26 Nov 2015
Sloan alumnus Enrico Pitono is mastering the art of strategy while navigating the enigmatic world of mobile app gaming
Enrico Pitono SLN2014 has always been a passionate gamer. After 16 years in banking and travelling across the world, he turned to mobile games to pass the time on gruelling journeys. He secured a year-and-a-half sabbatical from his job at the OCBC Bank, Singapore's longest established local bank, and chose to study London Business School’s (LBS) Masters in Sloan Masters in Leadership and Strategy with entrepreneurial pursuits in mind.
In June 2015 he launched Eggward's Lab, a competitive match-3 game, developed by Matata Corporation, his new business. In just two months it landed the top five spot in the App Store Netherlands, Thailand, Singapore, Malaysia, Indonesia, Macao, and other countries.
The game is unique, as it has a fascinating story to tell. The likes of Candy Crush Saga, Jelly Splash and Bejeweled series games depend on impulse play, whereas Eggward’s Lab builds an end-to-end experience with endearing characters, such as ‘Pia MacDonald’, a cooking protégé and former opera singer, ‘Madeleine Stucchi’.
The characters, created by Pitono are inspired by his Sloan study group. He says: “LBS creates diverse learning sub-groups, so that we can learn from one another. My group was made up of a Canadian, British, Italian and Russian – all from different backgrounds with different traits.
“There are six characters in the game and each of them illustrates certain behaviours, based on my classmates.”
Two locations, two strategies
Though Matata is a small start-up with just a few employees, it already operates in two locations: Matata Corporation UK Limited in Richmond and Matata Studio Indonesia in Jakarta. Each base has a very specific purpose. The UK focuses on distribution and product development while Indonesia is a hub for service development.
Enrico is prepared for the long game. According to the 2015 Global Games Market Report by Newzoo, the worldwide games market will reach US$113.3 billion by 2018.
The market for smartphones and tablets will rise from US$30.0 billion in 2015 to $44.2 billion in 2018, taking 39 per cent of the global games market. While in 2015, China and the US are on a par for the number one share of the app games market, there is a hidden gem. Indonesia. The country has more than 250 million people, a booming app market and already accounts for half of the US$1.4 billion game market in Southeast Asia.
“According to Facebook, there are 70 million smartphone users in Indonesia,” says Pitono. “That is about 40 per cent of the population there. Meaning there is still another 60 per cent of the pie to take.”
The goal is to delight customers by creating the ultimate game experience for casual players, enhanced by mobile connectivity amongst friends. Lastly, the products should remain ad free. “The business model is to focus on in-app purchases and boosters” he says.
“We don’t want to interrupt people with ads. We are controlling the environment they are playing in, from the song to the colour. You can put people inside an experience bubble, but that ‘reality’ is ruined if they see an Asda ad.”
He explains that in order to reach his goals of creating a colourful and powerful user experience, first, he had to test out the product.
1. Strategy one: localisation
“Indonesia is quite nationalistic in a way,” he says. “It welcomes local products.”
App stores are making global distribution cheaper than ever before, as mobile games are just one click away from mass markets. But there are challenges in localising. For example, what translation methods should be chosen? What regulations must be involved? Pitono is Indonesian and made the most of his insider local market knowledge; he delivered a high-end game, which did well, but attracted an unexpected demographic.
“To my surprise, most of the downloaders are aged between 25 and 55: a significant range. But the biggest proportion of users are 45-year-olds; mostly women based in the suburbs,” he says.
He adds that LBS taught him that you can start out with a strategy in mind, but when executing it, you have to be able to adapt to local markets and react to new insights, exactly like his target demographic. In July 2015, he shifted strategy to target more users downloading the product.
2. Strategy two: service development
“We used our first product to show off. To show what we could do,” he says. Because of the success of the game in Indonesia and neighbouring regions, Pitono was approached by the Indonesian government to help develop a digital strategy for an entertainment hub, similar to London’s West End.
Currently, Indonesians travel out for their yearly quota of music. The project’s aim is to attract local people (and inhabitants of neighbouring islands) to view Indonesia as an entertainment venue and theatre destination.
Inspired by his behavioural research on personalities and traits, proven by the success of Eggward’s Lab characters, Pitono suggested an app based on the popular film Frozen, with an emphasis on the music from the popular animation. This is just one example of the demand for mobile gaming expertise in the region – something Pitono plans to capitalise on.
3. Strategy three: product development
“In the UK we are going to focus on creating our own products,” says Pitono. He explains that access to cloud-based offerings such as Google and Apple is better in the UK than elsewhere. Moreover, London is a good place to start up a business. In fact, in March 2015 he did so, in just three days.
“The UK government supports entrepreneurs. It offers tax breaks to games, music and films promoting British culture,” he says.
He also credits London’s Silicon Roundabout – a technology cluster located in Central and East London – for adding to the much needed mobile game developer network.
In addition, his Richmond base is strategically positioned with other online companies, such as eBay, PayPal and the Haymarket Media Group. “The location provides a network that I couldn’t access, cocooned in Indonesia,” he says. By keeping an ear to the ground, Pitono has been privy to information such as Facebook’s plan to limit the number of invites Eggward’s competitors is allowed to send.
To sell of not to sell?
When the mobile gaming app started to hit the headlines, Pitono received an email. “It was Facebook,” he says. The online social networking giant had noticed the app was performing well. After meeting with a Facebook representative, he was offered funding – not all cash – by FbStart, a new programme designed to help early stage mobile ventures. Today, Matata receives help in the form of free subscription to necessary services for further development.
But Facebook has not been the only company to show interest in Matata.
“A big online-app company, which remains unnamed, called and made us a deal,” he says. The offer was a cash payment for an 80 per cent stake in the company. “But, there was a catch, they would have the rights to restructure the company at any time.” In addition, he wouldn’t be able to follow his passion for gaming and set up a similar company elsewhere.
“There are lots of start-ups selling to bigger companies,” he says. “They have limited business plans and simply sell to the highest bidder.
“But I really want to create products, and really want to run the business.”
In fact, LBS’s Sloan programme taught him to expect such offers. “I was warned about VCs. If you have a good product, they will buy you out.”
Pitono’s unforgettable egg- themed characters are only just the start, with the right strategies in place, he is game set and match-ready to take on the lucrative sphere of mobile app gaming.
Author: Anna Johnston