What's the key to success in the video game market today? We sat down earlier this month to talk with Josh Yguado, President of SGN (www.sgn.com), to learn more about the importance of being nimble in the game market, the company's platform, and hear more about its recent move into real money gaming. SGN is the social and mobile gaming developer headed by former MySpace founder Chris Dewolfe.
For the folks who don't know about SGN, tell us what you're all about?
Josh Yguado: We're the leading developer and publisher of cross-platform, social and mobile games. We have some of the biggest and most popular games on iTunes and Facebook, and really pride ourselves on having games across all platforms. We've had over 250 million installs, and have around 35 million active monthly users. We're definitely one of the larger players in the market, but we're still completely independent. We've developed our own proprietary development and analytics tools, which allow us to build once and distribute across all platforms, which is one of the secrets to our success. We've had twelve of our titles in the top ten titles in the Apple App store, three at number one in the Amazon App Store, and are among the top Facebook games as well. We're growing very quickly, and have around 100 employees, with offices in San Francisco, Los Angeles, and Buenos Aires. Our largest offices is in Los Angeles, which is our headquarters.
You recently made an interesting move to add real betting to your games. How did that come about?
Josh Yguado: The roots of it actually were pretty organic. We have had lots of success with casino style games, which are 100 percent virtual currency driven. We have a popular slot application, and a really big bingo application, so the move was pretty intuitive. We figured out that lots of users would love to not only put money into the games, and not be able to get them out, but actually be able to put money into the games and get it out. For us, it really felt like a no brainer. With Betable, in particular, their business model provides all of the back end for real money gambling. They have the technology platform, and the gaming licenses, which allows us to leverage that capability and focus on what we do best, which is create really fun games that users love, and to continue to provide great content to our user base.
Were there any legal ramifications of that deal, given that you are here in the US?
Josh Yguado We're starting only in the UK, and we're going to expand from there. That's the nice thing about working with a partner like Betable, because they hold all the licenses from a legal perspective, and we're completely covered.
How does this change how you approach free to play?
Josh Yguado: Right now, the majority of our revenues are in the form of virtual currency. Everything we produce is free to play, and there's also an advertising component. For our casino style games, this potentially adds a third revenue stream, via real money gaming. I don't think this is going to completely eliminate the virtual gaming piece of our business. It's going to continue to be really important, especially for our users where real money gaming is not allowed.
Can you talk a bit about your strategy in terms of what kinds of games you decide to develop, and the number of games?
Josh Yguado: Probably two thirds of our games are casino-style titles, in terms of our pipeline and where we're focusing our efforts. A third are time management and other casual, free-to-play social games. We do have a casino orientation, but not exclusively.
How did you end up focusing there?
Josh Yguado: Like anything else, we just saw the opportunity there. We tested a few games, and they just did very well, so we continued to invest in the space. It came about organically, and made strategic sense for us. It's worked so well, we're doubling down on it.
There's a lot of platforms out there, with Facebook, iPhone, Android, Amazon - what's the next thing on the horizon for the industry? Is it all mobile now?
Josh Yguado: We've always believed that all platforms are really, really important to our business. That's why we developed our proprietary technology, where we can build once and distribute across all platforms, including Facebook, iPads, iPhones, Android devices, and Amazon. We're not just focused on mobile now, and we still love Facebook, because they provide lots of the social glue and distribution. We think however, that besides making really fun games with great social features, our ability to produce across all platforms sets us apart competitively.
What's the gaming industry looking at next, and where are things going?
Josh Yguado: That's a good question. As you mention, mobile is in an amazing groth phase. I think the huge adoption in Android is just starting to be realized. iOS still has a lot of growth in front of it, but I do think it's a very fragmented space. There's lots of opportunity for nimble companies, who have a technological advantage. There's been an incredible amount of growth over the last three years, and you never know exactly where it will manifest itself. However, we feel we're nimble enough, and have an amazing talented team servicing players, wherever they decide to play games.
It sounds like being nimble is really important in this industry?
Josh Yguado: It's amazing. If you look back three years ago, this industry didn't exist. Without a doubt, it's changing every day, and is still, to an extent, the wild west. If you can't think quickly, think on your feet, and try to understand and evolve quickly to serve users, you're not going to be able to succeed. That's why it's so important to provide games on all platforms, because the user expectation has become something where they expect they're going to be able to play a game on their iPhone, on the iPad, on a web site. But, not that many companies are doing that in an efficient way. Plus, if one of those platforms starts to pull away, you can take advantage of that, because you're on all those platforms.