The Masters Plan

The Masters Plan
Cousens and Codemasters, you feel, kind of need each other and certainly suit each other; two venerable UK games market institutions, both of whom have enjoyed sustained success but have also been buffeted by market turbulence and the odd crisis, joining together for one last big job. Hey, it could be a buddy movie. Although the fact that the last big job is an IPO sometime in 2008 won’t put many bums on seats in Idaho.

Nevertheless there’s a certain Butch and Sundance poetry to this coupling that could secure a bright future for one and a burnished legacy for the other.

Already Cousens is making his mark. Having joined the last privately-owned, independent British publisher of any significance less than two years ago, his stewardship has seen the £13.1m loss of 2005 turn into a £1.1m profit for the 12 months ending June 30th 2006 – with revenues up to £52m.
He’s now eyeing sales of around £85m, with a profit margin forecast of around ten per cent.

The growth has come through what Cousens calls sharper exploitation of existing brands (largely Brian Lara and TOCA Race Driver) allied with a broadening of Codemasters’ global reach – this is a company that boasts a fine history but has always struggled with geography.

“It would be fair to say that we’ve previously been a little UK-centric in our thinking, from development to sales. In the last 18 months we’ve pushed into France and Germany and expanded into America.”
Stateside, in fact, is possibly where Codemasters’ new boss has made his presence felt most effectively. The firm’s products are now distributed by Warner Bros, the world’s biggest entertainment company in the world’s biggest games market – and it is clear that Cousens’ contacts were key in bringing the two sides together.

“Historically, less than ten per cent of our revenues have come from the US, so if we can raise that to 25 per cent, in partnership with Warners, that would be a home run for us.” There has also been an investment in development as Codemasters moves up to the next generation, with PlayStation 2 being largely left behind.

 “We had to support next-gen and I didn’t want us to be a rendition behind in terms of software cycles.
“Will I leave some sales on legacy platforms? Quite possibly, but we don’t have the capacity to be all things to all men.” And when it comes to investment, which it will, the money men want to see a publisher leading the way, not mopping up.

Cousens knows that Codemasters has to pick platforms and projects more carefully than most, it needs to move forward without stumbling as it can’t carry any fat in its release schedule or its infrastructure as easily as bulkier outfits.

He reflects: “There’s always a lot of talk about scale and what that brings, and some would say that a company with £100 million revenues isn’t equipped for a next-gen market and is little more than a developer.

“We could have taken that route, we could have leveraged the muscle of the super powers, but we want a publishing revenue profile. We want to carry on doing what we’re doing and if market conditions remain favourable, we want to go to the stock exchange as a fully-fledged publisher. Then let’s see where that sort of funding can take us in five years.”

As well as its own performance, of course, Codemasters’ IPO is dependent on factors outside of its control, such as PlayStation 3 being a massive success and others not souring the City’s view of the market in general.

In the shorter term, and in the firm’s own hands, Brian Lara International Cricket 2007 is out this month in time for the cricket World Cup. The big release of the summer will be Colin McRae DIRT on Xbox 360, PlayStation 3 and PC followed by Clive Barker’s Jericho and Fall of Liberty on the same formats.

These will be the titles that illustrate the development investment and restructuring of the last two years. DIRT will also showcase Codemasters’ proprietary Neon technology, a next-gen game engine that the firm believes could be key not just to its future content but to its flotation. It may well turn out to be as important commercially as it is creatively. More on this as the year unfolds, products emerge and, just maybe, deals are signed.

Musing on what’s changed and what is still changing at Codemasters, Cousens seems conflicted. He clearly has great respect for the family company (the family and the company, in fact) and its 21-year commitment to creativity, but he also acknowledges that things have moved on. “What’s changed? Globalisation, systems, management, belief, ambition, development. But Codemasters is, in other ways, still the same company. It still stands for something and if we get things right it will stand for something for a long time to come.”


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