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Tuesday, June 28, 2022

​GameFounders Expansion To Asia

In 2012 we launched the first games accelerator in Europe, GameFounders, and in 2015 it became the first to expand to Asia. Why on earth you ask? What spurred this course of action and what was awaiting the accelerator in Asia?

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This guest post is written by Kadri Ugand, co-founder of GameFounders gaming accelerator.

When launching the accelerator we thought that the game industry is big in Finland and Sweden, making their small neighbour Estonia the perfect place to situate the accelerator. It provides easy access to a lot of quality mentors and events, while at the same time offering low living costs for the young studios. During the 2 years of operations in Estonia we made a total of 28 investments in teams from 16 countries ranging from Argentina to China.

Already after the first year in Estonia it was clear that the model was working — applications were pouring in and the mentor network had grown to over 100 top executives from Europe and US. It was high time for us to consider our future.

Looking around in the world, the next destination became clear pretty fast — the Asian region is the one with the booming markets and some of the highest amounts spent by single players. We looked at our own operations:

  • Teams from Asia submitted a lot less applications since Estonia was too exotic for them and too far away to move to for even 3 months. At the same time visiting trade shows showed good technical skills of the talent from Asia.
  • Although the world is open and well connected, there is still a clear regional division in gaming industry and not many western companies deal with the Asian market and vice versa. Mingling in one side of this semi-closed system made it difficult to help teams that want to expand to Asia.
  • Locating only in Europe made our mentor network more west-heavy and we wanted to find a way to expand this.
  • The South East Asia gaming market is projected to grow 30% during the next 4 years. When we compared it to the global growth rate at 7%, it was obvious that an increasing number of investors and developers are looking at the region. Being in Asia during a time like this will help studios, investors, as well as mentors, to find out more about the region and its opportunities.

Tallinn suburb of Lasnamäe

So all the arrows were pointing to Asia…

We started looking for partners in the Asian countries and talked to a number of governments, agencies and developers before finding Malaysia and its Multimedia Development Agency (MDeC). As the accelerator has a huge effect on the industry of the country, it is important to choose the next location based on a strong local partner. The main thing other governments were struggling with is the international teams we would be bringing in instead of working only with local talent. The trick is to see the value foreign talent brings into any country.

When we met, MDeC had just chosen games industry as a priority sector. Since they had already planned a number of different activities around activating the games market, adding an accelerator to the equation made total sense. From then on the goal was clear.

Water park in Malaysia

We started to set up in Malaysia 6 months before the launch of the first programme. After being spoiled by the e-government of Estonia with registering companies and opening bank accounts in 10 minutes, the business setup in Asia had a few extra twists. There are a few more forms to fill, papers to sign and offices to visit before reaching the desired goals. One of the funniest/absurd experiences was hearing that online banking access has to be ordered from head office of the bank and it takes at least 2 weeks to arrive. When it finally came, it only allowed us to see the balance, you need to apply again to make payments.

All this is something to be prepared for when expanding to any foreign country, but it is all compensated by the energy, enthusiasm and of course the climate. The general startup scene and energy is high in Asia — there are more financing opportunities, more big corporations for the talent to get experience in and better access to partners that have their representative offices in the region. Also more people to take advantage of these opportunities of course. There are also cultural aspects of doing business one has to be aware of. Sometimes a polite “yes” is really a “no”, sometimes employees need their parents’ approval to take a job and sometimes you need to be aware of people’s religious habits.

In fall 2015 we ran one cohort in Malaysia already, which included 10 teams from 6 different countries and an extra LITE program for Malaysian companies to prepare them for the next year’s submissions. During that time 78 mentors were involved in the program out of which 50 visited Kuala Lumpur. The local talent and living conditions combined with the low cost received positive feedback and some of them are already considering opening a studio in Malaysia.

Looking back at the programs in Europe and Asia, there is really not that much difference. The setup is easier in Estonia, the everyday life is happier in Malaysia, our friends feel welcome in both places.

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