GamesBeat: Do you have any stated goals, like how many people you want to grow to by the end of the year?
Sheppard: Our aspiration over the next six months is to grow our headcount by 50. Those hires will be concentrated against extending the capabilities of our teams in new directions. 3D is a key growth factor for us. We know we need to go there. We want the quality of our next-generation games to be competitive with console and PC and other platforms.
To put that in context, 50 hires is roughly 15 percent of our total headcount today in the western business. It also encompasses a number of key leadership roles, targeting expansion of marketing activity and evolution of product management capabilities, although we have a strong foundation there.
Our push will be to compete on original IP. We’re going to build worlds that people will want to live in all the time. We want them to jump into the games first thing and take on their friends, take on the next challenge, face the next competition. We want those worlds to feel lush and exist for decades. We’re building the team and the capability to do that.
You’ll also see that headcount increase push us into new markets, similar to what you saw me doing at Kabam. We’ll be moving into Europe. We’re very confident that our games will do well there and that we can unlock a new audience that we haven’t approached up until now. Almost all of our games are purely in English. That tells you a lot about the opportunity there.
GamesBeat: How do you feel about expanding at a time when there’s other people out there with a lot of resources as well? It used to be Gree and DeNA competing. Now you have King, Supercell, Gung Ho, a lot of different companies all on the worldwide expansion path.
Sheppard: It’s probably the most fun time to be in this space, if you’re at a big company. It’s going to be a different story for people at smaller companies, companies that aren’t at our scale of profits. Certainly there are people bigger than us and more profitable than us, but we can fund almost any investment we’d like to do.
If you look back to the prior cycles of gaming in console, PC, even coin-op, every generation of platforms or business models went through some degree of consolidation at a certain point. I think that time is now. It’s one of the key drivers behind my jump over here to Gree. That means the way we play the game is different, from an industry perspective, but it also means we’re going to build teams today that become the Infinity Wards of tomorrow, the Blizzards of tomorrow. My main activity is to focus on that, to make everything circular, in a good way.
The revenue scale, the profit scale of this business gives us the luxury of investing in building those teams. Protecting the business is the best way to protect talent and grow talent, and having the patience to win long-term. That gives you the ability to bring people along in a way that I’ve never had a chance to in prior roles. It changes my role a bit, from being chief growth agent in my prior role to being someone who focuses on talent growth.
GamesBeat: How large is your business now, as far as giving you the foundation in the west to make more investments? What’s your most successful game? Have you talked about some of your Western stats, like monthly users and things like that?
Sheppard: We don’t break out our Western revenues, but I can tell you we’ve grown four times in revenue over the last three years. The business in the west is profitable. Our two biggest games in the west now are War of Nations and Knights and Dragons. Those are not only our top titles, but War of Nations is an internally produced title from people who came in through Gree, OpenFeint, and Funzio. It’s produced by our strategy studio. Knights and Dragons is produced by our development partner in Vancouver, IUGO. That’s an example of our RPG publishing efforts. Both are great games, award-winners in their own regard, and destined to be very large players in their genres.
We continue to invest in those games. We continue to invest in the Funzio titles from back in the day. We have an enormous footprint of loyal customers who are actively engaged. I’m working with the teams on those games to raise their quality to the next level. There’s so much more we could be doing in terms of visual interaction. The overall fidelity of the games can be up-rezzed.
Our smartphone business is growing globally in a very compelling way.
GamesBeat: Do you feel like you have to run the business as a profitable Western division, or can you use a lot of Japan’s resources as well?
Sheppard: On an operating basis, I prefer to run it as a Western business that’s profitable unto itself. It creates discipline. What’s unique about free-to-play is that the service aspects of the game mean you have to run games in addition to building new games. What’s implicit in that financial arithmetic, and a lot of companies don’t take this into account, is that by operating games today you learn how to build better games tomorrow. It becomes about making the right operational, talent development, and tech choices along the way to free your team up to pursue more innovative game design, tech, experiences, all of that. I’m a fan of doing that.
What’s great from a balance sheet perspective is that we are very much a part of the broader Gree business. We have access to that $500 million on the balance sheet. We’re actively looking for investment opportunities to help grow Gree to the next level, and also to expand our footprint. We’re attacking RPG and strategy because, when I came here and interviewed during the first 60 days, that was clearly what the team here is passionate about. Our ambitions are quite large.