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G5 Entertainment: Nordic Investor Q&A with CEO

CEO Vlad Suglobov was kind enough to answer a couple of questions we put to him. Here is the complete Q&A session:

Nordic Investor: Are you still sticking to the target to release 80 games in total during 2011 and if so, how many of those will be for the Android platform ( a rough %-number would be great)?

Vlad Suglobov: We have changed the way we talk about our release plans recently. Our goal is releasing one iOS app and one Android app every week. And there will be some Mac releases as well. I’m quite sure we will end up releasing more than 80 games in 2011, in total. The exact mix is difficult to say at this very moment.

Nordic Investor: Are you satisfied with the conversion rate on the Android platform? When trying to model your numbers, I am currently using a conversion rate of 10%. Is this too far off from reality?

Vlad Suglobov: We don’t want to announce our conversion rates, we never do. But Android rates are definitely lower than iOS rates, like for other developers who spoke on the matter publicly. We get a lot of downloads on Android though. I was not very optimistic about Android, as I’m a conservative person by nature, and I think the audience is different. But the platform ended up exceeding my (conservative) expectations both in terms of downloads and revenue. I’m happy with what I see. We know our way to Top100 Grossing Games now.

Nordic Investor: M&A activity within the mobile gaming sector has been picking up steadily in the US, with bigger names like EA but also Glu Mobile expanding their development teams. Do you see a risk that these big companies will become too dominating and might start a price war?

Vlad Suglobov: EA, Glu, Gameloft – they have been on iOS/Mobile ever since G5 started releasing games on iOS, even earlier. They are aggressive and grow as fast as they can. We do the same, even though they’re there all this time. I don’t think anything changed recently. I think the market is large enough and — most importantly — it’s growing, and is going to grow like crazy for quite some more time. So there’s enough space for everyone. Price war – do you mean on game prices? Everybody’s at the bottom already, how can you do a price war when everyone is selling their games at 99c from time to time, and the lowest virtual good transaction is always priced 99c?

Nordic Investor: How do you see in general on the price development on the different platforms. I understand that your price/mix has been developing favourably over the last years but I guess this is mostly related to mix (i.e. more iPad and Mac sales vs in the past)?

Vlad Suglobov: It’s not only because of the mix, but because we were gradually (a) going away from longer 99c sales periods to shorter 99c sales periods (b) pricing our games higher on the launch – from 1.99 and 0.99 back in 2009 to 2.99 later and now to 4.99 for iPhone game. On iPad, we moved from 4.99 and below to 6.99 as a standard start price, and some games like Virtual City sold many copies at 9.99.

Nordic Investor: Finally, will there be any roadshow events during this fall similar to last year?

Vlad Suglobov: We are thinking about our options in this regard. As soon as something is decided, we’ll send out an announcement.

I am long G5 Entertainment and you should be too!

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One Comment

  1. Johan Stjernbecker September 9, 2011 Reply

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