Mike Yuen on Zeebo's Launch, Potential for Indies

The game industry has seen 11,500 layoffs across 95 companies since 2008, 71 percent of which came from the U.S. How is a deficit like that overcome? Facebook and MMOs are broadening the market, but Zeebo has its own angle – families, and the lower and middle class. The Zeebo is a home console based on a mobile phone chipset and 3G network. It’s a download-only console that is currently billed as a game and internet console, even shipping with a keyboard. "Most of China has now moved into the middle class. 20 or 30 years ago that wasn’t true," said Zeebo's Mike Yuen at DICE last week. "It’s not all about games. It can’t be, because it’s usually a single television household. We believe in convergence, because these families won’t be able to diverge into multiple devices." Zeebo targets Brazil, China, and India primarily, and in these regions the parents want kids to learn, more than play games, so that winds up being something they want out of a computing device much more than game playing capability. "We feel you have to address play, learning, and connectivity," says Yuen. "Our philosophy is to make a better life for the child of the family." Zeebo’s new model is thus 'play/learn/connect.' Zeebo had a Rio de Janeiro trial soft launch – then went national in Brazil and Mexico – Yuen showed a chart demonstrating a rise in sold consoles since its proper launch two months ago, but devoid of actual numbers, it was difficult to get a picture of the system’s success. As a small indicator, Zeebo's official blog reported "thousands" of console sales in Mexico during that country's Epiphany Day holiday period. “It’s too soon to see how well we’ll actually do, but it seems the play/learn/connect is actually working,” he said. “You pay a little less [for internet access] than at an internet cafe.” Zeebo's downloaded games and applications have a longer tail, as on other download platforms, Yuen said. “What we found over time is that we’re finding that long tail effect happening. To some extent it’s a little more like the iPhone App Store.” Yuen said some important questions need to be asked before entering this market as a game maker. First, can you make a 10-25MB game for $50-500k? That’s the general size of a Zeebo download, any larger and it becomes too expensive. The Zeebo currently sports content from games like EA and Capcom, including a mobile port of Resident Evil 4. Next, will you sell a game for $5-10 to overcome piracy? Piracy is high in the regions the company is targeting, but people will pay to get original content at the right price. Yuen cited the fact that in India companies started selling legitimate DVDs for $2-3, and consumers wound up buying those instead of pirated content. Finally, can you be happy making singles and not home runs? “We’re not against chasing the Triple-A, for us it’s more about can we hit lots of singles and generate lots of hits,” Yuen admitted. Yuen showed a sales chart indicating that indies, first party unbranded, and branded games are all selling at about the same rate, though branded content is doing slightly better. In this environment, he says, indies and small brands can thrive.