TONY HO: SKYMOONS A YEAR AFTER START-UP
it’s been a year since Tony Ho launched his start up Skymoons and brought The Journey of Flower to the world.
For a start up the first year is critical and Tony Ho has learned a lot and has a lot of advice for his fellow entrepreneurs. “Thinking thoroughly is something small enterprises need to focus on. It’s only then that they are likely to come up with something really unique.”
Skymoons first came to life in 2014 thanks to Tony Ho’s leadership. A year later it once again caught industry’s attention by launching the The Journey of Flower and then later again with its recent signing SEER
The Journey of Flower was the main focus of the attention. It reached the top of the App Store chart within 24 hours of its release and peaked at No. 2 on the Best-seller chart, where it still holds number No. 4 ranking one year later, Thanks to these successes, Skymoons has built a complete business model, something which CEO Tony Ho is very proud of.
According to Tony Ho, there are 2 key steps involved in generating this business model. The first is a good team. Less than a year into business, he realized that it takes more than a single person to build an enterprise. He told Long Hu Pao from L.H.P. that entrepreneurship is all about the team and also about partners. Ultimately success depends on the internal and external partners.
The second factor is the main tool in the business model namely Intellectual property. A fact LHP is also aware of and one he discussed at an IP strategy at an industry conference at Haikou in early 2015. At The Journey of Flower conference, he said to Tang Lijun that he hoped there would be four season of the TV series, so he could make as many series of the game.
As for converting from a marketing channel to publishing, Tony Ho didn’t see this as a challenge. For him, the essence of both a marketing channel and publisher is the user experience and the final result depends on your professionalism and understanding of the industry.
LHP: Since the media exposure from May last year, it has been over a year since you established Skymoons. Let’s start by talking about your perception of entrepreneurship?
Tony Ho: After a year in business, the deepest perception is probably that it takes more than a single person to build an enterprise; it’s built of a team and a group of partners, although the ultimate success still depends on the internal and external partners, and selecting reliable partners and cooperating with colleagues in the same industry. Realising the team is complete. is the most important factor.
Secondly, I have a feeling that there are a lot of people starting up their own business in today’s world. Especially in the gaming industry; it’s become a whole new world in just a year’s time. Many people have asked me for advice about starting a business. My advice to them is to think thoroughly, do what needs to be done, keep your integrity and yet be extraordinary. This is advice for small and medium sized enterprises, if your cash flow is not particularly strong, you still can start up a business, but do something unique and make it your own.
LPH: In your point of view, what does being unique mean in today’s mobile gaming industry?
Tony Ho: Everybody is doing the “Three Kingdoms” and “Journey to the West”, and to be fair it seems like a good and easy subject, but other companies in the industry have done it a hundred times. Then you think everyone has invested 3 to 5 million in a start up and you have to ask who are these companies who are doing the same thing which is likely to cause them problems. Firstly, micro-innovation is of no use to you; secondly, marketing channels or publishers are going to hate your game. You have to understand what you want to do, dare to challenge yourself and push the barriers. The brave, attack in small numbers, more willing to gamble than most. The most typical case is Wang Xinwen, their Dota Legend was a wild card in the industry. I think if they had created an ordinary game like Three Kingdoms or Journey to the West, they might have risked becoming mediocre. Instead despite a low rating from the channels, they just keep on going. In the end, everyone was surprised when a game like that changes the pattern of the entire industry.
LHP: I spoke to a CEO from a publisher, who also came from a cooperate background. During the interview, he mentioned that his company will always quickly follow up on any products rated B or C by big publishers. What’s your opinion on this?
Tony Ho: This is called the uncertainty principle. My opinion is not to allow yourself to become fixated by labels. Don’t label yourself especially before you have even started. Every product is different, you have to experience it, to see inside of the game, to test its system and structure. Ask questions, are there any new features in the game? Is it worth our co-operation? Don’t define it too early. Skymoons also has a research and development team just for developing card games, but if there is a producer asking me to be the agent for its product, I will still take a look at it in case it’s an excellent product.
LHP: Let’s talk about Skymoons. It’s not a small business, because of its backers, But from the point of duration and characteristics, it is still a start-up, and certainly can’t be compared with those first-line publishers. So according to you, what are the advantages and unique characteristics of Skymoons?
Tony Ho: The advantages and characteristics of an enterprise are closely related to the combination of the founder and the team. For example, the general view of Zhou Yahui. is more daring and aggressive and the characteristic of Kunlun is big investment and outlay. The expenses of taking a product and promoting it are tens of millions and are not for everyone. But this approach is closely related to the stage of the enterprise, without the money, there’s no point in calling for a big investment.
From this point of view, I think Skymoons has several characteristics. Firstly the combination of its relatively strong publishing and development team, which is less common in this country. For example, the founder of the Crimoon Technology is now our partner. It is a very low profile company, which doesn’t obviously participate in any activity other than to research and develop products, but at the same time, it has had some other successes like The Three Kingdoms Power UP.
On the other hand, the operation team of Skymoons is the first team to achieve tens of millions in revenue in the early gaming industry. They have already gained mass audiences. We’re very fortunate to have and retain such an adept marketing team.
LHP: I’ve spoken with someone who went from the marketing channel to publishing. He said his previous work experience is of great help to him today. What kind of help is there for you?
Tony Ho: Two points. First of all, I know the joys and sorrows of the marketing channel. Secondly, I know what the demand for the marketing channel is. For this reason, I’m using a more professional approach to marketing.
In terms of channels, I think you can’t think of it as a tool for heavy volumes. The marketing channel has its own pool of resources, and you need to understand when to use it and what time to use it. Unless you get the balance right, it’s very difficult to achieve your goal.
LHP: Can you tell me more about the marketing channel?
Tony Ho: We are always promoting our own products and we understand the marketing channel. In this case we feel confident when we are talking to the marketing channel. If there is a problem, we can talk to them directly and quickly learn more about the situation by conference call. We can even provide them some background data to make the solution clearer. Through our actions and experience we have learned that by letting them share the experience we have gained from tens of millions of users, we found that they don’t have to go through it again. In this case, the marketing channels will feel comfortable cooperating with us. These are the sort of things that a lot of publishers don’t see. You were asking me the about the features of Skymoons. I think this is one of our most important characteristics, a good combination of our teams.
LHP: How about money? Skymoons is not short of money, how do you spend yours?
Tony Ho: If it’s just about the money, then Skymoons has no advantage, but if product combination is an element, then we are more daring about where we put our cash.
LHP: The key is how you spend it? Everyone is talking about big investment.
Tony Ho: The promotion of a product costs at least 20 to 30 million, if not more than100 million. The result is in the peak in the users scale in a short period of time. But if the company is not competitive then it’s unable to tolerate the lower numbers. I believe that many people have gone through this, which indicates that all of the product marketing or anything else worth mentioning, lies in the foundation of the product itself. The product is the key to the figures, and all activity behind its value.
Based on this, I think that any product promotion should be based on a deep understanding of the game. There’s a rule in doing everything. For example, you asked whether it’s OK to do the subway and bus advertisement. I think it’s all about the timing. When my product has achieved the scale of a billion, and that I’ve gone through all the conventional channels, then it’s time for different territories, to try to reach the clients that I was unable to reach before. At this stage, this might be a more cost-effective method. But if you started out with overwhelming product marketing, frankly speaking such methods could be extremely risky.
From another point of view, I don’t think that you have to be on TV ads to make a success out of a game. But it is undeniable that a wide range of coverage can bring some branding element to the game. The two are complementary to each other as far as I’m concerned. I rather make less profit than have a lot of trial and error. In fact, no one wants to make mistakes. I think what I would prefer is a successful product. We Fire is a great product, but how did it achieve a revenue breakthrough of 200 to 300 million? What has it gone through? Take a close look and you will notice that the success of the mobile game in China mainly depends on the marketing channels. The first concern in launching a product is that what type of promotion the marketing channel can provide.
LHP: Is this your attitude towards product promotion?
Tony Ho: Yes. Because the ultimate goal of product promotion is to increase your user exposure and conversion rate. I preferred Mobile Assistant one click from installation and starting to play. This scenario is the most likely conversion possibility; hence my first step is to cover all these marketing channels. The second step will be the media, because the media has a number of relatively reliable players. I would start some discussions in their forums, creating an expectation, which is part of the overall marketing plan. Generally speaking, this process starts 6 to 12 months in advance; the most typical example is The Contract 2. Of course, there are successful cases for the end client marketing route like Fantasy Westward Journey too, so I think all roads lead to Rome, but ultimately every company needs to know what their speciality is and what’s the most appropriate for them. Because as a partner, what they really want to achieve is the transformation of the user, the size of the user, sustainability, and so on. Therefore, although advertising is very important, you need to know if it’s suitable for you.
LHP: Let’s talk about the business model of Skymoons, the The Journey of Flower has been performing well recently, and the integrated marketing has also been fantastic. The mobile game and TV show going online simultaneously, is a highlight for the season.
Tony Ho: I think this product is am example of IP bonding with the marketing channel. We announced our partnership with iQIYI at a conference in June. In this situation, the combination of the IP of the TV show with our ability to publish other channels was a great success.
The development The Journey of Flower is not a recent thing, and we have already started on a follow up. We’ve spoken to the author and the video production company. Therefore, it can be said that the The Journey of Flower is a product of three parties. We have a similar cooperation for our next product, My Own Swordsman. In addition we have recently announced the right to work with the SEER. We are looking forward to this franchise and its fans have also been waiting for 6 years. We believe that if this product becomes a success, it is likely to be the key project of Skymoons for several years. After all, SEER itself is a game, which has been on the PC for over 6 years.
LHP: You mentioned the IP strategy of Skymoons in early 2015. and told me that The Journey of Flower would be the first, but everyone is doing franchises today. From the IP of the The Journey of Flower, what’s the difference between Skymoons and the others?
Tony Ho: In the early days, the producer of the The Journey of Flower, Tang Lijun mentioned that there are no limits to the IP of the game. In the future it might become a theatre production or a movie. He said there could possibly be a sequel if its popularity is good. In addition to this, they are considering turning it into a comic book at the moment too. This means that the IP itself is never considered a short-term operation, and that they hoped to keep doing this for three or four years or even longer. I’ve told Tang Lijun that I really wanted her TV show and my game to be continued.
LHP: Somewhat similar to the mode of the American TV show, season by season.
Tony Ho: Correct, this way everybody is relaxed. If there’s a company it might be like Disney. Something with the same logo like the fairytale castle, but every time they release something, there is something new. That’s a relatively healthy ecosystem. This is more typical of Netease, owning the classic games, such as Fantasy Westward Journey and Journey to the West, and then Netease moving them from one platform to another so that they could continue. At least for now, his strategy is a success. This is what I look forward to in the long-term management of our franchises. Today, I think we finally have the opportunity to stand on to a relatively mainstream platform. Looking back, I would say that firstly, we don’t do short-term business and secondly we don’t only want to pursue the numbers. We hope that through the vision of globalization, or through the internal incubation culture, we can find a senior producer who can work with us for a long time.
LHP: Thanks to The Journey of Flower, I can really see the rise of Skymoons this year. How do you forecast the revenue of Skymoons this year?
Tony Ho: The year 2015 is now half way through. In the first six months our net profit is around 20 million. In the first four months before the release of the The Journey of Flower, the main source of income is the older product——this is the characteristic of our company, the life cycle of our product is much longer. I think it depends on our input to the game and the continuous communication with the marketing channel. If you are unable to do these, then your product probably won’t last. One of our older product the Three Kingdoms Power UP, has reached its 20th month, it still generates revenue of over 10 million. This product is actually a classic case of our continuous long-term operation with our mobile game agent, in which we have put in a lot of effort.
The plan for our future layout and product planning is the same as our long term plan. I’ve mentioned 4 products so far, and all these products have their own characteristics, including IP from the national level, animation, as well as the interaction and cooperation of their corresponding films. I’m not expecting them to break billions at once, but I expect them to reach 20 to 30 million, and then gradually increase. During which time I can re-issue a new game, but the ideal is the stability of the old product, and the promise of the new product.
LHP: The demand for you to choose a product is still fairly high under this mode. My next question is how do you look at a product?
Tony Ho: I’m going to talk about our product selection experience over the past few years. Most importantly you can’t have any expectations. Over the years we have seen a number of products, many of which we did not rate highly, ending up becoming very popular on the market. The most typical one is Youth of the Three Kingdoms and we have our own Three Kingdoms Power UP. We know how much it takes to get a product out there, but Youth of the Three Kingdoms had a great opening weekend. Therefore, we decided to push forward the 2.0 version of the “Three Kingdoms Power UP”, focusing on it to give it a try, nothing is impossible. Hence the first point is to reset your mentality to zero with your first encounter with a new product.
Second, I will pay 50 million to sign a product that the others will only pay a million for. When your enterprise has reached the capability of making such a move, you can raise your leverage, but in doing so, you will notice that there is not much difference from other products, as most products on the market are micro innovations. Since it’s a micro-innovation you should then consider how it can make an impact in the market. Let’s say if I invest 10 million, the impact it issued will be limited. What if I invest 30 million? 100 million? The important premise here is that you are willing to do it. It’s like why would anyone invest? Although its success rate is very low, why would people look for one to two successful team(s) out of dozens or even hundreds? In fact, it depends on your knowledge in the field, which is the same for me, while the gaming industry is my profession. And beside all of these, you still need some luck.