MUMBAI: Ronnie Screwvala-promoted UTV Software Communications has found that the gaming business can be wrought with delay in projects. But the turnaround could come this fiscal as the company prepares to release its products in the year.
UTV is eyeing Rs 500 million and ebitda margins of 10-15 per cent from its mobile games division, carried out through UTV Indiagames.
UTV Indiagames has the exclusive right for the franchise for IPL Mobile games. It also claims to be the only online subscription games platform with games on demand (GoD) and has tie ups for game channels on DTH in India.
The company has set up a cost efficient studio in Vashi, Mumbai, to create games and it believes that it is poised to capture opportunities for 3G and 4G in India.
On the online games front, UTV claims to have four games on the floor. UTV expects to post a revenue of Rs 400 million and have operating margins of 15 per cent, the first year of revenue from its online games division.
Online Games has a creative studio in Austin, Texas, and a backend outsourcing in Beijing, China.
The first game to release in July/August will be Mytheon. The MMOG multiplayer platform in the US has been built and is owned by UTV to earn revenues through micro transactions on online games in the US. Furthermore, the company‘s model is to pre-sell/ sell Games to the rest of the world through upfront license fees on minimum guarantees. For Mytheon, the process of presale has already begun.
As far as console games is concerned, UTV expects to get a revenue of Rs 3 billion, largely driven by release of their own developed game El Sheddai. This includes around Rs 1 billion from the existing publishing business.
No pre-sale revenue of the IPs to publishers or others has been considered as of now, UTV said. On this revenue base, the company is envisaging a 20 per cent Ebitda margin.
Next year, the company will have its own IPs ready for release along with the 3 Big IPs - El Shaddai, Reich and War Devil. The company has created these on multi platforms - PS3 and Xbox 360 and later can go on more platforms including PC.
The vertical also has two smaller IPs - Hells Cook and Dragons Crown.
UTV said that over the next six months it will be actively negotiating a combination of (a) publishing deals for one or more game in one or more territories globally for a license fee / minimum guarantee (b) co-production deals for pre-release of a game. (c) Investment into one of its three studios based in London/ Florida/ Tokyo along with the IP of that studio.
The Company is also in discussions with Sony (PS3) and Microsoft (XBOX) for publishing and/or distribution rights for its IPs.
UTV said the final dates of release would be locked, based on the final outcome of the publishing/ co production deals. "We envisage at least one of three major IPs releasing in this calendar year - even though we may have pre-sold the others. We predict our publishing business to meet targets based on the titles blocked for release during 2010-11," it said.
From the New Media segment, the company is expecting to generate a revenue of Rs 300 million with marginal profit in FY ‘11. The New Media business of the company includes mobile and web business.
"Overall and on an annualised basis for games content and new media businesses, we see a revenue base of around Rs 4 billion," the company said.
Media analysts are treating UTV‘s guidance with a lot of caution as no pre-sale revenues have been announced yet.
