The survival of 505 Games

I don’t think I’ve mentioned Cooking Mama once.”

45 minutes into our interview with Tim Woodley, head of global brand for 505 Games, and indeed he had not mentioned the franchise on which the publisher had made its name.

It’s been two years of almost constant change for 505. It was once best known for those Mama games, plus a certain Zumba title, but today it is topping the charts with shooter Payday 2 and winning over Xbox fans with thought-provoking digital-only game, Brothers: A Tale of Two Sons.

When I first joined the company five years ago, 90 per cent of our content was on Nintendo’s formats,” says Woodley. The first thing I had to do was move the company away from that melting iceberg and onto the high-definition consoles.

And with limited resource and funds, that spawned IL-2 Sturmovik and Naughty Bear. Both were very profitable for us, because we made clever deals and sold half a million units worldwide. To the outside world that may not look impressive, but for us it’s all about the bottom line.”

"We have reinvented ourselves pretty much every year."

Small and mid-sized publishers have suffered over the last four years, squeezed out due to the dramatic changes in market dynamics. 505 Games hasn’t been one of them.

One of the things we have done quite successfully over the last few years is reinvent ourselves pretty much every year,” says Woodley. We look at the market and where we are, and we try to adapt.”

Much of 505’s recent success has been due to its flexibility and its ability to spot opportunities, but there’s been an element of luck, too.

Woodley helped lead 505 Games from Cooking Mama to HD titles, but it was the incredible success of Zumba Fitness that gave the firm the financial impetus it needed to push on. And that was a phenomenon that almost didn’t happen.

We picked up Zumba initially just because we didn’t have any Kinect launch titles, and we thought that would be an interesting opportunity,” recalls Woodley.

We kind of disregarded the Wii SKU for a long time, for no other reason than retail was telling us that Wii was dead that Christmas. So we decided to put the Wii SKU out later, and maybe as an online exclusive. But then Amazon and other online retailers were phoning us up saying: ‘We’ve had a couple of thousand pre-orders for this Wii SKU’. So we started to support it a bit more, and by the time it launched in the UK, we had 46,000 pre-orders.”

What followed was yet another transition for 505 Games. It partnered with Rebellion to launch Sniper Elite V2, a game that had big competition in the form of City Interactive’s Sniper: Ghost Warrior 2, but 505 held its own. And Sniper Elite V2 became the firm’s first million-seller.

Now the company has similar targets for Payday 2.

We got together with Payday developer Overkill in E3 2012. And it was a meeting of minds really, because Overkill was looking for the right kind of publisher to give them the attention and freedom they felt they deserved.

All too often publishers tend to interfere too much. We are really just there to facilitate, encourage, finance and to make sure that their message is amplified to the world.”

And Woodley believes the team at 505 Games is one of the most capable units in doing this, which is why it has managed to partner with these developers.

We can stand toe-to-toe with anyone in the market in terms of sales and marketing and so forth. We have a hell of a lot of experience and veterans from rival publishers that have come to 505 almost as an antidote to that bureaucracy.”

"We are launching Terraria in a box because we think the lack
of digital uptake in France, Germany etc is prohibiting sales."

Payday 2 was another moment of transition for 505. It marked the first time it launched a hybrid title – a game released physically and digitally at the same time.

The difficulty for us is: How many units in that scenario do you sell into retail? We didn’t know how much cannibalisation would happen,” continues Woodley.

The first Payday was a PSN hit, so we knew that PS3 would probably get the greater share of downloads versus retail. But we didn’t really know how many we should sell into Wal-Mart, GAME or Micromania.

It varies from territory to territory. Different markets have different digital acceptance, and that changes the further south you go in Europe. With the US we knew that Steam would take a large share of PC sales. But in Southern Europe it is a much more retail environment.

We’re actually launching [download game] Terraria in a box in September, because we think the lack of digital uptake in France, Germany, Spain and Italy, is prohibiting sales.

Terraria has done incredibly well via digital, but mostly in North America. The game has done 110,000 in Japan so we have had our first Japanese hit, which is great. But we put that in a box, and most of those sales were at retail. We think the same thing is happening in mainland Europe, where people are more comfortable with boxes.”

"It is that flexibility, that speedboat against the oil tanker,
that means we are still here today."

Terraria, released earlier this year, was another new experience for the team at 505 Games: an indie title, originally released for PC that the firm made a hit on XBLA and PSN.

It was the success of Terraria that gave the company the confidence to launch Brothers: A Tale of Two Sons. The Starbreeze-developed game has won huge critical plaudits (Peter Molyneux even visited 505’s E3 room to play the game) and has held the No.3 position in the XBLA charts since its debut.

This is the 505 Games of today. Not just that Cooking Mama firm, but the publisher of a string of IP, from big shooters such as Sniper Elite and Payday, to artistic, digital games like Terraria and Beyond.

It has managed to survive in an industry that, according to the analysts, has no room for the likes of 505 Games.

Says Woodley: We never give ourselves these arbitrary targets because we don’t have to. It’s not like we have to show quarter-on-quarter or year-on-year growth.

We don’t want to go backwards. But we do talk a lot about sustainable, profitable business. It’s really about having stability within the company and making sure you’re not growing unnecessarily and then having to shrink when the times get tough. That’s the hallmark of what is ultimately still a family business.”

It may not be growing unnecessarily, but 505 is still investing. It opened a separate free-to-play division in the company, it’s partnering with Kickstarter project Takedown and it’s moving onto next-gen consoles – albeit tentatively – with Sniper Elite V3.

Our next-gen strategy is to wait and see what happens. Hopefully we can come out within the launch period of Xbox One and PS4, establish a presence as the first sniping franchise in the next-generation, then build on that as the install base grows. That’s about as close to strategic as we get, because we like to remain flexible.

505 Games is a company built on being able to change quickly. From kids titles to Xbox 360 shooters to Facebook games to digital download to next-gen. This is a company that doesn’t stick rigidly to a plan, but can be alter its trajectory quickly, something that’s crucial to surviving an industry that has a habit of doing just that.

One of the first meetings I had when I joined 505 Games was with our senior management in Milan,” concludes Woodley.

I went to present my overall thinking for the strategic direction of the company. They listened very attentively as I reve