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Business Rx: Tista Games considers forging partnerships as it builds the ‘HBO of games’

August 05, 2012

Olson Richardson, Tim Bostaph, Geoff Moore, Srikanth Devarajan, Aunim… (/ )

The Entrepreneur

Aunim Hossain started his first company as an undergrad studying electrical engineering and finance at the University of Pennsylvania. His company created a $100 handheld breast cancer screening device developed from university technology — a critical advance for public health, but not something to which the 22-year-old Hossain could readily relate. He left the company to pursue his own interests, working in finance before earning his MBA at Harvard and working for social game developer Zynga. He learned the rapid pace of product development at the game company, but wanted to get back to his start-up roots. Plus, he wanted to pursue the types of in-depth games that he enjoyed, but with an entirely new business model. He launched Tista Games, based in Rockville, last fall.

The pitch

Hossain

“Tista Games aims to be the HBO of games: a platform for high-quality, regularly scheduled episodic games that keeps players engaged and monetizing for years, not just weeks. We will distribute our games through the cloud on social networks (with no download required) and will release new episodes like television shows: for example on Tuesdays at 8 p.m.

“Games are like the movie business. A single game has a very high upfront cost — easily $50 million to develop a major game — before you know whether or not it will be successful. Then there is a huge fanfare with marketing around the launch of the game, sometimes requiring another $50 million to $100 million investment. If you’ve got a hit on your hands, it’s fantastic. It’s the biggest thing out there … for a month or so. Then you have to be on to developing the next thing.

“What we think is a more interesting model is the idea of a TV-show style game platform. We will deliver an evolving story line of new game content every week, hopefully to users waiting with bated breath. With our model, we can validate ‘hit’ games at 20 percent of the upfront cost of regular game developers because we can continuously test and improve.

“The major business challenge facing us is to create a game that can prove that our new platform model is viable. Our team is working hard to optimize our first game to hit our milestones for success. Still, we would not want to peg the success or failure of the platform on a single game because we believe that the platform has significant potential. Therefore, it would be ideal to be able to test our platform with multiple games. Ultimately, with multiple games on the platform, we will be able to cross-promote one game to another and manage the schedule like a TV network.

“Because it is early for us to divert our own resources to develop multiple games, should we forge partnerships with third-party game developers to launch on our platform alongside our title? If we structure that relationship, how do we find the right partners? How do we split the economics with the partner? And if partnerships are not the right way to go, how should we plan to test the viability of the platform if our first proprietary game does not succeed?”

The advice

Jason Shrensky, entrepreneur-in-residence, Dingman Center for Entrepreneurship

“Gaming as a business is hot and fiercely competitive. You want to establish your beachhead as fast as possible.

“Your idea to have third-party game development running contemporaneously with your own game development is a great way to hedge risk in proving out the value of your platform quickly. But you will face two big challenges in executing on this plan: getting quality game developers to take the risk of spending time developing on your unproven platform, and not burning too many of your company’s resources providing support to third-party developers who are not fully committed.

“One possible way to deal with these challenges is to hold a hackathon for game developers on your platform. A hackathon would be a relatively quick and easy mechanism to gauge third-party developer talent and interest. At the conclusion of the hackathon you can choose to hammer out partnerships with the best development teams, even having the flexibility to craft business terms as appropriate based on the perceived talent and commitment of each team. I think a gaming hackathon would be great for the D.C. tech community.”

Reaction

Hossain

“I like the idea of a hackathon. I have pretty strong connections to the game development community in New York. They hold monthly meet-ups to present new games. I can take cues from them and see how we could do something in D.C. Perhaps we could start with a D.C. game meet-up, and then do a hackathon.

“We’ve identified a few game developers that could easily adapt their games to our platform with minimal coding. We need to reach out them. Building those relationships will be a lot easier when our first game is released. In the gaming community, you get a lot more credibility when you have something to show. We’re close to releasing the first version of our first game – we’re posting updated info on our Facebook page, www.facebook.com/tistagames. Getting the first few episodes of our game right is critical.”