Making Serious Money From Casual Games: King.com CEO Riccardo Zacconi (Part 4)

SM: Who were your primary partners in the early days of King?

RZ: We partnered with Lycos, T-Online, and major portals.

SM: And your partnerships involved having them send traffic to you?

RZ: Yes. Portals and media partners, such as TV stations, would send traffic to us.

SM: Can you tell me more about your partnerships with TV stations?

RZ: That was actually our fourth step. We started doing classic TV spots. We bought a wider pack which included TV spots as well as online media. The TV spot was promoting the brand of the TV partners’ game channel. We were integrated on that. We got better rates for the TV spots.

SM: Did you have to pay for the partnerships, or were they revenue share partnerships?

RZ: We were paying.

SM: Where was the funding coming from? That must have been very expensive.

RZ: The funding was from us.  A partner and I put in money in the beginning of 2003. We launched the site in August 2003.

SM: How much money did you put in?

RZ: I think it was around $500,000. We also did not pay ourselves a salary for over a year. We then raised some money from two business angels in January 2004, one of whom was the founder and CEO of uDate. We became profitable in January 2005.

SM: You were already profitable in 2005?

RZ: Yes, and we have remained profitable since then.

SM: It sounds as though the traffic acquisition partnerships were very expensive at the early stages of the business.

RZ: It is not as bad as it sounds. We always tried to refinance the cost of the partners with the previous partners. At the beginning, we had revenue shares, and then we gave guarantees after we knew we could pay with the money we already had.

SM: So in the beginning you did revenue share deals?

RZ: Yes. The first phase relied only on revenue shares.

SM: That makes sense, because your second stage is a much more expensive traffic acquisition.

RZ: That is why I was focused on business models that I knew. You can only do this with a model that is new and has a reason to exist. You cannot be busy competing for other revenue sources with a partner. We were basically adding a new revenue source to the partner.

SM: You were basically powering a new game channel for the partner.

RZ: Exactly. They were paying for having content for the game channel, and we were giving them this content free, and on top of that they were able to monetize the channel.

SM: Did you develop the games that you launched with?

RZ: Exactly.

This segment is part 4 in the series : Making Serious Money From Casual Games: King.com CEO Riccardo Zacconi
1 2 3 4 5 6 7