06
d'Octubre
de
2016
Act.
06
d'Octubre
de
2016
Even though today everyone recognises the videogame industry as one of the strongest in Catalonia, it wasn't always like that. When in 2001 a group of entrepreneurs led by Xavier Carrillo set up Digital Legends, things were very different. "At that time talking about video games was very difficult. When you went to see investors or institutions they saw you as a nerd, with not much of a business image," Carrillo tells VIA Empresa. This is after filling one of the rooms in La N@VE during the South Summit 2016 conference held in Madrid. Today video games are all the rage and made 100 billion dollars in 2016, with Spain the eighth largest market and Catalonia accounting for 25% of the industry's companies in the State as a whole.
Digital Legends chose Barcelona, which this week welcomes the Games World fair, as "a strategic decision". Carrillo and his cofounders were working in Madrid, but decided to set up Digital Legends in the Catalan capital, where "there was already a vision of the future and potential."
"There were frontline universities and a tradition in the comic industry. Moreover, the Barcelona brand helps us a lot. People immediately think about coming to see you," says the company's CEO.
Working with the largest
In 2001 Digital Legends was a company for PC and console games. However, in 2003 everything changed when it made contact with Nokia. "They already had a vision that mobiles would become the future devices for games, even though they ended up failing years later to implement it," says Carrillo. Yet, at that time, for them to be able to work with Nokia, "which was number one in the world", was a great opportunity. "We learned a lot and we became one of their main teams," he recalls.
This connection opened up the doors of Apple, which when it began with games, contacted them because of what they had done with the Swedish company. "Apple does things very quickly and within a month we were meeting Steve Jobs and his whole team, preparing the project," recalls the Digital Legends CEO.
"They began to call us from Disney or Electronic Arts, and it is very difficult to say no to those people," admits Xavier Carrillo when talking about a stage in which they basically devoted their time to making products for others. "We made a product with Universal about Bruce Lee that appeared in the Sony SuperBowl ad," he says as an example of the reach their work had.
A change of direction
Talking about this time, the Digital Legends founder says it helped them "to grow the team, acquire knowledge and learn how to work with third-party IPs." However, at the end of the day "instead of it being an advantage, you end up paying a price in opportunity because you don't do anything for yourself. If the products work, the success goes to the company. But if not, then the developers get the blame."
A change in mentality began with the search for investment. "We came across very expert people who told us that what we thought of as a plus (stability, balanced risk) was a distraction and a negative point." So, Digital Legends took a "fairly aggressive" turn: "You have million-dollar contracts with companies that give you visibility, which seems a lot better when compared with creating your own product." In the end, though, the strategic change "was the best decision we have made," insists Carrillo.
This change took place in 2012 and meant they had to let go the people linked to these contracts. "It was a real drama having to tell 20 people that it was over," Carrillo laments.
Different and specialist
Today, Digital Legends employs 60 people and enjoys great success with its two games: The Respawnables and The Afterpulse. The first is already four years old, with more than 35 million downloads and between 150,000 and 200,000 active users who play every day. "This game puts us in the segment of millions of euros a year," he says.
Screenshot of the Digital Legends video game, 'The Afterpulse'
The Afterpulse has been even more successful, and is in the segment of dozens of millions of euros a year. "It allows us to have a sustainable strategy and not to depend on one single hit that works, which would be suicide. We do things little by little and we are specialising," says the head of Digital Legends.
Carrillo does not tire of repeating that social games in particular "are not a product that you launch and that is it. It is a service that you constantly have to update." He explains that Digital Legends updates its games every three weeks and is looking into doing it every week. At the same time, he warns, taking feedback from the players into consideration is basic. "We have two people devoted just to that because we have found ourselves getting 30,000 emails on a launch day. It is very important to listen to the community."
"People want to pay"
For Carrillo, a large part of the current boom in the sector can be explained by the false hope of creating a spectacular phenomenon like Candy Crush or PokémonGO. "It can happen that someone brings out a game and becomes rich. But a lot of people thought that it was the norm when it is the exception. If you set up a video game company, you will most likely lose money," he points out.
Yet, he also speaks up for the "different levels of success" that exist in the sector. "A small company can have a few million sales and a positive cash flow and be profitable. The important thing is to really understand where you are." He goes on to point out the different levels: thousands of euros, hundreds of thousands of euros, millions of euros, dozens of millions of euros or hundreds of millions of euros.
It is a business generated by freemium models. "You give a game away for free that people download and can play forever. But then there is between 1 and 2% of players who want a different sort of status, to progress more quickly, and so on, and who want to pay for it." Carrillo insists that "it has taken a lot for us to understand and assimilate it, but people want to pay. As with paying more for a bag or a car brand, they want to do the same with video games."
'The Respawnables', the Catalan company's other successful video game
Digital Legends chose Barcelona, which this week welcomes the Games World fair, as "a strategic decision". Carrillo and his cofounders were working in Madrid, but decided to set up Digital Legends in the Catalan capital, where "there was already a vision of the future and potential."
"There were frontline universities and a tradition in the comic industry. Moreover, the Barcelona brand helps us a lot. People immediately think about coming to see you," says the company's CEO.
Working with the largest
In 2001 Digital Legends was a company for PC and console games. However, in 2003 everything changed when it made contact with Nokia. "They already had a vision that mobiles would become the future devices for games, even though they ended up failing years later to implement it," says Carrillo. Yet, at that time, for them to be able to work with Nokia, "which was number one in the world", was a great opportunity. "We learned a lot and we became one of their main teams," he recalls.
This connection opened up the doors of Apple, which when it began with games, contacted them because of what they had done with the Swedish company. "Apple does things very quickly and within a month we were meeting Steve Jobs and his whole team, preparing the project," recalls the Digital Legends CEO.
"They began to call us from Disney or Electronic Arts, and it is very difficult to say no to those people," admits Xavier Carrillo when talking about a stage in which they basically devoted their time to making products for others. "We made a product with Universal about Bruce Lee that appeared in the Sony SuperBowl ad," he says as an example of the reach their work had.
A change of direction
Talking about this time, the Digital Legends founder says it helped them "to grow the team, acquire knowledge and learn how to work with third-party IPs." However, at the end of the day "instead of it being an advantage, you end up paying a price in opportunity because you don't do anything for yourself. If the products work, the success goes to the company. But if not, then the developers get the blame."
A change in mentality began with the search for investment. "We came across very expert people who told us that what we thought of as a plus (stability, balanced risk) was a distraction and a negative point." So, Digital Legends took a "fairly aggressive" turn: "You have million-dollar contracts with companies that give you visibility, which seems a lot better when compared with creating your own product." In the end, though, the strategic change "was the best decision we have made," insists Carrillo.
This change took place in 2012 and meant they had to let go the people linked to these contracts. "It was a real drama having to tell 20 people that it was over," Carrillo laments.
Different and specialist
Today, Digital Legends employs 60 people and enjoys great success with its two games: The Respawnables and The Afterpulse. The first is already four years old, with more than 35 million downloads and between 150,000 and 200,000 active users who play every day. "This game puts us in the segment of millions of euros a year," he says.
Screenshot of the Digital Legends video game, 'The Afterpulse'
The Afterpulse has been even more successful, and is in the segment of dozens of millions of euros a year. "It allows us to have a sustainable strategy and not to depend on one single hit that works, which would be suicide. We do things little by little and we are specialising," says the head of Digital Legends.
Carrillo does not tire of repeating that social games in particular "are not a product that you launch and that is it. It is a service that you constantly have to update." He explains that Digital Legends updates its games every three weeks and is looking into doing it every week. At the same time, he warns, taking feedback from the players into consideration is basic. "We have two people devoted just to that because we have found ourselves getting 30,000 emails on a launch day. It is very important to listen to the community."
"People want to pay"
For Carrillo, a large part of the current boom in the sector can be explained by the false hope of creating a spectacular phenomenon like Candy Crush or PokémonGO. "It can happen that someone brings out a game and becomes rich. But a lot of people thought that it was the norm when it is the exception. If you set up a video game company, you will most likely lose money," he points out.
Yet, he also speaks up for the "different levels of success" that exist in the sector. "A small company can have a few million sales and a positive cash flow and be profitable. The important thing is to really understand where you are." He goes on to point out the different levels: thousands of euros, hundreds of thousands of euros, millions of euros, dozens of millions of euros or hundreds of millions of euros.
It is a business generated by freemium models. "You give a game away for free that people download and can play forever. But then there is between 1 and 2% of players who want a different sort of status, to progress more quickly, and so on, and who want to pay for it." Carrillo insists that "it has taken a lot for us to understand and assimilate it, but people want to pay. As with paying more for a bag or a car brand, they want to do the same with video games."
'The Respawnables', the Catalan company's other successful video game