GG: You announced that you sold some of your titles and their development teams to Zynga for 100 million dollars. Would you give us some more details about the deal?
Ömer: Peak Games was founded in 2010. Over the past 7 years, we focused on two genres on mobile gaming space. One of them was casual puzzle games, which Peak Games currently is one of the leading players globally, and also board, card and Okey based games. In the past 7 years, we reached more than 500 million users globally, focusing on this strategy in 150 countries, all over the world.
Currently Peak Games is one of the top ten game developers in United States with its titles like Toy Blast. And we recently launched Toon Blast in August and it’s going really really fast. We got 3 million new users in US every month only for Toon Blast. and our goal is to make Toon Blast one of the top-10 most popular games.
On the other hand, 101 Okey Plus and Okey Plus are the most played games in Turkey, Spades Plus and Gin Rummy Plus are among the most played card games in United States. Of course, there were a number of large companies interested in these products and we chose Zynga due to their approach and the value that they can add to these products in the long term. We decided to entertain such offers so that we can focus on our immense growth on the casual genre. So over the last couple of months, we have been discussing and we recently announced to transfer all these game assets to Zynga for 100 million dollars. This is, we believe, a huge step for both the Turkish mobile ecosystem, Turkish gaming industry and for the Peak Games.
From now on, our card games will be under Zynga brand and the team that developed these games will move on to Zynga and be still located in İstanbul, Turkey as Zynga Turkey office. And this is the strategic thinking behind the deal.
GG: So could we say that you approached Zynga…
Ömer: There were a number of interested parties for our games, but we chose Zynga for two reasons. The primary reason is they are one of the leading card game developers in the world already, the new managements has been calling their card games as, Forever Franchises, , and our portfolio also was very fitting with that category. So the moment we started talking among the interested parties, Zynga became the number one destination very quickly, because they know this business very well. We also believe that when these games go forward under Zynga, they will continue being successful.
“So the moment we started talking among the interested parties, Zynga became the number one destination very quickly, because they know this business very well.”
GG: It’s a very interesting deal, because we see merger and acquisitions or big investment deals on that scale, around hundreds of millions of dollars, but this is different. Peak Games kept its independence, equity, structure intact after this deal. That’s something we haven’t seen before, you are just transferring your assets and IPs.
Ömer: True, it’s a very different deal in that regard. This is an asset sale, so 100 million dollars will go to Peak Games to further grow our games in the casual mobile gaming space. And there is no changing in our current shareholding structure. In Turkey or within the mobile gaming ecosystem, asset deals are not very common. There are number of reasons behind this, but in this case, we thought this structure is worth it, because we wanted to continue growing Peak as one of the best mobile gaming companies in the world, we want to do that and to achieve that, we need to focus, and this process will help us achieve this goals.
And in terms of the technology ecosystem, there weren’t any investments at this scale, it is not common in Turkey or in Europe, it’s very rare. Creating this kind of impact from Istanbul, increases trust and hope for the whole ecosystem. We are happy that we will continue as Peak Games, but we are also happy that Zynga will have an office in Turkey and our friends in the board and cards studio will continue as Zynga Turkey
GG: So how about the staff you are transferring to Zynga? You are losing a portion of your staff and they are moving to Zynga. How is their reaction to this? Are they happy with it? Are there any privileges for them?
Ömer: No, they will continue working as if nothing changed in their life, except that the umbrella they are under has changed. So we made sure that, this will be the case. But generally, the reaction we got was very positive and they are very excited to continue their journey and be part of yet another leading mobile game developer in the world.
GG: How many developers you had before the sales? And how many of them were Turkish?
Ömer: Around 50 engineers. Most of them, I would say more than 95%.
GG: Now some of them are going to Zynga, and because we don’t have a very mature developer ecosystem, aren’t you worried that about finding new people?
Ömer: I have to underline that 7 years ago, when we found the company, we didn’t have a mature gaming development ecosystem anyway. So for most people who joined Peak, we have never looked for prior gaming experience and they honed their skills working at Peak and became some of the best engineers in the industry. And part of our team are moving to Zynga Turkey, because they created their value there. But as for us, we are very fortunate that we have great universities in Turkey, great engineering schools. And knowing that we have a lot of talent in Turkey that we can tap into and bring them in, and teach them more about mobile gaming and see them adapt. We don’t think its going to be a problem, we have done it in the past.
“We are very fortunate that we have great universities in Turkey, great engineering schools. And knowing that we have a lot of talent in Turkey that we can tap into and bring them in, and teach them more about mobile gaming and see them adapt”
GG: Back then, ecosystem was small but Peak Games was small too. Do you have the energy to train all the new people?
Ömer: Yes! I don’t think we have the luxury to have no energy, because we believe we have just started. And we need to have the biggest talents and some of them join us as raw talents and they hone their skills at Peak. We will continue doing that as long as Peak Games is here. We’ll have great new engineers joining Peak, and getting better and better. So in that regard, it’s a challenge, for sure some ecosystems are more mature, you can have more access to talent. But for us that was never an obstacle. So from now on, we don’t believe it’s going to be an obstacle as well.
GG: The assets that you sold to Zynga, are larger in numbers in your portfolio but they were not best performing games in terms of revenue.
Ömer: Let me put it this way: All the games we transferred are the number one in their own category. They are extremely valuable and amazing businesses in themselves. Their growth rate is quite high compared to industry standards. Our goal with this deal is enabling teams to focus on their genres and become the best they can be.
GG: What’s interesting is you released Toon Blast just a few months ago and it’s performing very well. And revenue-wise Toon Blast was generating more revenue than all the titles you have sold, at least when you check out the AppAnnie, it looks like that.
Ömer: I see where you are coming from. The nice part about casual puzzle games is, it’s casual so, it is suitable for all age groups, all genders and all geographies. Once you have a great product like Toy Blast or Toon Blast, the whole world is your target market. So you can grow that game very fast. And because you can reach millions of users, obviously the revenue increases, but also you need to market the product as well. So it’s a great business, board and card games was a different business. More traditional, more niche, but very strong within its own genre. Our board and card games portfolio alone generates more income than many publicly traded companies in Turkey.
101 Okey Plus is the most played game in Turkey by a far margin. Top grossing as well. But 101 Plus does not have a market in Japan or US, because we, Turks play it, in US people play Spades. So Spades Plus is a number one cards game in US, within that community. So it’s a different kind of a business, I don’t believe it’s right to compare both, because both of them have pluses and minuses but to achieve the scale, obviously Toy Blast and Toon Blast have a much bigger potential in terms of the user base that they can reach.
GG: You created a similar value with just one title in this genre. We can say, because we can compare the revenues of the sold assets.
Ömer: Yes, that’s why we say they were a small part of the big cake. You can reach millions of users and once you have a great title that has great metrics, great visuals, AAA product, then the whole world becomes your playground. And we want to grow these games and make them the biggest titles out there and make Peak Games as one of the biggest mobile gaming companies in the world, and to do that we need to focus on this genre.
GG: Also maybe now you have less users, but higher liquidity and you are more focused and you have a smaller team. It also means Peak Games is much more nimble right now. So you can focus on those genres, but you can also maybe act much easily.
Ömer: That’s correct. We will actually have a relatively smaller team. And in our business, we never see that as huge disadvantage. On the contrary, if you are focused and if your aim is to achieve global level of success, having a smaller and much more focused team can be a big advantage, because you can be very agile, you can make decisions very quickly. But it’s also a challenge for us, we are very excited about it and it’s both a challenge and a blessing.
GG: Are you aiming to open up new offices? Maybe going more for globally for production…
Ömer: At the moment, no. We are proud that we are creating value from Turkey, from İstanbul. And as your asked before, talent is always a challenge, but never an obstacle. So we will continue creating value from İstanbul and in the future, if we decide to open a studio, we will. But it is not in our focus in the short term or the long term. We are very committed to doing everything from here, hopefully.
“We want to grow these games and make them the biggest titles out there and make Peak Games as one of the biggest mobile gaming companies in the world, and to do that we need to focus on this genre. 100 million dollars that we got from this transaction will help us achieve that, hopefully.”
GG: You found a way to be very successful in this casual puzzle genre, and we see that Toy Blast is so successful, it is like one of the best performing games in the whole world, especially in the US market. But also Toon Blast became very successful. What’s the secret that you found that it’s working well for us, that doesn’t go for many companies. Even big companies like let’s say King, who was very successful in this genre, but not with all their titles.
Ömer: I wish I had a one liner that I would just give it out, but it was a lot of trial and error, a lot of failed prior attempts and evolution and progress. The team that built Toy Blast has now been together for more than 2-3 years, but most of them had no gaming experience prior to joining this team. The secret is becoming a great team, working together for a very long time, not being disappointed by small roadblocks or small failures, but learn from your mistakes and get better and better as a team. I think that’s is the only secret sauce for becoming a great team.
And we are proud of their achievements, our achievements in that regard, and we are aware that for most gaming companies it is not easy a feat to achieve. We are very proud of our success, this is a good level, we like it, but we need to do more. If we just stay here 5 years from now, that means we are not progressing enough, we are not trying enough, we are not taking enough risks etc. We need to continue to evolve to become the best out there, right now we are up there but not at the top. So, to go to the top we need to build up on what we have been doing, which is trying to create a great gaming experience for a huge user base.
GG: Where do you think your strength lies? In game development or in marketing or monetization?
Ömer: User retention is what we cherish the most, but the down side of it is that we don’t focus much on monetization. But it comes as a benefit. If the users are happy with the product, they play a lot and they value what you create, so they choose to pay whenever they want. Because you are reaching a lot of users, paying users are also a lot. For us, I can say retention is very very important.
I believe there is this a wrong notion within the industry that you need to launch a game every year, every six months, see what sticks etc. If you have some mediocre success, you just shift your focus on what is next, and not take care of your product. What we have seen in mobile gaming is that if you have a great product, you need to take care of it and you need to add a lot of content and a lot of new stuff to the gamers. Because it’s not easy to create that kind of metrics, so once you have that, you need to focus all your attention, marketing and all your efforts within the company to make it a bigger success. But if you have a great product like Toy Blast, like Toon Blast, then the lifetime of the games are very very high as long as you cater to them cater to userbase, create new content, and continue create value for your userbase. That’s what we have been doing and that’s what we will continue to do.
“I believe there is this a wrong notion within the industry that you need to launch a game every year, every six months, see what sticks etc. If you have some mediocre success, you just shift your focus on what is next, and not take care of your product.”
We won’t launch many new products, we just launched Toon Blast, so all our focus is continue growing Toy Blast and Toon Blast. Let’s see what’s coming next, but these two gigantic potential products are a huge plus. And one last thing I can say is having a small team allows us to be very agile and very hardworking. And if you are a very agile and very hardworking team, it also transcends to success. I think it helps.
GG: We talked about talent pool of İstanbul, but if you go past that, when you look at developing games in Turkey in İstanbul, what are the advantages that you see that help you out, other than having a beautiful Bosphorus view from your office? : )
Ömer: We think, generally, our engineering education is very very strong. If you are in one of the top ten universities, the education you get is on par with the best universities of Europe or US. So, in terms of engineering knowledge the foundation is quite strong, I think that is a big plus. And second, we are a hard working nation, and there are a lot of young people in İstanbul that want to make global impact, be part of a company and a product that has global ambitions.
I think we have a distinct advantage, because there are very very few companies that are operating at scale in US as we do. As you know 99% of our revenues comes from international markets and 70% comes from US. So, this is a very unique position to be in İstanbul and we are happy to be top destination for a lot of very bright, young and impact making individuals.
GG: Anything else you would like to add?
Ömer: Congratulations to GoodGamers.biz. We are looking forward to working closely in the future and happy to have with this kind of platform.