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

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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

Technology

Business Model

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 Studio, 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 oversaturation of the market - the sheer volume of “the next big hit” hopefuls.

References

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

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