IS427:AY1314T1 Europe (G1) - Organizations: Ghent: Graphine

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Graphine-Logo.png

About Graphine

Graphine is a Belgian startup that develops a graphics middleware for games. Its mission is to deliver HD texture technology that enables game developers to focus on their creative core challenges. Graphine focuses on delivering technology in texture streaming and compression, which makes it possible to create, distribute and visualize large amounts of texture data for video game development. Their main product, the Granite SDK, is a software development kit with three core components: a custom texture compression codec, transcoder module (quartz) and texture streaming library. Graphine specializes in technology for real-time computer graphics that can substantially increase the amount of unique detail in virtual environments. The Graphine team underwent a strong evolutionary phase during the program. It originated within the IBBT-ICON project LLINGO. Owing to their research background, their main challenge was translating the technology into an actual product, followed next by the challenge of defining the value proposition for their customers. This was a process which entailed a series of steps in quick succession.

Founding Team

  • Aljosha is the born entrepreneur. His childhood fascination of video games and computer technology led to the unavoidable master’s degree in ICT and in software engineering. High performance, highly parallel, beautifully designed software is his engineering passion. Next to technology, Aljosha has a strong interest in the technology industry and in bringing a product to market. His research career at the Ghent University was focused on doing all sorts of cool things with (GP)GPU’s and real-time 3D rendering. On the side, he battled others in business plan competitions. A team player at heart, Aljosha couldn’t keep all that cool technology for himself. So, together with the team that can make it happen, Aljosha founded Graphine that can bring it to the world. He now spends his time as CEO of this company.


  • Charles Hollemeersch is Graphine's technology octopus. Having worked in games, avionics and research, Charles knows what it takes to deliver rock solid software that finishes on time, while incorporating the latest and greatest technology evolutions. Charles started in the games industry by releasing the popular Tenebrae mod on the web. Tenebrae was first to feature fully real-time lighting and shadows in a game. After slowing down Belgian's biggest internet service provider due to its popularity, it was only a matter of time until he got headhunted for a job in games. As a graphics programmer at Splash Damage, he helped to co-develop the MegaTexture technology in cooperation with id Software. Charles then went on to work at Barco, where he developed graphics monitoring units for plane cockpits - crashes or graphics glitches were simply not an option. Having finished his PhD in real-time graphics and large image dataset processing, Charles joined Graphine as a co-founder and CTO.


  • Bart is the technology optimizer. Even though he has mainly worked in research , he knows it all comes down to getting a good user experience by having your results on the screen in time. At an early age Bart was fascinated by the high tech and real time aspects of games and video rendering and started working on his own video coding algorithms and game assembly optimizations. He never got around to publishing his hobby results, so he fixed that by working as a researcher at the University of Ghent. There, when GPUs were still at their infancy, Bart was already manipulating shader transistors in GPGPU applications accelerating video coding. As one of the first to work on CUDA technology, he succeeded in his mission to deliver faster next-gen and ultra-hd (yes, ultra-hd, that’s 8k by 4k pixels) video and image compression, finished his PhD, but not while not having some fun on accelerating video gaming in the cloud. Finally, he did his part for human kind when he worked on accelerating medical imaging algorithms for tomographic reconstruction. Bart is now with Graphine as a co-founder and CSO, that is, chief science officer.


Brief History & Projects

  • The origin of Graphine: Graphine originated within the IBBT-ICON LLINGO project. The founders embarked on an iBoot program (a coaching program for ICT startups) and won, which allowed them to proceed to the final round of the iStart program and receive seed investment from iMinds. Thereafter, they received a substantial grant from IWT, the Flemish government agency for Innovation by Science and Technology, which gave them capital to continue innovating for at least two years.


  • iMinds - formerly known as the Institute for Broadband Technology (IBBT), an independent research institute founded by the Flemish government to stimulate ICT innovation.


  • Larian Studios: Integrated texture streaming library ‘Granite’ in their latest game, Divinity Dragon Commander. Progress: reduced video memory & storage requirements, applied more unique texture details, added more game levels - released on 6th August 2013


  • Featured in //Build/ 2013 - Microsoft (New Windows 8.1: DirectX tiled resources API)

- A piece from the team: "This morning our technology demo was shown as part of the Microsoft //build keynote. The keynote introduced the DirectX “tiled resources” API as one of the key technologies that enables developers to make games with unprecedented amounts of detail. At Graphine we’ve obviously believed in this vision for a long time and we´re very excited to be part of this reveal and of course the availability of hardware acceleration through DirectX 11.2. Later this afternoon we´ll also be giving a talk together with Microsoft´s Matt Sandy that will expose more details about the tiled resources API and our use of it. This API basically exposes the underlying hardware page table to application developers. Our product, the Granite SDK, then builds on top of this API to offer a full “virtual texturing “ operating system by adding streaming (swapping), compression, residency management and tools."

Business Model

  • 2 types of technology licenses

- Per project basis (per game per target platform)
- Site license for multiple projects

  • Yearly support & maintenance service contract

- Technology sold as-is - No on-demand customization
- Most requested features already on product roadmap
- Features are prioritized based on requests

Proposed Business Strategy

Business Strategy

  • (Enhance): Addition of a complementary function

- Unit testing framework for developers
- Customer validation: looking at what they need and/or will want – which is to make their product efficient in all viable areas and making the “ready to market” process easier. As with things such as games, many rounds of testing is involved and there can be value-adding by Graphine by making the process faster/more efficient through provision of even more comprehensive support

  • (Expand): Focus on mobile gaming, and going to new market - Singapore or Indonesia

- Mobile/Tablet games: 64% of mobile users play games daily, and it is the top-used category of applications. People spend an average of 7.8 hours playing mobile games (source: http://econsultancy.com/be/blog/9638-the-rise-of-the-billion-dollar-mobile-gaming-market-infographic)
- Games are projected to account for 32% of consumer spending on apps by 2017 (Reference: Press Release - Consumer Spend on Apps to Reach $75 Billion by 2017, as In-App Purchases Prevail, Added: 09/17/2013 from JUNIPER RESEARCH Published: 08/14/2013)
- Enter a new geographical market: Nature of product – easily translatable, widely appropriate/suitable, little need for localization with regard to Singapore and Indonesia. Going into more markets will also help them achieve more visibility

Asia Expansion

  • Singapore

- Government support: Aims to build a vibrant games hub (source). Active industry promotion and great game development community (making of Singapore into a hub for publishing, distribution..etc). Helps organize link-ups with venture capitalists and angels, sponsor conferences and provide local companies with exposure to various markets.
- Networking opportunities: Casual Connect Asia (Held in May every year), fronted by the Infocomm Development Authority of Singapore (IDA)
- Links to renowned game studios (regional, international)
- Established hub: presence of well-known companies such as Blizzard, Ubisoft, and even regional companies like asiasoft)
- Blizzard: Set up office and Battle.net servers in Singapore to provide tech support and reduce server latency for players for popular games like WOW and Starcraft II, also acquired a new distributor – a Singapore game publisher & distributor - Infocomm Asia Holdings (IAH) – customer support unit for other IAH games like Fifa Online & Granado Espada
- Ubisoft: Singapore has a growing center with significant roles in some of their big titles: Assassin’s Creed 2, Brotherhood, Prince of Persia: The Forgotten Sands

  • Indonesia

- Rising gaming industry: Kurniadih Sutanto, Logitech’s regional manager of Indonesia, stated the Indonesian PC game market grew 25 percent from 2010 to 2012
- Huge local market: More game studios popping up and giving good competition in the market (sources: http://www.techinasia.com/11-startups-watch-indonesias-gaming-industry/, http://netmarble.co.id/, http://prodigy.co.id/company/timeline/)
- Recognized as an upcoming market
- Start of international collaborations: Square Enix – first big collaboration with one of the most well-established names In the world


Proposed Market Strategy

Singapore
  • Opportunity/Trends

- Culture & Community
- International exposure (gaming & development community)

  • Strategic Targets

- Tablet & Mobile Gaming Start-ups
- SMEs
- Regional offices in Singapore
- Examples of the above: Magma Studios, Nexgen Studio, Non-stop games, Garena Singapore

  • Roll-out Plans

- Pitch collaboration opportunities
- Visibility & networking

Indonesia
  • Opportunity/Trends

- Rising gaming community
- Local market, adaptations

  • Strategic Targets

- Web browser games , Mobile gaming
- SMEs
- Examples of the above: Prodigy Infinitech, Sengokuixa - Web browser (August 2013 launch) mmorpg collaboration between Square Enix & Agate Studio for the indonesian market (source)

  • Roll-out Plans

- Pitch collaboration opportunities(local)
- Visibility & networking

SWOT Analysis

Strengths

  • High growth market - games

- Many platforms and consoles (E.g. PS3, PS4, XBOX, Wii)

  • Convenient integration

- Granite SDK is flexile and allows one to easily integrate it into a project even late in the production process
- Resolves a major concern for prospective partner studios

  • Backward compatibility

Weaknesses

  • Limited in focus and outreach (in targeting of just web browser/pc based games)

- More opportunities to be explored such as partnering with potential clients that can lead to more collaborations and projects (e.g. they have a long suite of games under a continuing series - Final Fantasy, Assassins Creed, Kingdom Hearts)
- Going into where there is a more chronic need for space/memory optimization (Mobile) will lead to having a better positioning and of course, stronger persuasion power

  • Lack of long-term partnerships

- Partnerships with studios for their whole range of games ensures a continued stake by the partner
- Also helps build the credibility and portfolio of Graphine

Opportunities

  • (Expand): Mobile gaming

- Able to position themselves as a necessity as consumers expect and demand more in terms of performance (of the products)
- Clients who wish to remain competitive will see that they are a possible solution to limitations concerning software
- Possible to branch into video streaming as well

  • (Enhance): Add-on developer tool

- Unit testing (Quality & Assurance)
- Exclusive packages (just for long-term partners or those with multiple projects)
- Enhance yearly maintenance and service contracts (not just having the option of a 1 year 24 hr customer support) – add variations in cost, features, duration and type of support in terms of comprehensiveness
- Focus on service portion (customer support and feedback)
- Trial offers to get people onboard (reference Adobe Gaming SDK has a trial version, most do in fact)

Threats

  • Cheaper or free alternatives

- Though of lower quality, less cost intensive or even free-to-use SDKs available could pose a threat (e.g. Adobe Gaming SDK - which is a free ad-on/component of their suite, Corona SDK - specially suited for mobile development)
- Alternative optimization methods in the market (e.g. efficiency management through data processing)

Additional Information

  • Why not China?

Although it is a very big and lucrative market, things may not be as smooth for a company looking to go in due to a “Game console ban”. While people still sell game consoles, no outright marketing is allowed, which thus hinders outreach to some extent. In addition, there will be competition from many local developers that solely target the local market and have a much better understanding of the ecosystem which further leads to there being an unlikely incentive for collaboration with others. Other consideration also include the nature of the industry, where games have a short lifecycle and keep rotating, thus the potential staying power of a foreign company is significantly reduced due to over-saturation of the market - the sheer volume of “the next big hit” hopefuls.

Learnings and Key Takeaways

For the case of Graphine, the issue of the competitive landscape it is in is an interesting and complex one. First and foremost, besides there being many competitors in the "traditional" sphere as identified in the above sections, making headway into the mobile arena also opens the company up to more competitors (some of which have chosen at its inception to focus on mobile specifically). Thus moving forward, there is a clear need to monitor and straddle the development of both SDKs - which could need different development plans and cannot instead be a replica of one another. Also with competitors choosing the route of "specialization" they could be better equipped in terms of manpower and resources to respond to demands for upgrades and additional functionalities. Prioritization is a clear need.

  • Validation of your positioning in the market and landscape needs good ground knowledge about your current and potential competitors
  • Translatable uses of your core technology / Different applications of your core technology should be explored, and possibly be included in your development and or expansion roadmap
  • Investment needed is a significant consideration (especially when talking about countries further away)

References

- http://www.gamasutra.com/view/feature/2285/exploring_game_development_in_.php

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