It was almost one year ago when Japanese social game developer Gumi established a presence in Singapore. That subsidiary, called Gumi Asia, was set up last April, with David Ng appointed as the CEO. Ng has previously worked with low-end router vendor Linksys and gaming giant Electronic Arts . During a recent visit to Singapore, I had an opportunity to speak with Ng, who explained more about what the company has in store in the future, as well as some advice to businesses aspiring to expand in the Asia regions.
Q: Can you tell us a little about your Singapore team?
David: We have 75 people at our Singapore office alone. Every team in the office has 20 to 25 people, [each] with a single mission for developing a specific game title. That’s how our operations in Singapore can currently develop three game titles at the same time.
In addition to Singapore, we have development teams in Taipei and Jakarta, and I’m administrating all 110 people working at the three different locations. I speak with each of the offices via teleconference once a week at least, and I actually visit the locations once a month at least.
Q: Gumi is currently focusing on the Asian market. Why not North America nor Europe?
David: We’re in the emerging market where the population of our potential users are rapidly increasing. In other parts of the world, to be honest, few people know about us. Our brand is becoming well-known in Asia, and that’s why we’re running our business right here now. I heard that some gaming titles cost six dollars to acquire a user, and that’s the number we definitely can’t accept. This is another reason why we’re focusing on Asia.
Q. Your business is not only about sales but also developing products all over Asia. What is the benefit of this development strategy?
David: Game developers are doing business differently than typical tech startups. Startups are pursuing the development of market-disrupting products or services to acquire users. But we as game developers need keep introducing new titles to attract people. Through this kind of sustained efforts, we’ll have a smash hit product some day in the future.
In order to develop as many titles as possible with a limited amount of the funds, we reduce the development cost for every development task. In Taiwan, a talent can be hired for almost a half the salary as in Singapore. In Indonesia, we can hire a designer with very high skills for only $500 a month. By mixing up skills from our employees at different locations, we can develop more high-quality game titles than our competitors. With the cost of developing a game at a typical Japanese game development company, we can develop three titles.
Q. At the end of last year, Konami also set up in Singapore. Is the regional market attracting many more gaming companies?
David: When they set up an office in Singapore, their president came to my office, and I enjoyed chatting with him. Gumi is still a very small and young company, but many executives from companies new to Singapore contact me for advice. The Singaporean government is offering great support for innovative businesses. For example, the PIC (Productivity and Innovation Credit) offers 400% tax deductions and 60% cash payout for the deployment of working facilities. It’s easier to ask someone for translation to Mandarin or English here. Also our country is well known for having the world’s lowest income tax system, which is 17% at most. We also got financial support from the government for covering the cost of setting up our local office. For Japanese startups aspiring to expand in the Asia region, I believe Singapore is the smart choice.
However, Japanese companies should not expect results in the short-term. No results can be made in the first three to six months. It may require at least three to five years to achieve something. Furthermore, they shouldn’t deploy a Japanese management style to local employees. This might cause negative results no matter where the region.
Q. You achieved a lot in your past business life, at Linksys and EA, and I expect you’re doing ok financially. Why did you choose to join startup where the future is less certain?
I did a joint venture with Linksys CEO in 1998 after the Thailand economic crisis and built Linksys business in Asia. Linksys was sold to Cisco for $500 million in 2003, hence I was successful as an entrepreneur from early days. (This paragraph contained a mistake of fact. It’s been corrected.)
But when I met with Mr. Kunimitsu (Gumi Group’s CEO) and listened to his dreams and ideas, and where he’s heading, I wanted to get involved and work with him. This is not about making money. Unlike my previous business experiences, Gumi is a startup requiring us to create everything from scratch. I thought this must be very challenging and interesting.
Q. What projects are you currently working on?
David: In the smartphone game industry, there will be a shift to native apps from web-based apps this year. For us, developing native apps based on our Japan-made apps is also one of our missions at the Singapore office. For upcoming gaming titles for smartphones, we’ll be developing all of them as native apps. Puzzle Trooper is a notable one, released on April 16th (available on Google Play, trailer below). We will also introduce another slot app by the end of this year which was mainly designed at our Indonesian office. So please stay tuned for that and more upcoming products.
As I talked with David Ng, I felt that he was not just the president of a Japanese subsidiary, but also that he has the perspective of an investor rather than that of an entrepreneur. And he’s ambitious enough to share a dream with the startup’s founder, and expects to make Gumi a top global company.
Linksys was subsequently acquired by Cisco Systems and Belkin. ↩