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Grace Chng

The Straits Times

Publication Date : 28-01-2013

Denmark's Unity Technologies, whose game engine is used by about half of the world's mobile software developers to build 3-D games, believes Asia is a game changer.

Recognising rapid growth in the number of game users in the region, it is shifting its global finance division from the United States to Singapore when it opens its Asian headquarters here in the middle of this year.

Chief financial officer Henrik Nielsen will relocate here soon. The office will have about four people to push its business in Asia which is doubling every year, said its co-founder and chief executive David Hegalson, here last week as part of a two-week visit to Asia.

"Two years ago, Asian revenue was only a rounding error on our spreadsheet. Today, Asia accounts for about 40 per cent of total revenue. This year or next, it will cross 50 per cent," said Mr Hegalson, who was visiting Singapore for the first time. While the company is profitable, he declined to reveal Unity's revenue.

To provide more technical support for Asia, Unity is considering building an engineering team here too. Said Hegalson: "Singapore is strategic, not only for the tax incentives we will receive when we open our Asian headquarters here, but also for the availability of engineers and people who can speak Asian languages."

Singapore will be its 17th office. It employs about 240 people in 16 offices in 14 countries. The biggest office is in Copenhagen, which has one-third the staff.

Unity, also based in San Francisco, California, had initially focused on the US and European markets. But executives attending regional game conferences over the last two years discovered there were many Asian users of its software and others who were interested. The firm had also received e-mail messages "in Asian languages we didn't understand".

It could see there was demand for local language support, and opened an office in Japan in 2011, as it was a mature game market and the easiest point of entry for the company. Offices in Seoul and Beijing followed.

While Asia offers exponential growth, software piracy is a major challenge. In China, which is racking up over 100 per cent growth a year, many game developers use pirated Unity software.

Instead of taking legal action, Unity is building relationships with them, providing support and gradually convincing them to switch to genuine products.

Started 10 years ago in Denmark, the firm has raised about US$17.5million in two fund-raising rounds. The last round in 2011 was led by Singapore-based venture capital firm iGlobe Partners.

According to a survey last year by Game Developer magazine, Unity software topped the list of mobile game engines, with 53.1 per cent of developers using it.

Worldwide, it has about 1.3 million registered game developers with about 400,000 active monthly users using it to build games for mobile phones, computers and game consoles.

Game publishers using Unity include Disney, Electronic Arts and Ubisoft. But its software can also be used to create simulations for training as well as by architects for design visualisation. About 30 per cent of revenue comes from industries such as education, military and architecture. ST Electronics, the US Army, Nasa, Lego and Coca-Cola are among its users outside the game industry.

Its revenue comes from each US$1,500 sale of the professional version of the software. An entry- level version goes for free.

"We started as a game developer but our games weren't successful. We decided that the software we developed to create 3-D games could be used by others."

Originally its entry-level software was US$200. But when it raised its first round of funding, it had enough money in the bank to let developers download it for free to increase its base of users.

But the firm's biggest break came in 2007, with the launch of Apple's iPhone. "We were developing on Apple Mac computers when everyone else was on PCs. But this disadvantage turned out to be our winning hand.

"When the iPhone came out, we knew instinctively that the mobile would change everything. Then, Apple's App Store opened in 2008; we knew that it was an opportunity for us. Apps would be an emerging industry and we could sell iPhone software."

It released a Unity app for iOS mobile game developers. It caught the market at the right time, as the rest of the gaming industry was still focused on console gaming. To date, Unity also supports developers building games for Android, Web and consoles such as Wii, Xbox 360 and PlayStation 3.

Top mobile games will net over US$200 million this year, he reckons.

"In 2010, the top mobile game, Infinity Blade, garnered only US$12million. Last year, top games made between US$50 million and US$100 million each. Mobile will continue to grow exponentially. We'll continue to add new features and make our software easier to use to support developers."