Ultizen's Lan Haiwen Discusses the Latest Gaming Industry Developments

Includes: EA, MSFT, TTWO
by: Matthew Rafat

With the Electronic Arts (ERTS) Take-Two (NASDAQ:TTWO) deal falling through, I had the opportunity to interview Lan Haiwen, CEO of the Chinese game development company, Ultizen:

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He gives his opinion on what will happen with Take-Two and provides a dire assessment of the gaming industry's X-Mas sales targets. While many investors like to say gaming is recession-proof, this X-Mas season may prove them wrong. My interview with Mr. Haiwen is below:

Where is your company headquartered? Please list how many employees you have in each specific country to give readers a better idea of your size and global reach.

LH: [We are] headquartered in Shanghai, China. Ultizen has [totally] over 350 employees, 300 in Shanghai, China, 50 in Beijing, China, and two in L.A. [US].

Please explain the background behind “Ultizen” as your company’s name.

LH: Ultizen means Ultimate Zen

Does your company have a focus in terms of what kinds of games it makes (i.e., sports, role playing, action)? If so, why did your company decide to focus on that particular area? What is the name of the new XBOX game your company is making for Microsoft (NASDAQ:MSFT), what kind of game is it, and when is its expected release date?

LH: We focus on casual game development mainly on PC and Mobile phone[s]. We also do game outsourcing work for oversea studios/publishers. We believe the needs of game outsourcing [will] be huge, as the next gen games cost so much money and time on development. We also believe casual games [will] grow fast as it targets to mass market. The name of our new XBLA title is called Crazy Mouse - it is a family fun game, and will be released in [the] second half of October 2008. This is our own IP title, and Microsoft will publish globally.

[My note: see http://games.teamxbox.com/xbox-360/2100/Crazy-Mouse/]

[My note: given what I've heard at Adobe and Yahoo shareholder meetings, Mr. Haiwen is correct--mobile gaming is projected to be a huge market.]

How many total games has Microsoft asked you to make, and how did you manage to get its business?

LH: As I said, it is not [that] Microsoft asked [for a] game, but our own IP title. We do get lots [of] support from Microsoft during the development, as we developed this title at Microsoft incubation center in Chengdu, China. We won the game design contest held by Microsoft, and got the chance to develop at the incubation center. This is the first Chin[ese] developed XBLA title that be published globally.

What are your competitive advantages over more established, well-known game companies?

LH: Our competitive advantage is creativity, development process, quality control and low cost.

What is your opinion on EA's decision to walk away from Take-Two? Do you believe another company will make an offer for Take-Two? If so, who do you believe is the next most likely suitor?

LH: I think it is a good deal, and Take-Two shall take it. I believe [there are] other companies [who] will offer to buy Take-Two, [and] I guess those potential buyers would be from big media groups rather than game companies.

What developments do you expect to see in the gaming industry over the next six months? Do you believe game makers will reach their X-Mas sales targets? What are the reasons for your belief?

LH: Yes, over the next six months, X-Mas [will] be [a] huge sales season. [But] I believe only 10% will reach their targets, as the econom[ic] environment is really bad and people may reduce their shopping budget.

8. In 100 words or less, please tell me anything else you would like to share about your company.

LH: I would like to use [much] less words: the best game studio in China.

Mr. Haiwen clearly has enthusiasm for his work. I thank him for the opportunity to interview him over email.