Gilles Langourieux, CEO of Virtuos
This Means Business is a new series by the e27 Content team that aims to showcase how startups in Southeast Asia (SEA) are making their revenue, with the hope of providing insights and lessons for their peers. If you would like to participate in this series, please reach out to writers@e27.co.
Earlier in March, game developer company Virtuos announced the launch of Glass Egg – a Virtuos Studio, its 2D and 3D art production studio in Dalat, Vietnam. This announcement followed an acquisition by the company in May 2022, marking the opening of its second studio in the country.
This is a part of Virtuos’s journey to becoming the largest game developer in Vietnam with 1,500 employees by the end of 2024.
To get an understanding of how Virtuos aims to reach its goals, e27 gets connected to the company to talk about its revenue model–a crucial part of any company’s journey to becoming sustainable and stronger in this day of age. In an email interview, Virtuos CEO Gilles Langourieux explains the business model that the company is implementing.
“The core of Virtuos’ business as an external developer is providing high-quality game production services across all platforms — PC, console, and mobile — and disciplines to video game developers and publishers. Our ability to scale production capacity (with over 3,700 full-time employees) and manage projects (with know-how from having worked on over 1,500 game titles) allows us to deliver greater cost efficiency and facilitate shorter time-to-market for our clients,” he says.
“What we bring to clients is especially valuable in a market where demand for content and a desire for player engagement has seen an exponential increase.”
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The following is an edited excerpt of the conversation:
Does the co-development industry generally follow the model that you are implementing, or did Virtuos go through a process before arriving at the most optimal one for itself? Could you share what that experience was like?
Virtuos provides an end-to-end service model, which means we support clients across every function of game production, creating greater efficiency in the process. Other service providers may specialise in a discipline (such as asset production) or a platform (such as PC). The games industry is dynamic and shifts with player demands, but co-development is fundamentally about accelerating game creation with the best team to deliver high-quality games.
In 2004, I founded Virtuos in China as I saw the opportunity to help game companies make bigger games for the new generation of consoles (PlayStation 3 and Xbox360) then while maintaining operational efficiency. As an external developer, Virtuos provides a global talent pool of artists and engineers to help our partners achieve greater flexibility in production capacities and on large projects. This approach is scalable and also less risky than the traditional game creation model, which is driven by hits. It is also an approach that has worked exceptionally well for us, as evidenced by our consistent growth year-on-year.
Let us talk about the clients that you are working with, i.e. publishers. How do they differ here in SEA and elsewhere, and how do the business model and strategy manage that difference?
We see two main categories of clients at the moment: the bullish and the conservative. For bullish clients, the value Virtuos brings lies in our end-to-end solutions that enables them to create content and ship games on as many platforms as possible. For conservative clients, we help manage risks by introducing flexibility in resourcing and increasing ROI with effective game development solutions.
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SEA is a region of vastly disparate cultures, regulatory requirements, levels of tech adoption, and economic development. Its markets, however, share some attributes, most prominently their young and digital-savvy populations, which explains why the region is home to some of the world’s fastest-growing digital economies.
Younger players drive demand for localised content, changes in media consumption, and in-game spending, all of which affect how video games are produced.
With a large proportion of our workforce based in Vietnam and Malaysia, our proximity and understanding of the nuances of local markets enable us to effectively support our clients and address market needs, while our global network of studios provides the kind of cross-pollination that enables the expansion of blockbuster games.
What are some significant differences in the markets you’re operating in?
Asian markets tend to be more focused on mobile platforms and the free-to-play content model while Western markets and, to a certain extent, Japan, still rely on larger PC and console games.
What is the toughest business challenge Virtuos has faced in entering this region, and how did it manage to resolve it?
As SEA has very dynamic economies, employees are presented with a multitude of opportunities to grow, making retention of employees challenging at times.
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Having said that, we strive to be the best employers in the region, providing excellent training, a conducive work environment for creativity and growth and sustained long-term career development. This seems to resonate with our global talents, as evidenced by our Glassdoor rating and multiple ‘best workplace’ awards over the years, including, most recently, a Great Place To Work® certification and an HR Asia Best Companies to Work for in Asia Award for – Sparx* – a Virtuos Studio in Vietnam.
What are some other opportunities Virtuos has identified in the region and APAC as a whole? How does Virtuos plan to seize them?
SEA is one of the fastest-growing e-sports markets in the world and in turn, there is a significant demand for live service games such as Call of Duty and League of Legends — essentially games that are continuously updated with new content to keep players engaged. Virtuos is uniquely positioned to support clients with the ideation and creation of suitably localised content to help them remain top of mind in a saturated and fast-paced market while delivering a more effective monetisation model.
The mobile-first population in SEA also drives the global trend of cross-platform gaming. Having adapted multiple AAA games such as Medal of Honor: Above and Beyond (from Oculus Rift to Quest 2) and Dying Light: Platinum Edition (PC to Nintendo Switch), we are well-positioned to help game creators bring their titles to more platforms and expand their audiences.
Specifically relating to its revenue and business model, what are some of Virtuos’ plans this year? Do you have specific targets to achieve?
Despite talk of a global recession and a slump in global gaming, we aim to beat the pessimism by putting innovative solutions front and centre with the goal of continued growth for our clients, business and teams.
This year, we also have plans to further expand our global footprint through the launch of new studios and acquisitions in at least two new countries, underpinning our commitment to continuously support our clients through a global network of high-quality game production service providers.
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Image Credit: Virtuos
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