MDeC hopes for Estonia impact with GameFounders Asia

By Karamjit Singh June 17, 2015

Gaming accelerator in Estonia from 2012-2014 proved to be catalyst
Special programme benefiting local game players to run concurrently

IT was a European-based gaming accelerator when it started first in Estonia in 2012. Today, GameFounders describes itself as a global gaming accelerator, and thanks to a three-year partnership with Multimedia Development Corporation (MDeC), has made Malaysia its hub for Asia.

DNA has learnt that the partnership will cost national ICT custodian MDeC – and thus the Malaysian taxpayer – an estimated US$1 million (RM3.75 million).

MDeC, when asked to confirm this, said, “We cannot confirm or deny the amount cited (it is part of the agreement to not disclose it). What we can emphasise though, is that this collaboration between MDeC and GameFounders will greatly benefit the ecosystem.”

It does seem that GameFounders has indeed sparked the ecosystem in Estonia during the two years it ran its three-month accelerator there, over four cycles.

MDeC hopes for Estonia impact with GameFounders Asia Ten companies are taken in for each batch, with GameFounders acting as a pre-seed investor, putting in from €10,000 to €15,000 (about US$11,000 to US$17,000) per company in return for a 9% stake.

GameFounders partner Andrew Walker (pic) describes this as a “sweet spot” as it lies between the 6% and 12% that accelerators typically take for their investments.

In Estonia, GameFounders ended up investing in 28 companies from 16 countries.

It typically also prefers to take games companies that have already shipped products to the market, and those that are not making any money. It is also keen on people who have been working together to create games part-time or as hobbies, but now want to take the plunge and set up a company.

The reason is simple: The GameFounders accelerator is all about teaching games companies about the business side of the industry.

“This is where game developers need the most help,” says Walker. “We assume they know how to build games technologically and have the creative and artistic talent.”

GameFounders says it “immerses” the games companies in an intense bootcamp-like mentality over the three months, with the sole purpose of helping them explore all aspects of the particular platform they are targeting, whether desktop, mobile or console.

“The idea is for them to come out energised,” says Walker.

MDeC hopes for Estonia impact with GameFounders Asia It should be pointed out that the accelerator, while based in Estonia, was not specifically for Estonian companies, even though the partner there was Enterprise Estonia. Over the course of the two-year programme, entries came from 67 countries.

According to Kadri Ugand (pic), the Estonian cofounder of GameFounders, “We flew in between 80 and 100 mentors and industry experts from around the world to Estonia each year over the two-year programme.

“Knowledge and experience was shared not just with the companies in the accelerator, but also with Estonian companies that were not in the programme,” she says.

GameFounders also engaged with universities and kids aged 11 to 19 who were taught to develop games from technical and creative aspects, in a programme called Play Test Days.

The end result is that from fewer than 10 games companies, there are now over 40, says Ugand.

Similar ecosystem impact in Malaysia

It is this impact on the ecosystem that has attracted MDeC. With the games sector in the country really below the radar, with no clear success story and with talent lured down south to work with the Singapore units of global games companies, the path to scale and market traction for Malaysian gaming companies is both steep and slippery.

Based on the PriceWaterHouseCoopers Global Entertainment and Media Outlook 2013-2017, Malaysia’s games market was estimated to be worth RM727 million in 2013 and is expected to grow 20% to RM868.70 million by 2017. [RM1 = US$0.28]

It is accepted that most of this value is not being captured by local companies. The game-plan, no pun intended, is that they can eventually do so, as well as scale overseas.

This is where GameFounders Asia comes in. It is currently accepting entries for its pioneer batch that will begin in September. Entries close on June 20.

In total, four accelerator programmes will be held over the two years in Malaysia, with each being three months’ long. Teams must be a minimum of two, with Walker saying that three to four is ideal.

While it is accepted that GameFounders will pick only 10 gaming companies per batch, and with entries already coming in from all over the world, the chances are slim for any Malaysian company to be accepted.

To ensure that the Malaysian ecosystem gets maximum value from each accelerator batch, MDeC has worked out a deal where 10 Malaysian companies will have a concurrent programme alongside the GameFounder accelerator, called MSC Lite, run by Ugand and her team.

What’s also interesting about the programme in Malaysia is that GameFounders will be building a Kuala Lumpur-based team that Ugand and Walker will train up to handle the four intakes over two years, and to act as their Asian resource team.

MDeC hopes for Estonia impact with GameFounders Asia The duo will be moving to Kuala Lumpur in August, when the first accelerator batch starts. However, they will be travelling as well as they are raising a fresh fund in Europe and if that is successful, will be splitting time between Malaysia and whichever country they launch their next European-based accelerator from.

As to the all-important question of what metrics MDeC will be looking at in deciding if the programme has been worth it, its Creative Multimedia director Hasnul Hadi Samsudin (pic) highlights the following:

Increase in number of games startups in Malaysia – increased game-related activities, leading to an accelerated CAGR (compound annual growth rate) of 15% to 20% growth in revenue, instead of BAU (business as usual) growth of 6%.