John Maffei is CEO of Los Angeles-based Xfire (www.xfire.com) an online community focused on online gamers, which is now owned by Titan Gaming. The firm is announcing today that it has just reached its 17 millionth registered user, having added more than 300,000 new users since its August acquisition. We chatted with John about Xfire, Titan Gaming, and his ultimate vision for the combined companies, and also asked him how the firm managed to get the backing of what seems like every single angel/super-angel in Los Angeles.
First off-explain what Titan Gaming is?
John Maffei: Titan Gaming was originally started by two McGill students, who were hard-core, Counterstrike players. Like all good players, they figured out they needed more tools to help them out, so they started out a business, and built out a very robust platform for tournaments for Counterstrike and other games. In 2009/2010, I joined the team which had been building out the Titan platform, with the idea that the competitive gaming model was very attractive. The competitive/skilled gaming model is where players compete in games for points, items, and sometimes for cash. In August, we acquired Xfire. We were super excited about doing that, because it was a great community of gamers--the best gamers around--and was not only an interesting business to own, but had a community of people we could offer things to.
Talk about why you did the acquisition?
John Maffei: First of all, the core Xfire business is outstanding. right now, they have a business which people are extraordinarily interested in. Xfire has had over 17 million downloads, and has a huge community of gamers who are online, with hundreds of thousands online at any time. They've been able to accomplish one of the hardest thi ngs, which is to create an incredibly robust community, with a network effect. That business alone, without the skilled gaming offering, is already extraordinarily interesting. But, the best thing is, we're able to take skilled gaming and host competitions for Xfire, and with other sites that partner with Xfire, and allow gaming publishers to monetize their games. Xfire has an audience perfect for those competitions, which can be for prizes, virtual currency or virtual items, or physical prizes. Plus, there's a small, but lucrative number of players interested in cash competitions.
Is that something new to the market?
John Maffei: Skilled gaming has been around, and has been prevalent over a decade. There are other sites, such as Worldwinner, which have some very healthy and successful businesses. However, they have been more targeted towards female gamers. Xfire's audience is a different kind of gamer. It's more male, and more hard-core. The top games they like to play are things like Call of Duty, World of Warcraft, and League of Legends. Those are different types of games that currently are in skilled gaming sites, and we're incredibly interested in bringing that model to that market.
You've got a very impressive list of what seems like very local angel investor. How did that group come together?
John Maffei: Two things have to happen, in order to get anyone to invest. One, is they need to have a management team they believe it. Fortunately for us, we've brought that credibility to the table. You've got to be able to execute on the vision you've laid out, and you've got to be in a good market. The second is, is there a business model that works. Skilled gaming is an amazing model. We take a percentage of the pot for the wager, which is a model that works. Between having a compelling story, and a strong management team, we've been able to get interesting people to back the company.
Speaking of skilled gaming, do you run into regulatory issues with that model--is it legal everywhere?
John Maffei: It is not legal in all fifty states. It is, however, legal in thirty nine states. Those states account for 80 percent of the U.S. population. It's also legal in Canada, and in most of Asia.
You're announcing today that you've just hit 17 million users. Is this from something you've done since the Xfire acquisition, or is this just continued growth from the asset?
John Maffei: We took over the asset in August. The good news is, growth has continued at the same rate, and we've even seen a small uptake. Users are incredibly interested in using Xfire. Skilled gaming hasn't changed what Xfire does today, which is provide a communication vehicle for gamers--things like chat, sharing screenshots, and matchmaking.
So, when do you expect to add the skilled gaming component?
John Maffei: We will be launching an initiative in Q4 and Q1, with different partners.