Media moguls

Among the many companies in the games space eyeing expansion at the moment is Koch Media – and it may surprise you to learn exactly how ambitious its plans are.

While most consider Koch to be simply a software distributor, it is busily setting about overturning that perception to become, in CEO Klemens Kundratitz’s words, ‘a fully integrated cross-media independent.’

But that’s not all. With fingers in differently-flavoured pies including movies and online entertainment, diversification is clearly the phrase of the moment at Koch Media.

But as UK retail will be able to tell you from the past few weeks’ spectacular sales, it is the games market that offers perhaps the greatest opportunities at the moment, and Koch has set about building a company to take advantage of this.

Having already acquired developer Games That Matter last year, last week the company opened up its US office to strengthen the Deep Silver brand in the States. With these two new assets, Koch plans to make Deep Silver its consumer-facing publishing brand, and has hinted at several big-name projects in the works.

Working across traditional platforms, casual gaming, online entertainment and more, Koch plans to evolve rapidly after the release of forthcoming key titles including Superbike World Championship ‘08 and S.T.A.L.K.E.R Clear Sky.

Here, Kundratitz talks to MCV about how he plans to bring it all together…

What are the reasons behind the expansion of the Deep Silver label into the US?

It’s a logical step for us having established Deep Silver as a label in Europe and last year acquiring our first development studio in Vienna. I think the combination of internal and external studios will be important – it’s not one or the other, we are looking at both.

What areas of the market will Deep Silver be targeting as you ramp up the release schedule?

We are, as all publishers are, playing in both sides of the market, casual as well as core. Currently we are looking most carefully at the Nintendo formats.

Though we have all heard a lot about casual gaming, I think you shouldn’t underestimate the significance of the Nintendo platforms for gamers. It’s amazing – if you look at Wii hardware sales in America and in Europe it has beaten all forecasts – maybe even Nintendo’s own forecasts.

It shows that there’s a lot of people hungry for new games and we are well advised as publishers to invest in games for both Nintendo platforms.

But that doesn’t mean we are not interested in other platforms – this is a great opportunity, especially for independent companies like us, to reach out.

We are investing in big titles as well as in medium and smaller titles so it is not our aim to focus our portfolio on casual titles. They are important but we will stay true to the core gamer audience and will be releasing product for them. But it’s important to have a mixture, I think.

Koch has expanded greatly in the last year – how has the company changed overall?

We are not only involved in publishing and games software distribution. We are also in the film business in Germany and we are investing quite substantially in online entertainment and games. I think that’s important. As well as establishing in the US, we are a media company which embraces three areas – interactive entertainment, film and online community entertainment.

I also believe in organic growth and building our status in these new areas. In film we started in German-speaking territories, and now we are looking to expand it into other European markets. Just now we have our second film in the movies in Germany. We are building this alongside the video games company.

The third leg of our business is online and community-based entertainment. We are currently building a European online publishing business for online games of all kinds for the future, and we are also currently developing our first MMO. It is an MMORPG for a mainstream audience and it’s going to launch in the first quarter of next year.

My long term vision for the company is to embrace each of these areas and then leverage this know-how – we will have an advantage over companies which are more focused on one area. So really the main mission is to be a fully integrated cross-media independent. To do that in the size we are is absolutely a first and it’s quite exciting.

How do you think Deep Silver can compete in such a competitive publishing world?

We know the games to play, being an independent. There’s no reason to believe that the business will only be made up from existing global players. I believe there is room for independents – as long as the independents play their games well – it’s a different game that we play in the market.

We try not to compete directly with the global players, but concentrate on being a major alternative and to be quicker and closer to the market. It’s a skillset which includes many aspects of operating as an independent and I think we’ve proved to play that way well for many years.

Even in a consolidating market and with everybody talking about skyrocketing development costs, there’s absolutely room for a successful independent.

What do you think you offer that is different from other publishers?

There are many creative people out there and many of them don’t want to play with a major global player. They don’t look for the most powerful partner, they look for different things in their business partnerships and I think we can give them independence – we are a trustworthy, long term partner and we are financially strong to tackle the challenges of the video games business.

We are growing quite significantly in the last five years. It’s a solid, long-term business we are building. We have financed development out of our own cash flow and will continue to do so.