Amaze Entertainment, an independent video-game software developer based in Kirkland, Wash., counts many best-sellers among its game titles, including hits based on the Harry Potter and The Lord of the Rings. Last year, CEO and chairman Dan Elenbaas and his team decided it was time for the 6-year-old outfit to expand into the lucrative Asian markets, starting with Japan. He spoke recently with Smart Answers columnist Karen E. Klein about the strategy that inspired the move and the dividends it is reaping. Edited excerpts of their conversation follow:
Q: Amaze has about 220 employees and has been profitable each of the past five years. Why take the risk of going overseas, especially now?
A:Typically, Amaze makes games for large game publishers like Electronic Arts, Activision, and Microsoft. The goals for going after Asian clients are to increase our sales and expand our pool of publishing partners. We expect our Asian business to eventually make up at least 33% of our total revenue.
Q: How's it going so far?
A:Very well. We've already contracted to make two games, added an incremental 15% in revenue, and secured a major publishing partner. We also have excellent prospects for continued success.
Q: What strategies are you using in taking your company's business overseas?
A:First, we waited until we could demonstrate a high level of success here at home. If we hadn't shipped several titles on time and within budget, including several best-sellers, we wouldn't be ready to leverage into international markets.
Second, we're focusing on one market at a time. We've created goals specifically for Japan and launched a plan designed for achieving success there. Once we establish a strong presence in Japan, we'll begin looking for the next international market to target.
Third, we've hired people who understand both cultures, because we know that in order to operate effectively internationally, we need people who can bridge culture gaps and create a foundation for mutual trust.
Q: Getting the right people on board is obviously key. How do you build a team that is internationally savvy?
A:Well, Amaze was quite fortunate to be able to hire Scott Tsumura, the former president of Nintendo Software USA. He's a native of Japan, a 20+ year game industry veteran and he's worked extensively on both sides of the Pacific and has a stellar reputation in both places. Once we had him on board, we asked him to build a team of bilingual and cross-culturally experienced game developers.
Q: How exactly does a company approach international clients and potential partners?
A:We felt that organizational structure would be really important, so instead of simply creating an international division or group under our corporate banner, we created a new studio named and branded specifically for this market. We call it BlackShip Studios and it has its own mission, identity and subculture - even though it is still an integral part of Amaze Entertainment.
Q: What can you offer Japanese clients that they don't already have in their own business culture?
A:We have to offer them incremental revenue opportunities. We know that the Japanese want to expand their markets and we also know that the gaming software market in Japan is not growing as fast as it once did. So, we went in and pitched a way for potential clients to leverage their existing brands into new markets in North America and Europe by using our developers.
We also offered them a service unavailable in their domestic markets, which is the expertise we have to design and develop great games specifically designed for North American and European consumers. So far, it seems to be paying off for us nicely.