What was your background prior to setting up Nephin?
I was in mobile for enterprises. It was mostly centered around CRM, customer relationship management. Generally speaking we are talking pre-mobiles, they wouldn’t even be smart phones, they would be PDAs, or custom built devices.
…and what was your job?
I was on the tech side, a propeller head, through and through.
How did you get into that?
Electronic engineering. I graduated out of GMIT first with a diploma and then I went to Limerick. There was a computer science course and I specialized in computer engineering. Through the first few years working I became more of an applications orientated person.
How did you move from that to Nephin or was there something else in between?
In 2000 I went out on my own and basically doing the same kind of stuff I was doing before. And while doing this I was keeping an eye on what was happening in the mobile entertainment side of things. There was a company from Scandinavia who had a number of games based around Lord of the Rings which were horrid stuff, and that just made me think. It was early school, SMS stuff and WAP games, even with the limitations of the technology their imaginative use of it was terrible. And from then on I was plotting my exit from enterprise. I had been doing it for so long, same problems, same solutions. My initial focus was multiplayer.
Why did that change?
I found out fairly quickly that there are some very significant barriers with multiplayer, some technical, like latency. Probably a bigger issue is billing. So for a number of reasons I decided that multiplayer was not where I wanted to focus. Which is not to say we won’t ever do multiplayer.
So what happened then?
What happened was I went back to basics. A phone is not a gaming device, it is a communication device first. So if you take this as the premise for why people want to have a phone why not carry that through to their entertainment and have games that include interaction with other people. So that is why I started to focus more on interaction rather than forcing it from a gaming perspective into multiplayer. That is what led us to community. For us community is, at the most basic level providing things like a buddy list, providing chat with your buddies, rankings and a means in-game to interact with people in the context of the game.
Not necessarily in real time?
As part of the play of the game, but not necessarily head to head. At its most simple, there is our kick boxing game – that has all of the basics. It has the buddy system, it has the rankings, it has the messaging. It has in game community play in that I can challenge you but what that means in terms of the game is that the game downloads your profile from the server, I play against your profile on the phone, if I win it uploads it to the server and you get a message in game saying I whipped your ass. Which gives you the incentive to challenge me back and you can do that within the message.
I think GD.ie readers would have first heard about you in relation to the kickboxing game? Was that your first game?
No there was one prior to that, which I was using basically to build the platform, which was called Ant World. It never saw the light of day for a number of reasons, including the fact that I am not a game designer!
When was this?
That would have been 2002 through to 2003. 2004 was WKN.
If I remember correctly you approached the kick boxing federation about the WKN game?
As we were building the idea of a community, the thought then occurred to us that there is an opportunity to have that community used for a purpose. With my CRM hat on I approached it as a way for a brand to connect with people in the context of a fun experience and for them to be able to not just to have statistics on the people but to communicate with the people. Rather than people just being consumers then they would become customers that you can actually connect with.
How does that go down with players?
It depends on how you do it. The WKN game is quite obvious it is a kick boxing game. If you are playing that game the WKN logo comes up at the beginning, it is behind on the menus, it is on the mat when you are fighting. But it is not like in game ads that pop up and are annoying, it is just used as a setting for the game, and the game is appropriate for the setting.
…and they went for it?
They loved it, and the reason they loved it is because they saw it as a means to get their name in front of the next generation of kick boxers, a younger demographic.
…and you got the DMI award for that in 2005?
How are you distributing the game and how has it done commercially?
Well we are not a publisher, we are a developer, so we need distributors. We are constantly upgrading, from our point of view, our distribution network, making connections with bigger distributors/publishers. We are currently working with Mobile Media and through them we have launched the kick boxing game in Italy. It launched in Italy last November, mid November and to date there are 13,500 players and 4,000 of them are regular players, and it has generated over 50,000 euros in revenue for the operator.
…and do you receive any of that?
It is on a per dominal basis.
So you get a percentage?
Why Italy for the kick boxing game?
Because that is where Mobile Media were strongest as a partner.
Are they an Italian company?
No Oslo. With Lampoon we have established a relationship with Disney and we are now also talking to a number of players in the US including Blaze, Mforma, Infusio and others with a global reach. But equally we are looking at China and Asia with companies such as Dadango, out of the US. We are also working with Vimio, an Irish company in the Middle East who also have operations in China.
So the second game is the National Lampoon game?
We have got to the point where we have a number of engines and we look to develop concepts around those engines that would be applicable to certain types of brands and then look to attach an appropriate brand to an appropriate engine. So the one we are doing for National Lampoon is a kind of tongue in cheek mini games engine. That will be finished in the next month or so. Initially that will be aimed at the US and that has been very favourably received.
…and the third one is Turf Wars?
Yes – in hindsight we should have pushed that game out the door last year. That said we now have a very very good partner for Turf Wars.
Can you say who that is?
We will be making that announcement soon. But they will be launching the game into Europe first and then following it up in the US.
What is the timeframe for that?
End of Q2 is probably realistic for it. But that one takes community to a whole new level.
Can you explain how?
Basically, Turf Wars is about two factions fighting for control over a city. So when you join the game you join one side or the other. So it is all about turf and you have to take as much turf as you can. The way it works is you have a map to find your way around the city and when you find a piece of turf you want to take you attack it. And when you attack it you play a level. And if that turf is occupied it is defended. But you literally take that level by clearing the bosses and taking the goons and you have to avoid traps and obstacles and stuff. But when you take it and own it you then become responsible for its defense. And each time you take a piece of turf you are in credit and you can use those credits to upgrade the defenses of your turf. What it means then is if I try to take your turf the level that I play is not a level that Nephin games has designed, it is a level that you the player has designed. When the game ships, there are 875,000 pieces of turf, so out of the box the game will support 1 million plus players. But thereafter the game takes on a life of its own and the content that you will be playing will be player created.
So those are your three main game projects at the moment. But you also have a patent pending on your community metrics platform? Can you tell me more that?
From a gaming perspective the patent shows itself as how you interact with other people in game. At its simplest level that is the rankings, the buddy system and the messaging. At its most advanced level that is stuff like player created content, that we are introducing with Turf Wars. The metrics (really) come in when we are dealing with a brand from a more marketing perspective. Right now most of our business is based on games that are more licensing orientated than marketing orientated. So while they are branded games, the focus is on generating licensing revenue rather than generating promotion. If you focus instead on the promotional side of it then the metrics become more important.
How do you mean?
For example, if you take WKN, there are 13,000 players, 4,000 regular, we can cut that by saying an average player plays the game for 20 minutes a day, they play typically between 7 o’clock and 9 o’clock. All of this getting towards what on a newspaper would be their ABC numbers. That is sort of the ambient metrics, what players are doing and the activity they are generating. There is also the capability of opting players in. So to provide them with value you ask them to opt in and that gives the brand the possibility of connecting directly to the players. You give us a piece of information that lets you enter into the tournament and at the end you win a prize. So then it becomes more of a promotional tool than a licensing tool.
Will you be managing all that community information here?
We will be managing out of this office but the hosting of it will be elsewhere, for example, for WKN the hosting is out of Amsterdam.
How do you deal with all the different handsets?
Porting is a headache, yes.
Do you do that in-house or do you sub-contract?
We do both. Right now with WKN we are doing the porting in-house. For the US market, for Lampoons we are outsourcing. But we are also evaluating other avenues. Porting is a laborious process and it doesn’t really involve a lot of creativity. Affectionately it would be referred to as grunt work, and as with any grunt work like any grunt work in any industry is best done where costs are low.
Going on your ads on GD.ie you have been hiring a lot lately. How many people do you employ now?
There are 17 of us right now.
Are they all here in Galway?
Mostly here, but we have a guy based out of Switzerland, a guy based out of Berlin and a guy based out of Cavan. And we are using contractors too. I haven’t included them in the headcount but there are people in the UK and in the US on a contract basis as we need them.
Have you had any problems hiring people?
Any particular areas?
Producers. Obviously Tony has filled a big gap there. Game designers are another. We have been very lucky with Ian, not just because he has a good head for game design, but also because he understands the media so well. I think that is another issue, because we are mobile specific, and even within mobile we are community specific. We are not just looking for mobile designers, we are looking for community based or connected mobile designers, which is a tough task. Artists are probably the least troublesome area at the moment. But even still most of the interest is coming from abroad. Most of the local people we have seen have not been mobile specific. Mobile is a little bit like GBA in the sense that of you have a lot of limitations to deal with and knowing how to deal with them is a big part of the job. You have a lot of issues that arise out of the physical constraints.
Is that just because the industry is so young in Ireland?
You need a person who sees those constraints as challenges, rather than shackles. Especially in the artistic side what we have seen are people whose concept art would be fantastic, but not suitable when it comes to a constrained device.
Is that an education failing because people haven’t been trained in this area?
I don’t know. Partly, maybe. Partly too it would be depending on people’s makeup. Like it is possible to do some really stunning stuff on mobile but you really have to design specifically for the device and you have to do your art for the device.
What about programming?
Basically what we are finding that anyone with any experience is outside the country.
How many non nationals do you have?
We have a real confederation. We have a Dane, a Greek, a Russian and soon also a Dutchman.
…and you are still hiring?
We are aggressively hiring. We have 15 people in-house and by year-end we want to be close to 30.
That is fairly rapid growth. When did you start hiring?
I have been at it for a while but the bang really started last March because that is when I pulled in funding and started hiring. Our first hire was last March and that was Nollaig. To deal with the opportunity that we see in front of us we have to continue that.
So in terms of locale, operating out of Galway, does that have advantages and disadvantages?
To be honest it doesn’t make that big of a difference.
People don’t go “an Irish company from where?”
Actually no. The big thing really is that we are an Irish company. It is seen as positive and particularly in the US, it is seen as a huge positive. I mean there is still a great affinity for Irish people in the US and we use that card like everybody else does. In Europe it is a non-issue. It is really about the work.
You said you are going one year now, how have you funded the company?
Our first round was purely private, and we are now in a second round and EI are involved.
Did you find getting a games company in Ireland funded difficult?’
Yea, funding is difficult. Funding is difficult anyway.
Not just because you are a games company?
Well it is more difficult because it is a games company. People will tell you that the venture capital market is buoyant but it is very tough to get funding. It took me two and a half years to get off the ground. The only reason that could happen is because I had been doing consultancy work. I had built up a fairly reasonable business prior so I could sustain a certain period. I don’t think that would be the case for most people. I am no different from most entrepreneurs, I had to do the same things that most people have to do: beg, borrow…
…not the last one?
No, I didn’t steal. You do what you can, you are looking to family, you are looking to your own resources if you have them, cannibalizing your assets. It is a very very tough stage and doesn’t get nearly enough support from the government.
Do you think there is more that could be done?
Well for games companies the biggest issue is risk. I would say there is a big difference between the US and Ireland, and we would want to be more like the US in terms of venture capital, in terms of entrepreneurialism. The biggest issue I see is that if you fail in the US it is embraced and it is actually a positive. It is not as positive as if you succeed, but you have tried, you have failed but you have learned. And the next time you do it there are a whole load of avenues that you now know are the wrong ones, and it will mean that your potential for success next time is much higher. In Ireland failure is still a red rag that is tied around your head.
But there is failure after a good attempt and failure because of complete naiveté.
But even that is ok. Part of the process is to take away the naiveté. And if by providing someone with a small amount of money to go out there and get a smack across the face I think it is money well spent. But right now the only option you have as a starting out company is a feasibility study from the likes of EI or you can go to the county enterprise boards. From EI it is basically 19,500 euros, from the enterprise boards it is half that. 19,500 euros is a very small amount of money. I think for that amount of money there should be a lot more people doing it. Not everyone gets to do one. You have to have a very strong case right now to get one. Now that is not a bad thing in itself but there needs to be something prior. The course I did in NUIG was an enterprise platform programme which took in 8-10 entrepreneurs and brought them through (the start-up process).
Is that an EI thing or an NUIG thing?
It is an EI/NUIG thing. Most of the colleges have them. I know DCU has one, there is one in Cork, GMIT has one as well. You get some funding and you get education. You have typically one day a month where someone comes in and talks about their experiences of starting a company or they talk about something specific whether it is the legalities of starting a company or it is how to approach sales and marketing. It stokes you in terms of thinking about all the different things you need to do to start a company. There should be a lot more of them.
Ok so you think there should be more support for early stage, what about the stage you guys are at?
You were asking specifically about games companies. Games companies in Ireland have the additional problem that there aren’t many people in Ireland that understand them and for that reason most people don’t want to be involved because in their mind the risk is higher.
Do you mean both public sector like EI and private sector like the banks and VCs?
Yes. EI actually are now becoming much more proactive in terms of their support for media orientated companies but going back three years talking to EI even then talking about a games company was a tough sell. But expertise is a problem, not just for EI, expertise for companies in general is a problem and that I guess is limiting for them as well. But for the VCs as well they don’t have the experience of dealing with games companies and because of that wouldn’t understand the space.
Have you had to go outside Ireland then for funding?
No, but we have not done VC funding yet, it has all been private. People describe Ireland as being awash with millionaires, I don’t know if that is strictly true but there is a lot of money out there at the moment but accessing it is haphazard.
Is it networks and who you know?
It is. And even if you have a strong proposition, and have a very good chance of succeeding it is still tough to gain access to the right people requires that you know the right people.
So in the next 3-5 years where do you see Nephin going?
I think that in terms of the company we will continue to grow, inside and outside of ourselves, but we will also grow, not just organically, but more than likely by acquisition and it will be growing not just in Ireland, but growing abroad as well. Already a US operation and a European operation are already in sight. In terms of what we are offering, I don’t think the licensing stuff we are doing will go away, that will still remain a large part of what we do. I do see the marketing side developing much more. Marketing right now is text oriented marketing but people are starting to move towards the idea that entertainment is funded through promotion. But again it is all down to the value proposition. If we are offering gamers a fun experience that they get for less than they would have to pay for it with minimal intrusion then that makes sense for everyone involved.
Bio: Alan Duggan is CEO of Nephin Games.
For more see http://www.nephingames.com/
Nephin Games are located in the Galway Technology Centre, Mervue Business Park,