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Jolt deal puts 50 more jobs in play
20 December 2009
Jolt Online Gaming, the young gaming business set up by entrepreneur Dylan Collins, plans to create more than 50 new jobs and increase significantly its portfolio of online video games.
Collins, who is chief executive of Jolt, said that the expansion would be funded by games retailer GameStop, which acquired a majority stake in the company last month. Collins said that GameStop, which has operations around the world, was allocating significant financial resources in a bid to make Jolt a world leader in online gaming.
‘‘Whatever market GameStop are in, they always want to achieve scale too," said Collins, who sold his previous company, Demonware, to gaming giant Activision for around €10 million in 2007. He established Jolt last year and it has developed a portfolio of so-called ‘persistent browser games’, which are played over the internet rather than on consoles. The company has more than two million registered customers.
Collins said that the company had ‘‘a bunch of deals in the pipeline’’ for new titles, including several acquisitions.
The firm is also in talks with a number of major brands about licensing agreements, whereby Jolt would develop a game around the brand.
‘‘We are looking at big international brands. We have already done a deal with Playboy to develop a Playboy game, and we hope to do a number of other deals," he said. The company currently has three main games, plus a number of what Collins described as ‘‘tier two titles’’. He said he expected to have a further three titles up and running in the short term.
While all of Jolt’s games are free to play, gamers have the option of paying a few dollars a month to avail of upgrades and extra features. Around 20 to 25 per cent of customers - about 500,000 of its current base - chose to pay the monthly fee, according to Collins.
‘‘The online video game market is growing at 15 per cent a year. It is outperforming the overall gaming market by a distance. We are working to get as much of the market as we can," he said.
Following the deal with GameStop, the US multinational retailer has the biggest stake in Jolt, with the remainder held by Collins. All of the company’s other original backers, including Enterprise Ireland and a number of private investors, agreed to sell their stakes.
The terms of the deal have not been revealed, but Collins said that ‘‘every shareholder exited happy and with a smile’’. He continues to have full responsibility for running the Dublin based company, but can also draw upon GameStop’s resources if required.
Prior to the GameStop deal, Jolt had established operations in Dublin, Los Angeles and Delhi, and made low-profile acquisitions in Britain, Europe and the United States.
Collins said the company employed around 20 people and intended to hire 50 more following the deal. However, he said it remained unclear if they would be employed in Ireland.
He said that the cost base in Ireland was ‘‘extremely high’’ when compared with other countries, including Britain and the North. In particular, he said, the cost of employing graduates in Ireland was ‘‘dramatically more expensive’’ than in most other economies.
‘‘We will be recruiting50 people. The big question at the moment is where we do this. Ireland can’t compete in terms of costs. The gulf between us and other countries is just too huge. I am Irish and I am proud to be Irish. But with the cost of wages here, we might have to go to Britain or the North or further afield," said Collins.
Collins said that the talent pool in Ireland was quite small when compared with other countries. While Ireland produced graduates of high quality, they were in limited numbers, he said.
‘‘We are a country of four million people. The pool can only be so deep. One of the things we will look at is bringing people over from Britain to Ireland," he said.
The move into online gaming is a new departure for GameStop, which has concentrated on high-street retailing. The company has 6,100 stores in 18 countries, including5 9 in Ireland and Britain. It has annual revenues of about $12 billion.
‘‘We are in a very enviable position.
We are a private company with the balance sheet and the support of a publicly quoted multinational," said Collins.
‘‘This deal will allow us to take this company to the next level. It also works for GameStop. Online gaming is one of the biggest growth areas in the market, and this deal gives them direct access into one of the main players in the industry."
Collins said that the government should market Ireland as a hub for gaming, while also working at reducing the cost base in the country. He said that most of the world’s largest gaming companies already had Irish operations, but the sector had a low profile.
‘‘No one seems to know about it, but everyone is here. The government has a stated ambition of a smart economy. Here is their chance - start promoting Ireland as a gaming hub," he said.
He said he agreed with much of the government’s ambitions about developing a high-tech economy. However, he said the government needed to work at implementing the strategy. ‘‘The smart economic rhetoric needs to be reinforced," he said.
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