Majesco ‘Very Far Along’ in Bringing More Brands to New Game Platforms

Majesco Entertainment is “very far along in the process of signing up many new, attractive, recognizable brands” that the game publisher plans to bring to “the many new platforms,” including the Kinect for Xbox 360, PlayStation Move for the PS3, and the coming 3DS, CEO Jesse Sutton told analysts in a Tuesday earnings call. The 3DS will launch in the U.S. after its Feb. 26 and March 25 introductions in Japan and Europe, respectively.

The publisher will release “at least three more titles” for the Kinect this year after finding success with its first title using Microsoft’s motion sensor, Zumba Fitness, Sutton said. The company sold more than 1 million units to date of that game in the less than four months it’s been available, and “reorders continue to come in on a weekly basis as the sellthrough remains strong,” he said. The game has had “real legs … with momentum continuing long after the holiday season has passed,” he said. Majesco “saw very strong sellthrough” on the game in January and February, he said. The company backed the game’s release with a “multi-million dollar” marketing campaign with wide-ranging cross promotions through the Zumba fitness network, Sutton told a Wedbush investor conference in New York on Wednesday. Majesco has global rights to make games based on the Zumba brand, he said. Asked if Majesco was developing more Zumba games, he said only, “We're working with the Zumba fitness group right now to bring more Zumba game experiences [in] the coming years."

Majesco is “also very excited about the prospects for the Nintendo 3DS, which comes out in just a few weeks,” Sutton said in the call. The publisher will “support the 3DS with at least six titles over the balance of this fiscal year,” he said. It will release Pet Zombies for the 3DS “later this fall,” and that will “likely be the first of many releases from us on” Nintendo’s handheld autostereoscopic 3D game system, he said. Majesco’s goal is to continue focusing on established brands, and “if we wanted to build innovative products that might not be brand-oriented, we would do it on a platform like the 3DS” because that’s “a new platform where new innovative products are likely to get well-received early in the product life cycle,” he said.

After attracting more than 750,000 active users to its Cooking Mama Friends’ Cafe on Facebook (CED March 9 p6), Majesco plans to “have at least three social games coming to Facebook this year,” Sutton said. One “still unannounced social game … will be supported by a significant brand” that he didn’t name. He predicted that “as the social game market begins to mature, brands will become more important than ever and will be critical for a game to climb above the clutter and get noticed.” Majesco was “not prepared to share financial details” on its Facebook game yet, Sutton said. The company is still “in the process of learning the Facebook platform,” he said. Its Facebook strategy is to release a game on the social network and put “very minimal marketing dollars behind it in order to learn,” as well as “generate some user base, learn about our retention capability, learn about the balance of the game play, learn about how it’s monetizing,” then “tweak it as often as need be. And when we feel that the product is truly ready and prepared for a large marketing launch, we'll do just that,” he said. Majesco was still “analyzing all the metrics” for the game, and “we intend on continuing that probably for the next four to six weeks,” he said. After that is done, “you'll see, probably, a significant marketing launch on our end that would hopefully generate a lot of interested users and significant retention, hopefully, realizing monetization,” he said. “The beauty about creating social games on Facebook is the ability to analyze every single metric that results from the game play experience that the customer is having,” he later said. But he said Majesco was “at least four to six weeks away from any meaningful marketing dollars going into” its Facebook initiatives, he said.

The version of Majesco’s Greg Hastings Paintball 2 that’s being released for the PlayStation Network “later this quarter” will “be a download-only title for” Sony’s online service, Sutton said. The PS3 game will be Majesco’s second title to support PlayStation Move and “will be one of the few shooters to support the motion-based controller,” he said.

"The digital landscape is exploding,” Sutton told the conference. There are more than 290 million Facebook users playing social games; more than 160 million Apple mobile devices have been sold including the iPad, iPhone and iPod Touch; 10 billion applications have been downloaded from the Apple Store; and there are more than 350,000 apps available there, he said. The virtual goods market, meanwhile, accounted for $1.5 billion last year and that’s expected to grow to $2.2 billion this year and $4 billion by 2014, he predicted.

Other platforms that Majesco is supporting include Apple’s portable devices and Android mobile devices, Chief Financial Officer Michael Vesey said in the call. Meanwhile, it’s “investing in several social games utilizing the freemium revenue model and micro-transactions” on the Facebook platform, he said.

Separately at the Wedbush conference, Take-Two Interactive CEO Strauss Zelnick said emerging platforms were expanding the game market, pointing to the Apple devices, direct-to-PC platforms from Steam and Direct2Drive, OnLive’s cloud-based game service, and social networks including Facebook and Twitter. We asked Zelnick what his company’s plans were for Twitter, and Take-Two spokesman Alan Lewis said the company had only been using that platform to market its games so far, although we can expect to see more initiatives there.

Take-Two has no plans, Zelnick said, to offer any of its core AAA games for free despite the growing popularity of the free-to-play business model in which companies make their money by attracting a large user base and then making revenue from micro transactions. There will, however, be platforms, such as Facebook, where it will experiment with free-to-play on smaller games, he said.

Zelnick also stressed the importance for games, unlike other forms of entertainment, to get strong reviews from critics. Making good games isn’t enough anymore -- they need to get great reviews to be top sellers, he said, calling merely good “the new bad."

Despite strong growth in digital, online and mobile game sales, “the majority of revenues [will] continue to come from console revenues through at least 2013,” THQ Chief Financial Officer Paul Pucino said at the conference later in the day.

"There’s not a very significant increase in cost” involved to bring 3D games to market, Pucino also said. THQ has various games it will release for the 3DS “over the next six months,” and it recently shipped the game sequel de Blob 2 in 3D for the PS3 and Xbox 360, he said. But he said the 3DS offered the largest potential for 3D’s entry into the game market now.

THQ plans to ship new software for its uDraw GameTablet peripheral for the Wii every three to four months, Pucino said. In doing so, it will promote “not only the software, but … the tablet as well,” he said. The company expects to sell 1.7 million GameTablets cumulatively through its December and March quarters, the back half of its fiscal year, he said. The device launched in Europe last week, but he offered no sales data for that market. Prior to that, uDraw shipped only in the U.S., for the 2010 holiday season.

THQ just hired the 100th employee at its new Montreal studio, Pucino also said. The publisher plans to hire a total of at least 400 people there “over the next several years” as part of a commitment it made to the Canadian government, he said.

About 4.7 billion mobile phones have been sold globally, and about 10-12 percent of them are smartphones, Glu Mobile Chief Financial Officer Eric Ludwig told the conference. As people upgrade their phones to smartphones over the next three years, “we see this as an addressable market” that will increase from 400 million to 4 billion devices that Glu “can address,” he said. Two of the five “freemium” smartphone games that Glu recently launched as part of its retooled strategy have been successful, he said. Especially strong was Gun Bros, which was downloaded 6.8 million times as of last week -- 1.3 million on Android devices, the rest on iPhones, he said. With freemium games, where he said most of the growth in the sector is, Glu offers a game for free, but then charges a premium for advanced features. If a game is successful on iPhones, Glu now intends to extend it to other platforms including Android and Facebook, Ludwig said.