“We are not looking for studios, we are looking for products”: ZiMAD about the puzzle market and the search for games to buy

Galina Zueva

About the working niche — games in the puzzle genre * (jigsaw)

*here and further, by puzzles we mean jigsaw puzzles, they are also jigsaw, which ZiMAD specializes in. Not to be confused with a wide category of puzzle games, which include many genres.   

Alexander Semenov, App2Top.ru : The starting question is about the niche in which you work. You are primarily engaged in puzzles. This is not a very broad market. Tell me, what is he like?

Galina Zueva, ZiMAD: The niche is really not very big, but highly competitive. There are enough companies in it that understand well how to promote and monetize their product.

We were one of the first in mobile to enter this market. In the summer of 2011, the release of our main project Magic Jigsaw Puzzles took place in the form of a full-fledged puzzle store. Before that, we were presented on the market in the form of separate applications with thematic sets of puzzles. During the next year or two, the first strong competitors began to appear on the market.

Magic Jigsaw Puzzles

The niche has a very good audience — 35+ women, a tasty and well-paying segment. It is not surprising that other companies are entering this market.

Now the market leaders together with us can be called Mobilityware, Easybrain, Veraxen and Kristanix.

Is it possible to say that puzzles in the spirit of “collect a picture” and coloring books, Sudoku, word games, where you are actively entering now, are one niche?

Galina: And yes, and no, because technically they are different genres. Although they certainly have a similar audience. Moreover, in some cases we are talking about the same users.

But sometimes the audience of close (as it seems) genres may vary depending, among other things, on the final implementation, the orientation of the content. For example, pixel coloring is initially aimed at a much younger audience, but it is worth translating it into a knitting setting, and you already attract another audience.

Do these games have the same target audience as match-3?

Galina: The audience of match-3 games is generally younger and has a different gender distribution. In our niche, the female audience prevails, and in the casual one there is also a large percentage of the male audience.

Speaking specifically about your niche, how difficult is it to enter?

Galina: I would like to say that it is impossible to enter here at all… But the experience of some fellow competitors in the last couple of years suggests that there is such an opportunity. Chances appear when you bring something new to the genre, even if it is a monetization model, when you approach product promotion in a new way.

How expensive is the audience for puzzles, if compared, for example, with casual games?

Galina: It is more expensive, we can see it by ourselves. There are two problems here.

Firstly, the niche is quite narrow. In the early years, we bought a lot and at an affordable price. The competition wasn’t that high. Now the competition has intensified, some colleagues, just like us, have large budgets, extensive expertise in monetization and promotion, a large player base for cross-promo, respectively, bids are increasing.

Secondly, in the same casual games, the audience has a very wide range of interests. You can concentrate on one interest or on another, experiment a lot.

How is the audience monetized in puzzles?

Galina: Three types of monetization are used: advertising, IAPs and subscriptions.

Which of these works better in puzzles?

Galina: A very individual question. It depends a lot on a particular game and on a particular publisher.

For example, advertising monetization has always worked very well for us, especially in the CIS. Here we remain one of the leading players in advertising traffic.

And advertising is responsible for most of the game’s profits?

Galina: Yes.

You are strong in the puzzle market. The most downloaded and most profitable project for you is Magic Jigsaw Puzzles. Why is it the only project of the company specifically in this genre today?

Galina: I would look at this situation from two sides:

• being a company with a successful product that we are known for in the b2b segment is already a victory;
• the concept of risk diversification really makes you think that it is necessary to develop both other products and other areas of activity with a focus on the development of the gaming portfolio as a whole.

Some time ago, we made internal structural changes, dividing the development teams into two independent divisions. One focuses on the development of MJP and its satellites, the second — on the rest of the gaming portfolio.

Among the satellites you can already observe: coloring books, solitaire, crosswords.

OK, but still, why, with such a success of Magic Jigsaw Puzzles, the division responsible for it does not make a separate Magic Jigsaw Puzzles, for example, about cats?

GALINA: There is a time for everything. First, you need to understand that the current game is supported. We regularly expand the functionality, add new modes and activities for players.

A possible future product under the banner of a successful MJP should be something special and new for the genre. We need to approach this carefully and responsibly. We don’t want to parasitize on our own name, it would be short-sighted.

At the same time, we are trying to give players from the MJP CA a new interesting experience in related genres by developing so-called satellite products.

Tell me more about it.

Galina: When deciding to launch a new product for the audience of the puzzle genre, we always proceed from the understanding of our target audience.

What is our target audience? This is an age-old female audience with certain interests. Among these interests, for example, DIY, hand-made, home economics, cooking, family, children.

This audience is more focused on realizing themselves in family and creative terms than in realizing themselves in any professional and business spheres.

When adding a new product to our portfolio, we must be sure that it will appeal to our core audience, loyal players who have supported us for many years. Of course, there are a lot of tests and figures behind these decisions.

About the company

ZiMAD is a middle-aged company by modern standards, but until recently it was not particularly public. What is she like today?

Galina: We are not young, yes. The company was founded in 2009. Our first office, which is also the head office, is located in San Francisco.

Now we have a dozen locations. Most of them are in Russia, two in Belarus and one in Ukraine.

What is the size of the entire team?

Galina: At the moment there are more than 200 of us.

Did the growth happen smoothly?

GALINA: I would say that we grew quite smoothly, without jerks. This made it possible to painlessly carry out the necessary reorganizations and optimization of the processes of internal interaction of various departments among themselves.

This often happens like this: in a particular region, more and more employees working remotely appear, we can see the potential of the region as a whole and in terms of attracting specialists of a certain profile. In this case, the decision to open an office may come by itself.

Office in Ulyanovsk

I want to talk about the States. Now teams with Russian roots have a common practice — to launch head offices abroad. The most popular points are Ireland and Cyprus. ZiMAD has a slightly different story, because the office was originally in the States. Tell me, please, what preferences does the head office in the USA give?

Galina: I think all the questions here are answered by the location itself — San Francisco. California is the location of the HQ giants of the IT industry: Apple, Facebook, Google, Twitter, etc.

Many advertising networks and other companies from the industry that we work with also have their head offices here.

Therefore, it is really important for us to be there to rotate in this environment, participate in conferences, be aware of the latest news and market trends. Communicating with people in person, it is easier to solve some issues, negotiate a partnership, find any points of contact.

About the search for new projects

You have a large team, many studios, and you are actively developing new games. Why, against this background, did you need a separate department that is engaged in the search for projects for investment?

Galina: As I noted at the beginning of the conversation, when we first entered the market, we had a lot to grow, the cost of attracting a user was acceptable, the competition was low.

The market has changed a lot. Competition for the user pushes for bold solutions in existing products, to expand the portfolio by genre.

Under these conditions, it seems logical for the company’s management not only to look for internal reserves for the development of the company and its gaming portfolio, but also to look at the potential that is already available in other products on the market.

We look at what products in similar genres and for similar audiences are on the market. We are figuring out with which of their developers/publishers we could establish a partnership on different terms, be useful to each other. As a result, we come to the topic of M&A.

Who exactly are you looking for now?

Galina: We have a certain specificity here.

Our larger and more experienced industry colleagues, such as Playrix and MRGV, have a different focus from us. They are focused on taking over studios. As for us, we are not looking for studios, we are looking for products.

So is this an investment or is it still a purchase?

Galina: Initially, when we started working in this direction at the end of last year, we looked at what our game dev community could offer and what we would be interested in taking into initial study.

At first, our clear goal was only to acquire potentially successful products close to our target audience. How exactly to include these products in the existing portfolio and processes is the second question that arises in the process.

Now we are ready to consider various forms of cooperation and business models that are both beneficial for us and for partners.

What is the working scenario? You find a product that interests you. What’s next?

Galina: It all starts with the fact that we look at the product itself and its metrics. Not only with the use of external analytics available to us, but also by communicating with partners who are able to give us a certain background.

When we understand the full picture of metrics, marketing, and monetization, we are already beginning to figure out which form of cooperation suits both sides. We begin to communicate based on how much both we and they will be interested.

There are different cases. For all companies, the issue of purchasing a game is psychologically scary. And that’s fine. And it’s especially scary not for companies of our level (for us this is a normal story), but for indies. They say, “we‘ve been working here for three years, working at night, and now a big uncle comes and wants to pick up the project.”

Of course, it can be difficult at this stage. If the product is really interesting to us, we are open to an open dialogue and search for mutually beneficial conditions.

Just above, you talked about metrics. Can you voice the achievement of which business indicators you require from projects?

Galina: I won’t talk specifically about the indicators in absolute terms. I’ll tell you what we’re looking at in general.

First, we look at the audience of the project. Sometimes we consider games that have just been released, but still prefer projects “with a history”, from which you can view metrics. It is important for us that the audience gathered by the project correlates with our target audience.

Secondly, of course, we are looking at retention.

Thirdly, we are looking at monetization. In particular, we analyze what monetization mechanics our potential partner tried, what went, what did not go. We even make the first cut, why it didn’t go, and what we can do about it.

The last cohort of metrics that we pay attention to is marketing. It is important for us to see the user’s price for the project, to understand in which geographies they tried, what was the sample, how relevant the UA results are and whether our internal UA specialists will be able to work with them from the first days, without global product processing.

If we are talking about a young project just preparing for release, will you pay for UA tests yourself?

Galina: Yes, absolutely. We understand that the transaction amount is not comparable in size with the price of the first UA tests. For us, this is one of the cheapest ways to evaluate a project.

And this applies not only to young projects. If we are talking about an already launched project, we also conduct our own UA tests. Before the final apruv, it is important for us to understand whether we can work with the project at the marketing level, whether we can “glue” previous campaigns with ours.

The final question. Can you tell me how much you are willing to buy projects for?

Galina: No, I can’t. Firstly, a trade secret. Secondly, the question is very individual. It depends on how long the application has been on the market, what kind of audience it has, in what format we are going to cooperate. I repeat: we are ready to consider different ways, but always on win-win terms.

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