Outsourcing: Arijit Bhattacharyya, CEO of VirtualInfoCom.com (Part 4)

Sramana Mitra: This was a game that you designed?

Arijit Bhattacharyya: Right.

SM: And you sold it in the Kolkata market?

AB: Kolkata and outside Kolkata.

SM: What was the price point of the game? How much did you sell it for?

AB: We sold a CD for 99 rupees (~$1.78), and we got 20% of it. The reseller got 80% of each sale.

SM: Got it. How much revenue did you make from that 20% royalty you negotiated?

AB: I think within two years we earned about three and a half lakhs (~$6,000).

SM: Altogether, you made a little more than six lakhs (~$10,000) from that game.

AB: Right. Along with that we started mailing different large companies that sell games through telephone operators like Vodaphone, but in those days, there was no Vodaphone. We created games for them, Java-based games, small casual games, and sold them through the operators. That’s how we scaled that segment of the organization. We scaled up from a small animation farm and institute with one game. After that, we started making money from the games. Then we moved into corporate animated video. I did the marketing because I had the money to do it.

SM: When you started selling games to mobile providers through the carriers, tell me more about that business model. Were you coming up with the game concepts?

AB: Yes. We created the concepts. We created an entire game from zero to 100 and sold it to them. It wasn’t selling, actually. We had to give them the games, and they would sell the games through the operators, and we would get part of the payment.

SM: How many games did you develop in this mode?

AB: More than 150. Some of them are first-person shooter (FPS) games; some of them are casual games; some of them are simple, small strategy games that we used to have in our mobiles, such as Samsung, Nokia, and some Java-based and Chinese mobiles.

SM: How much did you get paid for downloads?

AB: It depended on the sharing business. In those days, we got 30%, although we were the developers. The third party got 70%. That was the rule because in those days, there was no app store. We had to accept that. But we had a good name in the market, and with that name, we got a couple of outsourcing projects from abroad. We got a couple of projects from the U.S., in New York City. We got a couple of companies that asked us to develop games and animated videos for them.

I thought, if I’m getting queries from those areas, and I’m doing a good business, why don’t I start finding resellers? I put up a small ad that we’re looking for resellers for this kind of service. We’ll create mobile apps, mobile games, animated videos, and so on. We got a good response. We got nearly seven resellers within a year, and they took orders for us. To date, we still do things that way. We have resellers in the U.S., the U.K., African countries, and Japan.

SM: How many resellers do you have?

AB: Today, we have nearly 175 resellers.

SM: And what kind of volume of projects do they produce, and what percentage do you pay them?

AB: It depends on the reseller and the number of projects he brings. It starts at 10% and goes up to 35%. It varies from project to project.

SM: Is that your primary source of revenue today?

AB: The resellers provide 60% of my revenue. The remaining 40% is generated through online marketing, app stores, and all. Regarding the training, we have collaborations with these kinds of resellers, and we get probably 25% from the resellers in the training segment altogether. Now, we open a small segment in a country or city outside of India and ask the reseller to get business for us, and we’ll provide full marketing support along with a good portfolio. The reseller just needs to give us the projects. And in the case of students, they just need to send us the student profiles and we’ll take it from there. We currently train people in Japan online. In London, we have this kind of business. In Nigeria, we have a similar kind of business. That’s how we’re growing.

In 2004, we started hiring resellers and continued doing that until 2006. We had about 29 resellers within two years. They gave us orders, and whoever was getting training at the institute, I would recruit into the production pipeline. So, we have a chain of seniors, juniors, and freshers. We have a proper recruiting and training system. We take money to train people and then recruit them to our organization. After that, we give them wages.

This segment is part 4 in the series : Outsourcing: Arijit Bhattacharyya, CEO of VirtualInfoCom.com
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