MCV is aware that you've already started poaching a few experienced, high-level industry sales and marketing execs. What's the plan for this recruitment drive?
It is particularly important to have games-specific expertise in sales, marketing and PR. We are going out in the marketplace now and we have been working on a recruitment effort to identify some real quality individuals that we're going to bring into the business, and will be making some announcements shortly.
What we basically have to do is get up and functional this year. I think we'll have at least five or six EMEA-wide management staff here, and probably five or six marketing folks, and then 15 to 17 sales people. We'll build the foundation in 2007 and really capitalise in 2008.
You've attempted to crack the games industry once before. Why have you decided to return now?
There are a couple of reasons – one is what's happening in the wider entertainment world, which is part of our broader strategy. We've got our DVD movie side, which has grown rapidly for a number of years and has levelled off and is now declining a bit. Down the road, maybe in six years, you've got digital distribution, which will be commercially viable at the point, and contributing a lot of dollars.
We've been working on the development side of the business for a few years, and we put our North American plans into place on a marketing and third party development basis a couple of years ago. Now we're ready to put together the final pieces of the direct-to-retail component.
How will your licensing set-up work, and what are your targets for the next few years?
This move into games isn't going to preclude us from licensing products – we have a broader portfolio of IP than we have development capability at the moment. So our partners like EA, Midway and Eidos will continue to be actively licensing IP, but I think you'll see a larger percentage of Warner properties come on board as we develop the extra teams.
What are your targets for this new division, and how committed to games are you this time around?
This is going to be a billion dollar division within a five-year period. Warner is not a stranger to the business – through our licensed properties we probably notched up $2 billion dollars of retail sales between 2001 and 2007.
We've chosen to let other people take the risk and now we feel that we can take a bigger share of that overall entertainment dollar with games.
We have our own distribution centres, which are shipping hundreds of thousands of units into every major territory in Europe, and it's a base we can expand upon.
The ability to cross promote our games product with our movie product in a compelling way will be key – our home video guys are very keen to target PS3 and 360 owners with next-gen movie formats as well, so there are so many reasons for us to work together.
What about developing new IP?
It is vital to be a fully functional publisher. We are not just an arm of a business that is simply going to leverage the movie properties that Warner has – we are going to be a creative force as well.
One of the properties we have that we're going to be running with in May is Speed Racer. It is going to be a major release and we are going to bring out a couple of Nintendo-exclusive Wii and DS SKUs which are going to be fantastic.
Are you looking for new partnerships or acquisitions?
We have Brash Entertainment, of course, but we also have six different partners we're running with in North America, and we're going to bulk up here as we move more global.
I think Warner would be attractive not only in terms of distribution and marketing but also our ability to fund these things and get some great IP to work on as well.
What do you feel Warner can bring to market that will be different to how ‘traditional' publishers operate?
Our business model is somewhat cutting edge. Are we going to build our internal development capacity? Absolutely. Are we going to build on the great library of IP that Warner has? Absolutely. Are we committed to our teams at Monolith and others to make game-specific IP? Absolutely.
But then we can work with the whole new breed of self-funded developers, where they can build IP, licence IP, manage the creative process in compelling ways – and if they don't want to have the overhead or burden of managing a worldwide publishing organisation, we can help them do that.