Purple Games (1)
The number of young people around the world who enjoyed games kept rising, and the growth in emerging markets was especially staggering.
Not to mention China and India, where game-industry revenues in Southeast Asia and Africa were climbing explosively every single year.
For that reason, global IT giants fought fierce battles over this enormous market, and mergers and acquisitions were happening constantly.
The most famous company in this field was Wichent.
As China’s largest company and the world’s largest game company, Wichent had swallowed game makers across the globe whole, riding on the back of its immense home market and staggering financial firepower.
The most representative example was Riot Games.
Based in Santa Monica, this American company was the one that had developed Tournament of Legend, also known as TOL.
The AOS title had been out for nearly ten years, yet it was still the most popular game in the world. Tens of millions of players were still active, and the annual esports championship drew more than two hundred million viewers.
The headquarters were in the United States, and every executive was American, but Wichent owned one hundred percent of the company’s shares.
Enple and Guble were also pushing hard to sell games through their smartphone app stores.
Games made up less than ten percent of app-store listings, but they accounted for more than eighty percent of revenue.
Guble, Enple, and NS were all preparing cloud gaming services as well. The idea was to run games in the cloud without a download and stream them directly to a device.
Even ten years from now that would still be true, but even now the game industry was growing at a frightening pace.
As the success of Battle Island had shown, when one game hit, the ripple effect was beyond imagination.
I nodded and said, “So we’re on our way to invest in a game company.”
The game I was about to invest in was one that would go on to achieve a success far beyond anything Battle Island had managed.
Stargate Studio.
This Santa Monica company had thirty employees and, rather than making and releasing its own games, mostly survived by taking subcontracting work from larger game companies and delivering that instead.
The employees there—Charles Griffin, Ken Utley, Steve Bostick, and Rufus Bailey—often hung out together after work.
Before long, the four of them had grown so close that they decided to leave the company and try making the kind of game they wanted to make themselves.
Each of them put in fifty thousand dollars, and together they founded Purple Games. The four became co-CEOs, and the company equity was divided equally, twenty-five percent apiece.
To save as much money as possible, instead of renting a workspace they gathered in Charles’s living room and worked there.
Game development was hard, but it was fun. Since all four had experience, development moved quickly.
In the case of A-grade games, which required vast amounts of capital and manpower, it was difficult to stray far from the preset mold. Indie games, on the other hand, had the advantage of being able to move in whatever direction the developer wanted.
After a year of development, Purple Games released its first title to the world.
It was called Hammer Warrior, a 2D side-scrolling action game. They priced it at $9.99.
The game made its debut on Stream, where it recorded about forty thousand downloads and earned the company $450,000 in revenue.
It wasn’t the massive hit they had hoped for, but they were satisfied.
What mattered was that more than forty thousand people had bought the game they made and enjoyed playing it.
Buoyed by the confidence they gained from releasing their first game, they immediately set to work on a second.
Charles voiced the idea that had been in his head for a while. “How about a sandbox-style video game? You start in a small town and use blocks to enjoy yourself freely, without any fixed objective.”
Sandbox games had the advantage of offering tremendous freedom.
Above all, if you didn’t care about graphics, they could be developed at relatively low cost, which made the genre popular with indie studios.
The famous My Craft had also started out as an indie game.
Later, though, it was acquired by NS for a staggering two billion dollars, and these days it even held the title of best-selling game in the world.
After My Craft achieved that astonishing success, sandbox games sprang up everywhere. But none of them managed to surpass it.
No—none of them even came close.
“It should be single-player at its core, but with multiplayer elements too. Like letting other users visit a town they built themselves.”
“It’d be nice if users could make mods that expand the game world however they want.”
“What about allowing all kinds of activities, like building, hunting, and fishing?”
Once the development direction was set, ideas came pouring out as if from a spring. They settled on the name Block Valley.
The start was smooth.
Charles worked out the scenario and concept, Ken drew the designs, and Steve and Rufus turned them into code.
But as development went on, problems began to pile up.
Because there was no clear objective, the game could easily become boring if they got it wrong, and the physics-engine bugs and loading issues that came from having a character perform all sorts of different actions were another problem altogether.
To prevent that, they would have to restrict the freedom, but if they did, it would be no different from a regular RPG.
The one-year schedule they had initially set vanished in the blink of an eye, and before they knew it, they were in their third year. Even so, development had barely advanced and still seemed stuck in the same place.
The promise that you could go in any direction meant, in the end, that it was easy to lose your way.
When you’re creating something, there are times when you stop knowing what’s what.
Some days they grew cocky, convinced their game was the best thing they had ever made; the next day, they sank into depression, convinced it was nothing but trash made of data.
By then, the money they’d earned from Hammer Warrior had long since been spent. They survived by working part-time jobs during the day and developing at night.
Steve tried to persuade Charles to stop development for now and make Hammer Warrior 2 instead.
Since there was already a fan base for the original, that way at least they wouldn’t have to worry about making a living.
But Charles opposed the idea. Even after a heated argument, the two couldn’t close the gap between their opinions, and in the end Steve threw up his hands.
“I can’t do this anymore. You can keep going if you want, but I’m out.”
And that was how Steve Bostick left the company.
With one of the four gone, development became even more difficult.
The remaining three were gloomy and drained.
While they were buried in development, the trends in the game industry shifted rapidly.
They couldn’t help wondering whether gamers, whose standards had only gotten higher, would still like the game they were making. But now that they had come this far, they couldn’t just give up.
After three years of development, they had to see it through somehow.
“Maybe we bit off more than we could chew with our skill level.”
“We don’t even have money for bread, let alone development costs. What do we do now?”
“How about looking for an investor?”
“In this situation, do you think anyone would invest in our game?”
“What about crowdfunding?”
Crowdfunding meant putting a project out during development and receiving investment from a large number of anonymous backers.
Recently, there had been indie games that successfully raised development money this way.
Of course, there were far more failures than successes. Every year, tens of thousands of indie games were released around the world.
If you included the ones that never got finished, or the ones that were completed but never released because they had no commercial value, the number was probably much higher.
Out of all of them, how many actually succeeded in crowdfunding?
“Let’s put it up.”
Money mattered, yes, but more than that, he wanted to see whether the game they were making truly had market potential.
Charles uploaded the trailer, development plan, concept, and design to QuickStarter, the biggest crowdfunding site in the United States.
The fundraising period was three months.
The target amount was $500,000.
But just as this was happening, all sorts of scandals and incidents broke out in the indie-game funding scene.
One indie game that had received a full million dollars in rewards before release simply copied another company’s game and put it out. Another company raised $650,000 and then disappeared without ever releasing its game.
Plagiarism, declining quality, and vanishing with the development money were chronic problems in the indie-game world, and the damage always fell on everyone else.
Not only did they fail to reach $500,000, they hadn’t even raised $10,000 by the time a month had passed. Falling short of the minimum, the funding was on the verge of being automatically voided.
The three of them fell into despair.
“We need investment.”
“But we didn’t get any.”
“Maybe this just isn’t going to work for us.”
Charles pulled himself together and said to his teammates, “Wait. Hold on. It’s not over yet.”
“There’s another way?”
“Let’s look for an investor.”
“How?”
“We’ll send emails directly.”
Just as major corporations funded promising startups, large game companies, console makers, and digital storefronts all had separate departments dedicated to supporting indie games.
Some of the indie studios that got that kind of backing hit it big and were either acquired by major game companies or grew into major players themselves.
The company most aggressive about that sort of investment was Wichent, China’s largest IT giant.
That was why, just as he was about to send an email to Wichent’s indie-game support department first, an email arrived in their inbox.
I was deeply impressed by the game you uploaded to QuickStarter. I’d like to meet and talk about the possibility of investing.
“Who sent it?”
“He says he’s Korean. He’s coming here in person.”
“Then let’s meet him. We’ve got nothing to lose by hearing him out.”
Charles nodded.
“Yeah. If you think about it, he’s the first person to see any potential in our game.”
Charles and Ken met the people who had sent the email at a café near the workshop. Standing before them were a young Asian man in his mid-twenties and a blond American.
The Asian man offered his hand and said, “Hello. I’m Han Miru, CEO of Continue Capital.”
“Continue Capital?”
“Yes. We’re a firm that invests professionally.”
Charles and Ken looked at each other.
Have you heard of them?
No. First time I’m hearing the name.
That was only natural. The company had been created just days earlier.
The American introduced himself. “I’m attorney David Lockhart.”
After the introductions were done, they ordered coffee and took their seats.
Han Miru smiled and said, “I looked over the game you’re developing. I’d wanted to meet the people making something like this, so fortunately today gave me the chance.”
Ken couldn’t hold back and blurted out the question first. “Are you really investing in our game?”
“Yes. First, I’m planning to invest one million dollars.”
The two of them looked at each other again.
That was double the amount they had been hoping to raise. At that level, the three of them could keep going for two years without trouble.
“What are the terms?”
Han Miru answered as if he’d been waiting for the question. “I’d like fifty percent of the game’s equity.”
“Fifty percent?”
All three of them had agreed that if they received investment, they would give up a portion of their equity.
But...
One million dollars for fifty percent of the game means they’re valuing our game at two million dollars.
They had made $450,000 from their previous game.
Then what about this one?
Charles was proud of the game they were making. No matter how desperate they were for money, he had no intention of giving away the rights for a bargain price.
Two million for half the game is absurd.