QA firm Keywords doubled its revenue in the first half of 2014 compared to last year as developers began to ramp up production of new generation titles.
Revenue rose to €14.3m (£11.3m), in line with expectations, in part thanks to a series of acquisitions that included Liquid Violet, Babel Media and Binari Sonori. The firm has also been at work on major releases including Watch Dogs, Kim Kardashian: Hollywood and Wildstar.
Speaking to Develop, the UK firm’s CEO Andrew Day said its growth reflects the increasing need for QA and localisation specialists, particularly as games continue to get even larger in scope and publishers target overseas markets.
Last year you hadn’t quite met expectations due to what you claimed was a lull in the next-gen console market at that time. How are studios treating development on new platforms now?
Things are getting much more predictable in terms of the new platform cycle. Obviously they’ve gone through the very disruptive process of actually launching the new consoles, and we saw some of the changes of directions that took place during the run up to those launches. Obviously those had effects on us and others in the industry. Now we’re through the launch we have more certainty and we’re seeing more stable production pipelines from our clients. Though post-launch there was a bit of a quiet period as people recovered a bit form the exertions of launch.
Have you noticed many changes compared to the last generation of consoles with how publishers are treating new hardware and QA?
Not really. I guess, overall, compared to the last console cycle, we still have fewer titles, and although there have been a few new IP releases, we’re still in a period where new IP is a bit of a rarity. We’ve seen the scaling back, particularly during the recessionary times, of the numbers of titles, but against that we’ve seen a continued trend to localise titles into more languages.
So for us demand remains equally strong, if not stronger, in the new cycle than in the old. Also games tend to be bigger and bigger these days. So the size of games, the amount of content, whether that be art, text or audio, going into a game is getting higher all the time.
And obviously the new platforms remove the kind of ceiling that was there on the old platforms. So we expect those games to continue to grow in size and complexity and therefore require more and more testing and localisation.
How have your acquisitions fared and affected the Keywords business?
I think it’s all been very positive news for us so far. We’ve been very pleased both with the choices of acquisitions we’ve made and with the way in which those businesses have formed an integral part of the Keywords group right from the start.
Are you planning any further acquisitions?
Acquisitions are going to remain a feature of the Keywords Group, the supply side of the equation. Companies like us that support global clients is still very fragmented so I think there is continued logic and continued reason to consolidate some of this on the supply side in order to provide a more capable supplier for the large publishers, whether they be in mobile, social or console games. So that will continue.
Also we’ve said publicly we intend to broaden our range of services for video game clients. Overtime we’ll be expanding our services into related areas such as customer support, art outsourcing and so on.
Is there a timeline for this?
It’s always open. I think what changes overtime is some of the acquisitions become less strategic in a way and become more infill.
So there could be an acquisition that makes sense because of its specific geography or because it’s doing something a little bit different to what we do so it might be more biased to a particular segment of the industry for instance, and it’ll help fill a bit of a gap in our portfolio.
But some of the bigger deals like Binari Sonori, those should be considered more strategic.
Going into the second half of the year, how’s it looking for Keywords?
I think it’s looking good. We’re facing a fairly extended and busy period which will see us through towards Christmas, which is not that typical of our cycle of activity. We tend to be quieter in October, November and December than it looks like we’re going to be this year.
I think that’s in part a function of the fact that there’s some squeeze to get games out for Christmas and Thanksgiving, but also there are quite a few games that are lining up to be released in Q1 2015.