HE'S just 29 years old, but already Rich Barnwell runs Ireland's biggest video game development outfit, Digit Game Studios. The young company has developed the most ambitious and expensive game ever produced here. Swords and sandals role-playing epic Kings of the Realm is going to be big.
"You have to have experience and investors who have real balls to go for this," Barnwell says, sitting in the kitchen of Digit's offices in Dublin's Silicon Docks. It's all exposed stonework and funky furniture. Hipster central.
"The games industry is bigger than the movie and music industry and it's growing at 9 per cent a year. The big franchises bring in over $1bn in a matter of days. Grand Theft Auto V was the big one last year. It came out on a Friday and had done $1bn before Sunday. We've raised over €4m."
Digit is funded by Delta, ACT and Enterprise Ireland. "It's a much riskier investment but the scale of return is huge if we are successful," he says
The development of Kings of the Realm is the most expensive project ever undertaken by an Irish firm. Similar games can cost between $20m and $25m, he adds. He's not planning to have to seek further funding.
"We're hoping not. We've been very fortunate. We made some smart moves at the beginning and we acquired some technology. The team here is very experienced. We've done this before. We made most of our mistakes in previous lives at other places," he laughs. "So that allows us to make some shortcuts."
Although only 29, Barnwell has been round the block. He's an industry veteran at this stage, having worked as chief executive at GameStop's Jolt Online Gaming and British independent game developer Jagex. His 25-strong team has put in time in some of the world's biggest games, helping to create and develop RuneScape, Tomb Raider, Colin McRae Battlefield Heroes, Championship Manager Rivals and mobile games Bejeweled and Chuzzle.
"Building the company has been the biggest cost. Finding the people. Our team is very international and what we do is very specialised. The skill pool isn't really here and the guys who have those skills have probably already been hired. We had to go international, so we have Brits, Germans, Polish, Americans ... all over," he says.
Digit Game Studios is blazing the way with the creation of "seamlessly cross-platform" games. This means that you can play video games on your iPad, laptop, smart phone or other device and you won't notice the difference. It also means that you can play against someone with an Android phone, even if you've got an iPhone. This for gamers is huge. Really huge. Some games have tried but this is the first all-platform MMO (Massively Multiplayer Online game).
Barnwell shows me around the office and in to see the design team. The graphics look really cool. Drawings of fantasy warriors are plastered up on the walls.
Kings of the Realm is a free-to-play game. "It's a business model where the game is free but certain elements of the content cost you money through microtransactions," says Barnwell. "You can buy [virtual] gold in the game and use it to speed up stuff – instead of waiting an hour to build something, you can make it happen right away. If you want to do something immediately, it might cost you money. That's how we make money from a very small percentage of the players. But it's a real balance."
The key to success in the gaming industry is finding "whales", Barnwell suggests. "Whales" are people who are complete addicts and pay shedloads of money over and over again. "About 95 per cent of the players don't pay a penny so you have to make enough out of the other five per cent to cover the costs of all the players," he says.
"If you are paying marketing acquisition costs for every player and only five per cent are giving you any money, then it's a big balancing act. How much can you afford to spend on each new player coming in? It's all maths then."
Digit Studio has a pile of data analytics crunching capacity, which will enable it to adapt to changing customer trends.
The cost of getting each new player varies considerably, according to Barnwell. Someone using IOS may cost $3 to $4, although someone playing via a browser may cost just 20 cent. But players using mobile devices are the big earners for the company. "A user on mobile might be twice as likely to spend money."
Success in reeling in the whales differs from game to game. "Some social games would have one to two per cent. For more hardcore games like us, we'd push towards four or five per cent. If we have a great day we might go up to 8 per cent."
"We don't see people spending money for the first couple of days, but then they might say, 'I'm enjoying this game, so I'll spend €5 or €10 in it.' Some people would spend a lot more. Some players get really immersed ... much more than we thought. We thought that we had six months' worth of content ready, until our top players got through it all in four weeks – which was brilliant to see."
The gaming industry is like the drug industry in that its flagship products may have a limited life span. Whereas big pharma gets hit by patents expiring, the gaming industry gets poleaxed by customer boredom. Kings of the Realm may only bring home the bacon for a limited time.
"It's game-dependent. A social game won't last that long but a game like ours, once it's fully implemented, it should keep going for 18 months to two years," he says. "We have another one in our heads but this one won't be done for a while.
"Some MMOs have being going for a long time. World of Warcraft has been going for more than a decade. It regularly does big content releases – and that's exactly what we're aiming to do."
But nailing a blockbuster game means that the sky will rain gold on Digit Games and Barnwell's young team. "Success in games can be incredibly rewarding. The profit margins are huge. We're selling virtual items so we don't have the stock problems other businesses have. We don't need warehouses or stock control, we just have to manage people."
The big costs are marketing and platform costs, with games companies traditionally having to pay the likes of Facebook or Apple's app store 30 per cent of revenues for each game sold. Keeping the staff happy too probably helps. Given that someone has brought an apple bake into the office and left it for their co-workers in the canteen, Barnwell's team is probably content.
Digit is also developing ancillary revenues from Kings of the Realm. The firm has licensed the brand to publisher Penguin for three books. It came about when Apprentice star Sir Alan Sugar tweeted about the company. This led to discussion with Penguin about complimentary books. "We've our first book coming in March. It's about the back story of the game and the story of where it's going to go. They are also examining possibilities for TV or movies."
But Barnwell is looking at the bigger picture for the Irish gaming sector too. Talk of tax breaks to encourage development in Ireland have been just that. Talk. "Other countries that have done it – like Canada – now have a very successful industry," he says. Digit has its own plans. And it might move a little bit faster than the Government.
Digit has set up a games company incubator, with about 14 companies already passing through the doors. Five of these have received funding from investors. "It's to drive the Irish games ecosystem," says Barnwell. "We are the most experienced gaming guys in the country by a mile. If we are in isolation we will struggle. If you try to bring people in from abroad, they'll ask you what the gaming industry is like here. That is a problem for us. We need to help build the industry up.
"If we can pull it off and turn Ireland into a development hub then the money that comes back in from these jobs will be huge. The big studios like Ubisoft in Canada are huge and employ thousands.
"We've 25 people now. We'd like to double or treble in the next year or two. My first game studio went from 10 people to 400 in two years. The growth is incredible. We can do the same thing here," he says.
"You talk to a 21-year-old and ask them what they want to do. Do they want to work on an ecommerce or B2B project, or do they want to make games? You know what the answer is already."