100 Billion Dollars.
That’s what the video game industry will be worth in less than 3 years. 60% of the industry revenue will come from mobile and online gaming by 2017. Much of it from Asia.
The latest consoles for PlayStation and XBOX cost between 300 to 400 dollars, with the video games themselves at nearly a fifth of that price. For the average player, a game can take anywhere between a week to a month to finish, with greater chances of replay with multiplayer options. This new element has played a role to create in-game purchase options in most mass gaming experiences.
That said, the industry produces & publishes 10-15 memorable experiences every quarter, around 50 per year. As the cost of the consoles and games has risen side by side, cash strapped gamer’s are turning to alternative mediums of game acquisition. It would seem that Netflix was poised to come to their rescue. But in 2012, during its fourth quarter earnings call, Netflix announced the discontinuation of plans for a video game disc rental-by-mail service called Qwikster. Because now you can download PS, XBOX games on your console. At our current pace, it is anticipated that In 3 to 5 years Pakistan will reach the speeds needed for downloading the games.
Till that time comes, players are turning to rent & share models like GotGame.pk, a business tapping into the retail side of Pakistan’s gaming industry. We met Zamin Zaidi, the ventures’ founder and lead visionary.
Do we have a gaming industry?
Currently, Pakistan’s gaming space consists of developers and publishers focusing on the international market, with some mobile-gaming exceptions created for movie tie-in’s.
You’re exclusive to consoles, even though PC is a huge potential market. How many of the gamer’s in Pakistan are strictly console based?
According to data from Facebook, which is admittedly partial, between 700 to 800 thousand people have listed PlayStation and XBOX in their interest. Data from Google reveals over half a million game related searches were made last quarter.
Your current model relies on existing inventory. Any plans to make this an online market place where game owners and renters can meet?
There was an initial thought along those lines, but after crunching the numbers, we found it to be counter productive to the larger goal. Sure, we could become a publisher and earn via quality CPM, but the cost-revenue ratio was too high. That and exchanges undercut our model. If the community picks up too much, and isn’t managed with an agile mindset, there can be quality issues.
According to your research, how much do Pakistani’s spend on console video games?
Console players in Pakistan are spending between PKR 30,000 to PKR 40,000 every month on original games. That’s the cost of the consoles themselves, and accounts to PKR 300,000 per year, not counting the accessories and in-game purchases. Our ventures offers players a chance to save over 90% of that annually with a monthly fee of PKR 1,400, security deposit of PKR 4,000 and a one time sign up fee of PKR 1,500. That’s PKR 22,300 per year – its cheaper than a console, as it should be.
Was this always your pricing structure?
Not initially. We didn’t have the security deposit, and added it on due to ethics issues wherein some players refused to return the games, often times claiming to have misplaced it, among other clearly fabricated claims. So we now have contingencies in place that are accepted to our audience which isn’t very price sensitive, especially given the enormous savings.
Why haven’t you worked with online markets like Kaymu?
So we’ve just started and don’t want margins affected by a 3rd party, otherwise online market places were strongly considered. When our own online assets generate the required returns, we may explore other channels of revenue.
Why don’t you rent out the consoles as well?
Consoles are priced above PKR 40,000, and no security deposit would make it economical for the player audience.
Can people sell their games to you?
They could but we would rather not get into that. The leg work involved in quality assurance is hectic. If I buy a game and it stops working half way, getting my money back is a far fetched notion. We’re currently sourcing brand new games from Amazon in the US and focusing on building the customer base, new & repeat.
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