Deal Radar 2010: Brandissimo!, Encino, California

“Kids can smell a rat from a mile away,” says Andy Babb, president of Brandissimo! Inc., a company that tries to keep Babb’s observation in mind and focus on creating good stories and characters for the online games, Web sites, and other content it develops to help companies and brands better engage with children. It is perhaps best known for NFLRush Zone, the online platform and fantasy world that the National Football League (NFL) uses to connect with kids.

The Encino, California-based company was founded in 2002 by David Snyder and the late Bill Gross. For over 10 years, Snyder was the head creative content executive for Walt Disney Television International and a key creative force in the development, production, and programming of hundreds of hours of animation and live-action programming and documentaries for The Walt Disney Company. Snyder also led the launch of numerous Disney Channels internationally and Disney-branded programming blocks on major terrestrial broadcasters. After Disney he joined Gullane Entertainment, where he executive produced three seasons of “Thomas the Tank Engine and Friends,” among other shows. His programs have won numerous international awards. Understanding that kids’ demand for content was expanding online, Snyder began positioning Brandissimo! into video games and virtual worlds in 2005.

Gross was the one who led the initial assault into online games. The company says that at the time, the online video game market was the Wild West. The massively multiplayer online role-playing game (MMORPG) Club Penguin had just been purchased by The Walt Disney Company for $600 million, and everyone was jumping into the water. Brandissimo! believed that much of the content, however, was missing the basic fundamentals of children’s entertainment: story and characters.

Brandissimo! considers these two elements its core competencies and the way through which it connects with kids. For example, the NFLRush Zone is not just a sports game but also an NFL-themed fantasy world where kids ages 8-13 can create avatars, explore 32 team lands, and play over 80 Flash games. The inhabitants, “Rushers,” worship football and love their pets, “Gameballs.” They are constantly in conflict with robotic beings called Blitz Bots who try to steal the Gameballs. As a player, you defend the Gameballs by fighting off the Blitz Bots.

NFLRush Zone is Brandissimo!’s most important game and gets more than 600,000 unique visitors and 2 million game plays per month. Gross, whom Brandissimo! described as the “heart and soul” of the company, passed away just six weeks before the game’s launch. The team was devastated by the loss of their friend and colleague but was determined to press on. Brandissimo! said that the NFL was incredibly supportive but also had legitimate doubts about the company’s ability to launch the game. The NFL hired another team to review the work done to date and, said Babb, “that team just killed us” in the assessment report, saying that NFLRush Zone would “never launch.” But the NFL stuck with Brandissimo!, and letting Gross down was not an option for the team. The game launched one week after the assessment report.

Other products include the Flash-based games Wedgie Toss 2, which has had over 17 million game plays in the past 21 months, and Scrambled Legs. The executive of Creative, Josh Fisher, built the online comic book world Urbaniacs, and Brandissimo! developed the Web site for the classic Cabbage Patch Kids line of dolls. Brandissimo! also produces animated television series, including “Meteor and the Mighty Monster Trucks” and “Harry and His Bucket of Dinosaurs.”

Brandissimo! likes the online games model for its multiple components. For NFLRush Zone, the company follows a freemium approach wherein basic game play is free but premium users pay $4.95 for access to content such as new games, “cooler” gear for their avatars and other bonuses. Through integrated sponsorships, client brands get access to players in a way that complements game play. For example, players can enter codes found on Upper Deck brand sports cards and get game benefits such as pigskins (the site currency). Brandissimo! admits that the advertising market is tough right now, but ads in game pre-rolls and banners do still bring in incremental dollars. The company also earns revenue through licensing and merchandising in various segments. Brandissimo! is developing a micro-transaction model for anyone who doesn’t want to pay for a premium membership; these users will be able to get premium benefits on a piecemeal basis.

Brandissimo! considers its TAM to be the global casual games market, which according to the Casual Games Association had 2009 revenues of more than $3 billion across platforms (Internet, mobiles, Xbox, iPhones, social networks, PC and Mac, and LIVE Arcade). The company’s top target segments are hardcore role-playing games such as World of Warcraft, and casual and social online games.

Brandissimo! believes that on a day-to-day level, its main competitors are online gaming companies such as Club Penguin, Nickelodeon’s (via Viacom) Neopets, and Electronic Arts’s Playfish, as well as the many casual games platforms found on the Internet. On a more strategic level, since the company’s goal is to build children’s entertainment properties across platforms, companies in this segment are really the competition. These include names such as Disney; Nickelodeon; 4Kids Entertainment, one of the largest producers and distributors of children’s television; and games developer Fluid Entertainment, which handles brands such as Harry Potter and Disney Princess.

Brandissimo! is entirely self-funded and was profitable early on. At present, it is working on a model whereby it gets investors for specific projects. The current project is an original IP kids’ virtual world that is in alpha. Brandissimo! needs to raise approximately $750,000 to fund the rest of development and the first few months of marketing and operations and is thus pitching to angels and individual investors.

Brandissimo! is growing and had $3.1 million in revenues in 2009 with a 16% profit margin. The company aims to double its revenues and increase its profit margin to 35% in 2010.

It plans to achieve this growth through a two-pronged approach. The first part is growing the client business by working with brands to reach and engage with their audiences online. For example, Brandissimo! is in the middle of a complete renovation of Cabbage Patch Kids’ online operations and is also building virtual worlds for two start-ups.

The second part of the growth strategy is to further develop the company’s own original IP. For this there is Urbaniacs and the aforementioned alpha property for which the company is seeking investors.

Brandissimo!’s team said that they love being in the kids’ entertainment business and being their own bosses, but their ultimate exit strategy is acquisition. To that end, the company is putting together a body of kids’ entertainment expertise and a library of IP that it intends to make attractive to large media companies (on the scale of Warner Bros.) and large video game companies (on the scale of Electronic Arts).

Related Readings
Hollywood’s Content Crisis: Robert McKee, for more on the importance of story and character in films for both children and adults
Deal Radar 2008: GirlSense
Deal Radar 2008: Playfish
Web 3.0 & Walt Disney

This segment is a part in the series : Deal Radar 2010