UnrealMind focuses on licensed games


Mobile Phone entertainment content provider UnrealMind Interactive Bhd is carving a niche in the licensed games market.

The company has successfully developed a Java game that is based on characters in a Hong Kong movie, Kung Fu Hustle, which will be released in December.

This is the first game to be developed by UnrealMind and also the first by a Malaysian company. UnrealMind chief executive officer Tan Swee Yeong said the successful development of the Kung Fu Hustle game was a milestone for the company, enabling it to establish a foothold in the mobile licensed games business.

With the track record of Kung Fu Hustle, we hope that we will be able to secure the rights to mote games in the future." said Tan, who is one of the three founders of the Mesdaq-listed company.

Apart from better profit margin, Tan said developing licensed games was a step up the value chain, which was crucial for the company to be ahead of its rivals.

In an interview with StarBiz, Tan admitted that the operating environment was challenging as the industry was highly fragmented due to low barriers for entry.

It is estimated that there are more than 400 mobile phone content providers in the country.

"It is tough. It gives me sleepless nights. But it also helps to keep me on my toes off the time," said the young entrepreneur, who formerly worked in the foreign exchange department of an Australian bank.

Given the stiff competition in the mobile phone content market, Tan is well aware of the importance of product differentiation. He also foresees consolidation in the industry, which will eventually "shake out" the weaker players. "We need to have a sustainable income source," he said.

And Tan knows that the ability to secure rights to develop licensed games centered on movie characters will open up a steady income source for UnrealMind as there are always new movies being made.

Besides tying up with celcos to distribute its products, UnrealMind currently has a lifestyle portal Shabox from which customers can download its products, such as ringtones, screensavers, picture images, and games into their mobile phones.

The company has teamed up with Sony Music Entertainment to provide ringtones using original song clips for Maxis subscribers. It currently supplies 95% of the content to Maxis caller ringtones service.

Although the company is only three years old, it has already achieved a leading position in the South-East Asian market.

According to Tan, UnrealMind is the largest entertainment content provider in Vietnam, and is among the top five in Malaysia and Indonesia. The company has joint ventures in Indonesia, Vietnam and Hong Kong.

"We consider ourselves as a regional rather than a local player," he said.

"We have moved beyond Malaysia. about 12% of our revenue now comes from overseas operations," he added.

For the half-year ended June 30, UnrealMind reported a net profit of RM1.5mil on turnover of RM6.8mil. Earnings per share were at 5.15sen.

And it has forecast a net profit of RM4.05mil on turnover of RM17.8mil for the full financial year ending Dec 31.

Tan said the company was currently in talks on two possible acquisitions to expand its presence in the region. It is also working on a tie-up with a global player to pave the way into the US and European markets.

In fact, raising fresh capital for regional expansion was the main reason UnrealMind floated its shares on the Mesdaq market in late June at an initial public offer price of 80 sen.

One month later, the company declared a one-for-one bonus share issue to enhance its liquidity in the stock market.

A shareholder who subscribed to 1,000 UnrealMind IPO shares would have gained RM50 as those shares had doubled in number and are now worth RM850 based on their last traded price of 42.5sen.