswell of opinion behind them. There’s going to be a major move away from brick and mortar retailers. We’re already seeing that. Which is going to work well for online, digital propositions.

GamesBeat: Where do you see competitive gaming and esports in this picture?

Paul Sulyok: Many games are competitive in nature. Esports has its part to play in the ecosystem of the games industry. The challenge around esports is the longevity of the games themselves. If you’re a footballer you learn your trade playing football and you go off to—when you’re eight or nine, you start out and you work your way up, and through all that time the rules of football don’t change much. Try doing that with a computer game from 10 years ago. Apart from StarCraft in South Korea. It’s a challenge. The games move and the games change. It has its place. The way the Koreans have done it is fantastic, absolutely brilliant. They’ve done it with the pomp and the splendor of an event, rather than just a competition. It’s a show. You’ve obviously been to–

GamesBeat: Yeah, I’ve watched it, although I haven’t been to South Korea.

Paul Sulyok: Unbelievable. I went to an event of the Korean esports association and saw the StarCraft finals in 2008 or 2009. I’ve never seen anything like it. At the same time was the finals of the Korean baseball tournament. 35,000 people watched that. Then we went down to Pusan, a very big bay with a bridge going over it. These guys drove in on two V-shaped convoys of speedboats with the team captain holding the flag. People were going crazy, hanging off the suspension bridge looking at them. Then they pulled up onto the sand and the whole bay was full of people. Every 200 meters there was another big widescreen TV, like the side of a building, for people to watch. I was sitting there on the beach watching the finals. I’ve never seen anything like it in my life. It was so slick. Brilliant. That’s the way to do esports.

GamesBeat: Green Man Gaming just had a celebration of sorts, right?

Paul Sulyok: We did indeed, our sixth birthday. We’re very proud. Six years on May 10. Could arguably be May 11, I’m not quite sure. We launched Green Man Gaming and then we decided to un-launch it quite quickly because a couple of things went wrong. Then we relaunched it. So yeah, six years old. We’ve gone from two of us to 70-plus.

GamesBeat: How do you get more people to use Green Man Gaming? That seems like your big challenge?

Paul Sulyok:  We’ve grown dramatically as a company. We’re a Sunday Times Tech Track 100 company. We’re in Deloitte’s Fast 50. We’ve been selected by the British government as one of the 50 companies in the technology sector that are going to IPO. We’ve grown dramatically. We’ve not done ourselves a massive service, if I’m being honest with you, by being able to juggle all the balls we need to. You have to really focus on doing something well and then get that done and move on to the next thing. There were a lot of things we’ve not done very well. One of those is localization. We’re all over the world, but we’re not localized in a lot of languages. We need to be localized. I’ve only just launched a new website, our third-generation website, which is mobile responsive. It allows me to upload more currencies and localize far more easily. That was my first stepping stone for massive localization on a territorial basis. That would allow us to be able to appeal not just to the people who understand English, but also to every other language as well that’s economically significant.

GamesBeat: Are you involved in mobile gaming at all, or is it just PC and console?

Paul Sulyok: Right now it’s just PC and console. It’s one of those things that we’ve considered. The mobile space is quite aggressive. It’s quite flooded. There are quite a lot of very big players in there. From a business perspective, we’re not discounting the mobile space at all. What we’re saying is, right here and right now we have quite a lot on our plate doing what we’re doing with Green Man Gaming.

GamesBeat: Can someone buy a Green Man Gaming game on mobile?

Paul Sulyok: Yes. You can buy it on the responsive website right now. We’ll be launching a mobile app on Green Man Gaming by the end of the year.

GamesBeat: It seems like that would help you especially in Asian markets.

Paul Sulyok: Absolutely. Anywhere you have a population with long commutes and Wi-Fi on the train systems, as you have in places like South Korea, that’s an ideal scenario for you. Someone can flick through the app, see something they like, bang, they’ve bought it.

GamesBeat: It also works in other places. I could be walking through this convention center, see a game that’s out, and say, hey, I’d like to buy that.

Paul Sulyok: They can open up the website and buy it, but yes, it’ll be far easier to open up an app and buy it. Much slicker process. The idea is that with an app, you want to get to a one-click checkout. That’s the nirvana. You can’t do that on a web browser.

GamesBeat: Would that be your biggest advance for your community that’s in the works?

Paul Sulyok: It’s one of the innovations in the works. [Laughs] Watch this space. We’re doing a number of things. We’ve gotten to a very good place. We’ve rolled out this new platform. The new platform is much slicker, much smoother on the surface. But underneath it—when you’re building a company rapidly, plugging bits, attaching this to that, it’s almost like you’re in a house. You start with a run-down house, put an extension on here, put some new windows in there, a couple of babies come along and you stick some more rooms in over there. Next thing you know you have a house with all sorts of bits and pieces stuck on to it. You almost have to take it back down to basics and say, this is the house I need to have now going forward. That’s what we’ve done with Green Man Gaming.

GamesBeat: With Green Man Gaming and with your platform, what would you consider the most attractive part of it for somebody who’s looking to publish their game?

Paul Sulyok: To sell a game? Green Man Gaming has a very thorough and accomplished marketing element to it. We have our 2000 Twitch streamers. We have our affiliate network. We have a customer base we talk to. We have a highly engaged customer base who, when they come on the Green Man Gaming website, they’re looking to buy a game. They converse at off-the-scale proportions. What I’d say to anyone who’s put the love and the work into building a game and wants to get a return on that, if you have a partner that works hard for you and has the assets to make your game a success through their marketing and sales channels, that’s a partner you should seriously consider.

GamesBeat: As traditional retail becomes less important, do trade shows like E3 become less important?

Paul Sulyok: From my perspective I think they’re invaluable. The reason why is, it’s about face time. It’s about breaking bread with someone. It’s about seeing someone. It’s about understanding what’s going on in the broader industry. You don’t get that from a one-point contact. You get that from gathering together the industry. The industry talks to each other. The industry interacts with each other and drives forward. Do I think trade shows, from our perspective, are important? They’re absolutely vital.

GamesBeat: The evolution of trade shows into fan events, do you think that’s good for the circuit and the industry in general?

Paul Sulyok: Gamescom is interesting. On one side you have the trade events, very clearly segregated, and on the other side you have the fan event for customers. It’s brilliant, because you get all the benefits of interacting at a business level, and then if you want to dip in and see the product, you can. You can wander out and see the stands. But the stands are there principally for the fans, and then the quiet meeting rooms are around the back where you can cut deals. Crossing the two together causes a bit of a clash. But from my perspective, the ability to have the time to meet people and discuss business is critical. It’s only right and fair that customers and consumers have the ability to get their hands on games. Developers love having their games in front of people and seeing their reactions. It’s part of the pleasure of being a developer. There’s no reason why we shouldn’t continue that as well.

GamesBeat: Seeing people enjoying their games like that, does that help you make a decision about doing a deal with a developer?

Paul Sulyok: No, we don’t stand in front of the stands of a developer and think, we’ll take that one because there’s a big queue there. It wouldn’t influence me. But I do think it’s good for the industry. It’s good for publishers and developers. It creates that excitement around gaming that we all need in this industry.

Correction, 8:26 a.m.: GamesBeat misspelled Paul Sulyok and Gary Rowe’s names. We regret the error.