Acti-Bliz veterans found The 4 Winds Entertainment – to target untapped markets in the Middle East, Turkey, LATAM and more

Steven Huot, The 4 Winds Entertainment’s CEO

The 4 Winds Entertainment is a brand new publishing business, run by industry veterans with a wealth of experience at the likes of Activision Blizzard.

The 4 Winds team is built from a pool of talented and diverse industry experts, with  dedicated experience in opportunity markets such as the Middle East, Turkey, Russian speaking nations, India and LATAM – just to name a few.

They hope to seize the opportunity presented by markets that make up 40 per cent of the total population, or one billion people. Despite the enormous potential in these areas, few of the big names in games are taking full advantage of these opportunities.

The 4 Winds Entertainment’s CEO is Steven Huot, who has 20 years of experience at Blizzard. Huot led publishing and go-to-market across the company’s brands and regions – from the 1994 launch of Warcraft through to Blizzard’s mobile and console hits across all EEMEA.  Additionally, he led the establishment of Blizzard’s Latin America & Emerging Market divisions.

To find out more about the company, and its vision for the future, we sat down with Huot.

What’s the main objective behind forming The 4 Winds Entertainment?

As big publishers pull back from regional markets, they quickly lose the regional knowledge and expertise that allowed them to expand there in the first place. Their desire for a one-size-fits-all marketing solution does not work outside of the western mature market. Demand is growing in these other parts of the world at an exponential rate, where there is a yearly 12.5% revenue growth fuelled by big install of mobile devices and record internet penetration rates. Yet these markets are deeply misunderstood, and do not react the same way to standardized, big budget messaging. These new gamers have the same national pride and want to be seen as people that matter, as countries themselves, and be truly understood by the brand before they commit themselves to a game. 

This is why we decided to create The 4 Winds, to offer a rare, high quality service to other publishers and developers focused on the Opportunity Markets. We would like to see ourselves as a one-stop solution to grow their business in those markets, thanks to our regional expertise, analytics and market insights, business model and forecasting and product management. If needed, we can also switch to a traditional outsourcing service provider, executing customized go-to-market, find partnership with locally relevant alliances or co-publish their products and IPs in the territory. With this kind of industry, there is no such thing as a unified approach to servicing publishers, as it needs to fit their global visions and how eager they are to sail in these waters.

You spent over 25 years with Blizzard, why did you leave?

I am an entrepreneur at heart. I launched Blizzard’s brand and first 10 games, then left Blizzard for a few years to launch a web design and early social media focused online agency. I returned to Blizzard when the opportunity to lead their international expansion happened, starting with opening up Latin America. I knew the enormous potential of Latin America first-hand, and Brazil alone was just screaming for attention in 2009. Yet no one at Blizzard HQ could see it. I recognized this blind spot as a huge opportunity. So, I made that happen and it was a wild, successful ride up. I called the role being that of an “intrapreneur,” never fearing to be fired or challenged for presenting big ideas that push folks beyond their comfort zone. 

To change a large organization from within you must push constantly against complacency, and break conventions and fight stereotypes. It took a lot of energy to do so, and over the years, the rate of change slowed down as the company got bigger, and more “corporate think” took over internally. The fear of taking risk or of the unknown just does not play well in a typical Western corporate culture. Few companies are the likes of Google or Tesla, that innovates regardless of their size. Most get complacent, senior leaders do not stick their necks out and are unfortunately rewarded for towing the company line. That was never my way, and so I could see it finally as a time to do things differently. If they were not going to build upon market expansion, that left a huge hole for a company to do it for them.

Seeing this different path, where a localized, specialized marketing approach was working, and each of our actions resulted in successful, high margin growth, proved this had to be done. Yet if the big publishers did not want to add headcount to expand their ability and capacity, then if we did it, they would desperately need us, more so every year. So, I am building a company that knows exactly what to do and will exceed benchmarks every time for the best games and IPs. What could be more fun than that? 

The 4 Winds Entertainment team has experience in opportunity markets such as the Middle East, Turkey etc. Do you feel these markets are often ignored by publishers with a one-plan-fits-all globalised perspective?

Oh dear me, yes! That is exactly what is happening. Today big publishers measure markets based on what they each did in that market the previous years. They tend to forget that they did not actually launch in the region; or if they did make something “available,” they likely did so while missing even the most basic of things necessary to succeed, such as giving the ability to pay in local currencies or localizing in the language that which the audience understands. The Russian game market for example started booming in the late 1990s, when the jewel case was introduced, which allowed the market to grow tenfold, and curbed piracy thanks to a price strategy matching those illegal products. All that turned Russia into one of the top gaming markets in EMEA. .

Where of course publishers need to be measuring these Opportunity Markets on what they are today if you launch even remotely correctly, then multiplied by their uncommonly high growth rates. And sadly, success hides many sins. When you are printing money with high profit from your success in the West, and Wall Street measures you based on last year’s results using the wrong growth rates, (the regional ones not the global one) to measure you by, well, you feel ok. And bonuses are strong. So one doesn’t feel compelled to reach for new opportunities and push yourselves any further. And that mistake repeats, year after year for most publishers, instead only fighting it out for market share in the saturated, been-there-done-that markets they are familiar with and understand. And what happens is they just leave money on the table and large communities unsupported, getting a subpar level of service and content.

How will you use your and your team’s experience to better serve these regions?

We have seen success when even just the most basic of things were changed: a proper localization of assets and the addition of a culturally relevant marketing message or local content. That is the bare minimum, yet enough to see step change, and a huge percentage of an untapped market is gained. Last year, our team pitched the idea to include a subtle honour to Islamic culture, in the forms of Ramadan-themed sprays in Overwatch (around lanterns and fasting). The story has been picked up by regional communities but also many international outlets like Polygon pointing out that this has been long overdue in the gaming industry especially when other holiday-themed events like Christmas and Halloween are found in most games. We always champion ideas of bringing misinterpreted traditions and cultures in games, to truly connect with different audiences which have been alienated for years. It does not need to be a complete rework of the game, but just a gentle nod can be as impactful. We will start there, making the world’s best games approachable, playable, and payable for that region.

And then we will build upon that momentum, further connecting to local partners, content creators, community leaders and the esports ecosystem. We will partner with the best publishers or developers that have the best content for each market and bring those games to each of these regions in the right way. When we make examples of them, other publishers will see what they are truly missing. And the local gamers will scream for more as they are so hungry for a chance to play what they can only dream about today.

And we will keep going from there. We have amazing partnerships already cooking in India, MENA, Russia, and Turkey. The world is waiting for us!

Pricing (and often piracy in relation) seems to be a key issue for many ‘emerging’ markets, what are the problems and how can publishers best approach them?

For online games, and the SaaS model today for games, the speed of new content coming to the authentic game is too rich, piracy is not much of an issue now that a game never really ends. You can steal it, but it is always a lesser version of what you could get. Most people in these countries do not buy pirated copies because they want to, but because they have no other alternatives. The big publishers literally rarely give would-be buyers a way to pay with their local currencies, native payment solutions, and usually also priced out of the market by 3X or worse. So would be payers, become players in the only way they can, with a “free” version. This applies to Russia, MENA and Turkey. Let me pay, and I will pay to play.

And nowadays, with gates for payment from Steam, Apple, and Android pricing correctly for the market is not that hard either. Technology makes this easier by the day. In a perfect world, when you move from a low-priced market to a high-priced market, take your catalogue with you, but charge me more to “upgrade”. The same can apply to anything else in the realm of digital entertainment, that if priced right, it will pull them into the subscription offered. In Turkey, Spotify’s monthly subscription is €1.5 while Netflix is barely €3. The volume and a lifetime of payers makes this work. And there is no grey market loss because you have IP checks, local payment methods and currency restrictions. Price it right and watch profits grow, year after year. 

Streaming services are often talked about as being a key technology for such (often console adverse) markets, do you think that is a solution?

It is a solution but will happen in the West first. Markets ready with mature infrastructure and server nodes everywhere, and the “last mile” solved as well to ensure latency will have less issues. So, it will happen there, but not everywhere else, for a long time to come.

Streaming services in gaming are so far badly limited by content. No big publisher will give the game to them early, so you are stuck with a very limited back catalogue. Eventually, a winner will arise, and they will buy a massive content provider and move ahead of the pack. The current path seems to try to create their own games, but there are just far too many pitfalls to creating their own original content due to inherent game development challenges of time, live ops, etc. We have seen this happen recently with the likes of Stadia. So, it is well into the future even in the West, and even further in Opportunity Markets for steaming to make much of a dent. Sadly for the players in these high demand new markets, it’s not a solution they can count on to fill the gap anytime soon.

There is also the limitation of internet literacy in that region, and no proper regulations that control ISPs and other key solutions to make this a viable possibility. Most of the nations in Opportunity Markets have strict internet bandwidth quotas, and due to the lack of regulations and transparency in these sectors, those services could become plagued by latency issues, when hidden bandwidth throttling starts hitting their connection.

You say that you are seeking to support, not compete with developers and publishers in these regions. What does that mean practically speaking? 

We will partner with the best developers from the Western world, China, wherever. We are not going to develop our own games. We will ask the AAA game makers with pioneering spirits, who are hungry to expand and establish their brands first in the most exciting of markets left on earth to join us. Most in the international business community know what first mover advantage means for a brand and understand how different a brand can be in one country versus another impacted largely by how and when it arrived. Luxury brands in some countries fight to be the low-price leader in another when they arrived late or launched wrongly. KFC, as an example, is a high end, premium fast-food chain in many lands where they got in there first. Brands that got there early, and do it right carve out an optimal position. And these first moves make all the difference.

What was the inspiration behind the name ‘The 4 Winds Entertainment?’

My team and I were moved in our own lives by the spirit of adventure, and we recall how the winds moved early adventurers around the globe in a romantic, thrilling way. Those sailors returned as the conquering heroes, laden with the treasures and capital from the massive new trades and markets they found: the silk road, the Dutch West Indies Spice trade, etc. We want to instil that age-old tradition of dreaming of new worlds into the complacent gaming industry, where it has lost much of its spirit of expansion and discovery. We want to unite the world through playing games, but today so many are left out across the world, 40% of the earthlings in fact. The digital age of gaming needs to go North, South, East, or West, wherever the biggest opportunities await and let more of us in. We know where they live, a billion+ gamers, and we can help our partners sail there, with the trade winds at their backs, to let more onboard.

 

About Chris Wallace

Chris is MCV/DEVELOP's staff writer, joining the team after graduating from Cardiff University with a Master's degree in Magazine Journalism. He can regrettably be found on Twitter at @wallacec42, where he mostly explores his obsession with the Life is Strange series, for which he refuses to apologise.

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