iDreamSky's Monte Singman wants to take Western hits to China (interview)

Above: iDreamSky sign

Image Credit: Dean Takahashi

GamesBeat: They seem to have loosened up more than in the past. I think the skeletons in World of Warcraft were a problem at one point?

Singman: Yes. But zombies are still a problem.

GamesBeat: Does that leave you with a more targeted list of things to go after?

Singman: It’s still a pretty wide range. iDreamsky is the strongest in casual games. We’re branching out into mid-core and hardcore. We have certain genres that we’re going after, high-average revenue per paying user (ARPPU) games like action-RPGs.

GamesBeat: When you bring a game in, where do you take it? Where does your content do the best as far as channels?

Singman: We’re close with Tencent. They’re our biggest shareholder. We also work very well with 360 and Baidu, the major Android portals.

The interesting thing about iDreamsky, though, is that we don’t let go of the smaller channels and game centers. When I go into the channels department within iDreamsky, it looks like it’s as big as R&D. It’s more than 100 people. We work with big channels, medium channels, and even small channels. When you add it all up, it’s still very sizable.

GamesBeat: Do you have an ambition to find another Angry Birds, to spot that kind of hit early?

Singman: The aspiration is there. Michael Chen, our CEO, has told me to look for those, because that gives you the best return on investment. But we also understand that it’s not going to be that easy. You’re going to find a lot of duds. The majority of games that we select are already proven successes.

GamesBeat: How many games are you doing deals with each year?

Singman: We signed five games in July, just in my department. We have three departments – my department covers the U.S. and Europe, then there’s one for Korea and Japan, and one for the domestic market, China. Our portfolio is growing rapidly.

Above: iDreamSky Monte Singman

Image Credit: Dean Takahashi

GamesBeat: In the next few years, if you could predict what’s going to happen, are there some things that are obvious to you or some things that are still a little murky?

Singman: We’re enthusiastic about smart TVs. We’re enthusiastic as well as very curious about consoles in China. We’re not so interested in packaged goods, but we’re interested in the digital distribution market. Packaged games are going to try to make a comeback in China, but that’s not going to be our focus.

GamesBeat: I’ve been talking to a lot of people about the consoles, and some of them aren’t sure they’re going to be allowed to do digital distribution, because of some things that the government has concerns about.

Singman: If that’s the case, then we won’t be touching it. It’s hard to predict. We’re sitting on games like Subway Surfer and Fruit Ninja. It’s low-hanging fruit. Some of these games are on XBLA already, so it would be easy for us to start with those.

As far as other trends, I’m not going to predict anything, but this is what I’ve observed: For the first time in China, content providers, game developers, have become a scarce commodity. The cost of game production is going up. People can’t hire game developers fast enough. Developers are getting paid a lot of money, to the point where the cost of getting a Chinese mobile game is higher than the cost of a western mobile game. That gives iDreamsky an advantage, I think.

Some VCs in China invest only in game developers, because making a game and selling it to iDreamsky or Tencent has become a gamble that Chinese VCs love to go for. They get to see the results right here. Anyway, I talked to one of these VCs, and I said, “What’s faster? I go and sign a deal, or you go and make a game?” They said, “Well, that’s not fair. You’re more connected in the west.” But that’s my view. There will be a lot of licensing deals, because even if we’re talking about tens of thousands of mobile game developers in China, there’s still not enough. A lot more Chinese companies will go to Korea or Japan or the U.S. to license IP and games. We may see more acquisitions.

GamesBeat: Do you have any news about the IPO from iDreamsky?

Singman: They’re in New York working it out right now. I’ve heard it’ll be August 7, on the NASDAQ. We’re trying to raise $100 million to $120 million. It’s not a big chunk of the company. We hope to use it to acquire more companies and license more games. We’ll expand our business.

The caliber of the games we’re getting is going up. Like I said, we’re talking about seven-figure minimum guarantees. In a couple of years it’ll probably be eight. If you look at Supercell’s games and how much revenue they generate, it’s not unfathomable that they’d go to seven figures.

Above: iDreamSky booth girls

Image Credit: iDreamSky