search slide
search slide
pages bottom

"Seeing studios as classic start-ups that you can scale is flawed"

Germany's Remote Control Productions is a considerable outfit. A twenty five person company, RCP covers the needs of eleven development teams, comprising of 150-160 people at any one time. It covers finance, accounting, deal brokering, amelioration, creative design, production pipelines, marketing, even HR. It also handles affairs for a serious gamification unit and a small scale publishing unit. It's a lot of work.

Which is why it's even more surprising that the CEO, Hendrik Lesser, is also the head of the European Game Developers Federation - the EGDF - a position previously held by Quantic Dream's Guillaume De Fondaumiere. A quietly confident, personable man, Lesser divides his time between managing the affairs of both - no small task at all. Sitting down on a sunny afternoon in Malmo, at the Nordic Game Conference, I ask him how he ever finds time to be away from his desks.

"Good question," he laughs. "In the last year we've brought some new guys in to RCP to be able to deal with the growth. My objective here is to support Jyri, he's the managing director of our Finnish subsidiary, the first one we have outside Germany as RCP. We have some teams in Austria, three of them, but to really reach out internationally - which was one of our key objectives for the next couple of years - having subsidiaries all around the world is how we scale the business. The objective long term is that we have dozens of studios which help each other, using synergies and all kinds of stuff. So I'm here to help him, also be visible in the Nordic region. It's not just Uri - the boss is here to back him up."

Lesser's vast remit is complex enough even without the many and varied duties which the EGDF demands. In his own words, RCP will do "whatever's necessary" to bring its customers games to fruition, and most of those clients are fresh out of university, needing a great deal of guidance. Between that and constant petitioning in Brussels, it would be easy to imagine him being stretched a little thinly, but Lesser enjoys the challenge.

"I name myself King Of Conflict Of Interest," he jokes, when I ask how he keeps track of it all. "It's like running 11 different studios who are all competing against each other. Running it isn't even the right expression, but working with all those people, we have daily conflicts of interest so for us it's a very big thing. We try to deal with it through transparency on the one hand and on the other hand try to make just decisions, to a certain degree. Most of the time it works out. The EGDF is a lobbying association for Brussels on regulatory purposes, so of course I have certain benefits. I know what's going on and that's fine but I don't see any real hard conflict of interest. People know that I'm doing this and we have a history of always disclosing 'I'm doing also this'."

Stepping into the shoes of De Fondaumiere at the EGDF meant great expectations, despite his confidence that he would be succeeded by "the right people." The Frenchman had a high profile and achieved much during his tenure, including pushing tax breaks, so what's first on Lesser's agenda now he's in charge?

"When I was elected president for EGDF one of the key things was I said I want to expand into Eastern Europe. Traditionally Eastern Europe didn't really have a lot of associations, most of the Eastern European associations are kind of new, some of them are more or less forming right now, so for EGDF to represent in Brussels not only the traditional Western countries - Uk, France, Germany, all that - is very key. I want to be able to lobby in Brussels and represent all of Europe including non-EU states which is important too.

"On the other hand I would call it business as usual. Checking out data protection, consumer rights, the whole free-to-play debate, there's nothing wrong too much so this is very key to. And as EGDF is kind of a meta-association for a national association we always have a challenge with our own budget so we have to think about how we put EGDF on different pillars to be really sustainable. After the first ten years I think it's time and we just did that with forming the by-laws to be a little bit more open to reflect a little bit more the changing industry.

"It is, of course, super complicated. I just introduced you to Jari-Pekka, he's doing a tremendous job as CCO, basically the day to day operations, going through 40 page documents which ordinary people would hate to read. I don't even understand half of it, because it's just complicated bureaucratic stuff so it's always also a challenge from EGDF to actually explain what we're doing. Political lobbyism is always difficult too because most members in our association don't really understand what we do. For example if we prevent stuff, just a little after we've prevented it everybody forgets.

"We just last year had the discussion on the term free-to-play. Google had to change that already, so sometimes it's that easy to just change semantics for consumers to understand better what they're doing. Because obviously we want to have the industry thrive but we also have an obligation and a duty to think about our consumers and to think about sustainability. I think EGDF always wants to be credible, truthful, but still trying to help our membership to be able to grow and prosper."

Prosperity is a key factor in both jobs. Bringing money to developers in one way or another is the real essence of both of Lesser's roles, so it's reassuring that he sees the European investment situation showing signs of improvement. Investors who understand the business are growing more common, he says. "So in my opinion investors, especially in the climate of today, they need to invest in something and only to invest in real estate is not the way to go. So it's interesting because there is potential of growth and profitability and since we deal with entertainment there's also still passion involved. So when you think about, for example, the movie industry, most of the independent movies are financed by high net individuals. Who are those guys? Tech guys, guys who made money with either e-commerce or whatever. For some of them it's like 'yeah, I would like to do that, that sounds awesome and if it works out fine, if it doesn't it was still an awesome ride.'

"So I think investment overall is changing a little bit and also the games industry itself is maturing quite a lot, starting to understand what potential VCs, angels and so on are actually looking for. In my opinion seeing development studios as classic start-ups that you can scale is a little bit flawed and it always was. The first big wave I think was for social games on Facebook, there were a lot of misconceptions about how that works. A lot of people made money, other people lost money, I think in the end it matured the whole sector and everybody who is still in understands way better that we are entertainment and most of it doesn't really work out.

"On the other side of financing obviously there are more and more subsidy programmes and we work with the EGDF and all the other bodies to create what we call alternative funding. So you either get a bit of seed through government organisations or you can leverage with some private money or something like that. In my opinion it's very interesting to see what the movie industry was doing the last ten or 20 years and kind of adjust and bring those worlds together a little bit more. For me as a game guy it's hard to say but to understand a little bit more that we produce content not necessarily just games and movies, but we create transmedia experiences, even if I hate the word, but we look at all the different kinds of media."

Lesser's home turf is an interesting, if difficult market. Germany has always been a PC stronghold, but it was also one of the first European countries to fully adopt a browser-based free-to-play economy, as well as leading a lot of social gaming charges. With that market now firmly under the hammer of mobile gaming, does Lesser feel that German developers have moved on with confidence?

"Not enough," he says. "Five, six, seven years ago the emergence of browser games companies, especially in Germany with Bigpoint and Gameforge and all those guys, was very promising because they understood free-to-play very early on. Interestingly it wasn't really done by game people but people outside the industry, which is also cool... but I was a little bit sad that our own industry wasn't able to innovate as much as people coming from the outside.

"The interesting part is that most of these companies, after they reached certain success levels - and some of them they were huge - stopped to innovate, which I think is a shame. Some of them adjusted, Innogames for example, I think they kind of made the switch, to a certain degree, but others didn't really do that. So they're seeking out their next steps and either going more traditional and going back to PC or something like that or kind of administer what they have at the moment and don't really have a clue what to do next. I think that the most dynamic companies in Germany are dealing with mobile are small companies and not so much the ones that were supposed to lead the charge again.

"For the guys who are already quite strong there, browser is still viable to a certain degree because they open up the channels. In the peak time some of these companies employed dozens and dozens of biz-dev people opening up webspace channels in all kinds of countries. There's still inventory so you can still sell stuff but it's not a growing industry any more. If you are clever you might be able to find some niches but you will not build a couple of hundred people companies out of that anymore. The golden times are definitely over."

Leave a Reply

Captcha image