Makeover magic

  • Game on
    Game on: Joomin Lee shares a good rapport with cafe owners.
  • Simon D'Souza at his cybercafe in Navi Mumbai | Janak Bhat

A South Korean is breathing new life into cybercafes with his gaming company

You are not a gamer,” said Joomin Lee, correctly, the moment we shook hands. “If you were a gamer, you wouldn't have become a reporter. In India, people think that gamers are spoilt people, that they are addicts.”

It was this perception Lee had to fight against when he was flown down from South Korea in 2003 to head the gaming division of Sify. He would have preferred a more vibrant market, but the businessman in him saw the potential of the untapped market. The competence of Indian engineers and the plethora of myths and legends, which could lend themselves to games, convinced him that he was in the right place.

Lee launched Funizen, an online gaming company, in 2007. His entire team at Sify followed him. “Gaming is a creative business,” he said. “We are trying to change the concept of entertainment through games.” To achieve that, Lee came up with an ingenious idea—make use of India's extensive network of cybercafes. It was a win-win situation, as cyber cafes were facing extinction owing to the smartphone revolution and desperately needed a reinvention. “An association member [a cybercafe owner] came to our office and said, 'In the last ten years, price of everything has gone up, except for browsing fee.' Ten years ago, the browsing fee was Rs 20-25 an hour. It is the same today,” Lee said.

Funizen approached cybercafe owners and provided hardware upgrade to transform them into gaming cafes. It also reached out to hardware suppliers, who made the upgrades at a minimal cost. Then it supplied games to the cafes, which could be played through the portal, and installed a cafe management solution in each cafe, which made it easier for the owners to keep track of the money.

Lee said the cafe owners initially resisted the idea, but the company's confidence-building measures won them over. “As a joke, I used to say that before we start our business, we have to go to the cafes three months in advance and start cleaning the monitors and the mouse pads and be their friends. To a cafe owner, each PC is very important. If we had gone to them without this kind of ice-breaking and just given a PowerPoint presentation, they would have never listened,” he said.

Lee and his team realised that another reason India did not have a large online gaming market was the low penetration of credit cards, which was needed to make payments while a player advanced to new levels and paid-only features. To deal with this, they came up with the concept of the electronic pin, which works like a password for gaining access to paid-only features. A gamer can pay the cafe by cash and the cafe manager can complete the transaction by generating an e-pin through his account.

The transition has worked well for cybercafe owners. Yogesh Nagdev, who owns Plugin, a gaming cafe in Vashi, Navi Mumbai, said his revenue rose by 15 per cent after he had tied up with Funizen. Simon D'Souza, 31, owner of Vertigo in CBD Belapur, Navi Mumbai, recently converted it to a gaming zone. “The footfalls have increased because this industry works in a localised manner and spreads by word of mouth. My sales have increased and people from Nerul, Kharghar and Vashi came here for a purchase and then turned regulars,” he said.

Funizen has tied up with 2,300 cafes in seven cities, and is working on upgrading 800 others. It has received two rounds of funding—Rs2 crore seed money from a venture capital firm in Korea and then $2 million from a venture capital firm in California last November. It is aiming for monthly sales of Rs1 crore by 2016.

Funizen's clientele and target customers are more or less niche, and it uses events like ComicCon and gaming tournaments to reach out to them. It has launched a tournament on its own. “Last August, we held a championship. We conducted preliminary rounds through the cafe network and selected the top three or four teams from each city, and the final round was held among 16 teams in Bengaluru. Some 240 teams participated. The champions took home 01.8 lakh,” said Praveen Kumar J., Funizen's head of sales. He was quick to add that the cafes remained the most important link in the chain for the company.

But, aren't people increasingly moving to their smartphones for all forms of recreation, including gaming? Lee said Funizen had factored that in and was targeting the home gamer through “Kids always look for options. They prefer to go out and play with their friends,” said Kumar. Funizen is betting on this spirit of togetherness.

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The Week

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