Appxplore: Getting acquired can help, not hinder, a game studio
At our Games in Asia Meetup last month, an audience member askedAppxplore co-founder and producer Desmond Lee if he felt like he had sold out his honor as an indie developer by allowing Fatfish Internet Group to acquire a majority stake in the company.
Lee’s answer was a defiant “no” – the team intended to go all out, and a majority buy-out was the only way. Was it really?
The birth of Appxplore
Lee used to work with the Multimedia Development Corporation in Malaysia as a producer on the Saladin Animated Series, which was later nominated for an Emmy Award – the country’s first. Having seen the project to fruition, Lee was eager to take on new challenges. It just so happened he was approached by an angel investor eager to make the nextAngry Birds-esque hit.
“Producing a game was something new to me, but it’s been something I always wanted to try,” Lee said. With the financial support, he began scouting for his core team in May 2011. These individuals would later form Appxplore.
The very first person Lee recruited was Jenn-Yu Lim, whom we understand came from the rigorous Codemasters Kuala Lumpur studio. Lim has played an integral role in Appxplore as its creative director and game designer. With such talent in his stable, Lee found an additional three more hands, and the team began its first game: Lightopus.
No one had much experience developing a mobile game when Appxplore first started. Lee says that all they knew was that they wanted to make a high-quality, kick-ass game, and put it on the App Store. Lightopus, the studio’s first title, was a premium iOS game published by Europe’s Bulkypix, and taught the fledgling Appxplore much about design and development, as well as marketing and publishing.
When trends shifted from premium to freemium, Lee and the team hopped onto the bandwagon to learn how to monetize a free-to-play game. Appxplore realized that in order to go further, it needed to start building its own brand, and that meant self-publishing. The studio then engaged a New York-based PR agency to help market the next game.
“Since then, we’ve learned how to market and self-publish our games, and how to improve user engagement and monetization,” Lee says. However the journey has not been without peril.
According to Lee, Appxplore received negative feedback in the first few months following the delivery of its first freemium game, Alien Hive. Players found the game too difficult and complained that they were forced to make in-app purchases in order to cross a level. The studio later learned to constantly monitor user behavior and update the game accordingly. “We are doing our very best to maintain an app rating of 3.9 and above (out of five),” Lee says.
However, he also adds that while Appxplore does have a lot of happy fans, it’s unable to please the whole world. “There are always people who do not like our game, or any freemium game,” he says.
Alien Hive, a sliding tile puzzle game, has actually been the studio’s biggest hit so far – receiving praise from journalists and surpassing 1.5 million downloads to date. It’s been responsible for keeping Appxplore financially afloat, as well as establishing its brand and reputation. Lee says that a major update for Alien Hive is in the pipeline, with a spin-off of the game also being planned. Although Appxplore’s newer game, Mobfish Hunter has received just 650,000 downloads in all, it’s been responsible for generating most of the studio’s revenue after Alien Hive.
The acquisition and beyond
Life for Appxplore following the release of its fourth and fifth games –Caveboy Escape and Mobfish Hunter – was not easy. Lee says the games just about managed to sustain the small company, but prevented it from growing further.
“We realized in order to be competitive, it’s time for us to grow the team and move more aggressively,” he says. “We needed a level-up.”
So Lee started to hunt for funding. Following months of scouting, Appxplore attracted the Singapore-based, Fatfish Internet Group (via an investor event organized by Malaysia’s MaGIC) to take up majority share in the studio.
Looking for an investor wasn’t an easy task, however. Lee says he talked to many people and had individuals who were interested in investing. But it wasn’t until he met up with the group CEO Lau Kin Wai that he saw growth potential in working together with Fatfish.
Now with Fatfish onboard, Lee says Appxplore’s team can finally expand, allowing innovative minds like creative director Lim’s to plan for more ambitious games. Lee also says that he wants to invest more into marketing his games, something he always wanted to do but has been unable to due to financial constraints. Appxplore is presently in the middle of moving to a bigger office, hiring additional team members, and working on larger-scale games. Its next new game will be out in the second-quarter of 2015. It has also built up a small team in Indonesia to work on casual games.
“We’re eager to move more aggressively in years to come,” Lee says.
There are many ways to scale a, but in certain industries, investments and buyouts can be the only way. Gaming is a small, oversaturated, yet occasionally wildly lucrative market, and sometimes, all certain genius takes is a financial backer who believes in them, and who will stick it out through the thick and the thin. Just look at Appxplore.
Iain Garner, a former Games in Asia employee, contributed to this report.