Santa Ana’s True Games Interactive, a startup maker of online video games, has been acquired by Indian media and entertainment group UTV Software Communi-cations Ltd.
Mumbai-based UTV bought an 80% stake in True Games in a deal worth “well north of $10 million,” said Jeff Lujan, True Games cofounder and chairman.
The deal allows True Games, which started in January, to work on developing several games played over the Internet, according to Lujan.
Before the deal, the company had much smaller ambitions,it initially set out to license a game and then strike deals to make it available online.
“We had gone out to license a game initially to generate immediate revenue,” Lujan said. “But the long-term goal was always to develop them. Now we can afford to put a lot of money into development and marketing.”
True Games plans to come up with ideas for games and then tap developers to create them. It then hopes to strike deals to make the games available in different markets. It’ll handle testing, marketing and deal with behind-the-scenes management.
The company has a business model called “free-to-play micro transactions” where games are free and players buy items along the way.
Items for purchase,such as weapons or access to other areas in the game,give players an edge over rivals. Others are just for fun, such as being able to customize the look of your online character.
It’s a model cofounders Lujan and Chief Executive Bob Drobish picked up from their previous gigs at Irvine’s K2 Network Inc., a publisher of online games.
True Games has a handful of workers including a few others from K2.
The company is looking to hire in the next few months and grow its staff to about 50 locally, according to Lujan.
It’s looking for office space in Irvine and expects to move from its spot in Santa Ana’s Digital Media Center next month.
True Games’ first release is due out late next year. The company hired Las Vegas-based Petroglyph Games Inc., a developer known for its “Star Wars” themed games, to create the game.
Each game has to have a large number of players to make money for the publisher, according to Lujan.
The tipping point is at about 10,000 concurrent players, he said.
“Once we get to that it’s a self-sustaining community,” Lujan said. “That’s the point where an in-game economy can exist.”
True Games’ goal is to build up 50,000 to 100,000 players for each game. They’d pay an average of $2 to $30 per transaction.
The company hopes to be profitable by the release of its third game,about five years down the line.
Details about the four games it’s working on are under lock and key.
Seeking Developers
Lujan is traveling around the U.S. meeting with potential developers and is exploring themes that work for players all over the world.
Some ideas that might work in the U.S. won’t go over well in Europe or Asia, he said.
“Superheroes aren’t big in Europe,it’s an American concept,” he said.
True Games will be competing with the big guys in online games, including Irvine’s Blizzard Entertainment Inc., part of Vivendi SA’s Activision Blizzard Inc.
Being part of UTV could help True Games. UTV has operations in television, movies, the Internet and video games. Walt Disney Co. owns about a third of the company.
