Riding online gaming growth, CIB heads for ACE listing
Online gaming group CIB expects revenue to grow by about 50 per cent this year thanks to growing demand.
The CIB group, which is expected to list on the ACE market by August via a reverse takeover of Hdm-Carlaw Corporation Berhad, is forecasting a compound annual growth rate of 30 per cent over the next three years. The listed entity will be CIB Interactive which is the holding company of CIB Development Sdn Bhd and CIB Net Station Sdn Bhd.
The group had a gross revenue of RM13.7 million last year and expects it to increase to between RM18 and RM19 million this year with no less than RM4.5 million in profit giving it a net margin of about 30 per cent.
The company says it has a growing customer base which currently stands at 5 million subscribers and is adding as many as 50,000 to 60,000 casual gamers a month.
Founded in 2003 by Alan Ku, CIB carries about ten online game titles, such as shooting and dancing games, that are free to play and it makes money from virtual items that gamers purchase in order to make themselves more competitive.
The average user spends RM75 a month purchasing virtual items but the items can be as cheap as 5 sen.
“For the shooting game, as little as RM3 can make you fully equipped for 3 days including grenades, armour and boots,” said Ku.
Subscribers buy the items via prepaid top-up cards and CIB has several points of sale channels including 7-11 outlets, cybercafés, bookstores and it expects to expand to petrol stations, credit card sales as well as online payment portal Paypal.
Ku feels confident that CIB will be able to stay ahead of competitors as the start up cost can be high and landing compelling titles is not easy.
“Royalty and licensing is the main expense and it can be a barrier to entry,” said Ku. “Big game publishers want to see how well you are doing first before giving you the license for their games.”
Ku says that CIB eventually hopes to tap the South East Asian online gaming market which he estimates to be worth RM1.2 billion.
Games currently carried by CIB include Crazy Shooter Online and Super Dancer Online which has some 800,000 subscribers. The games are currently licensed from foreign game publishers, mostly in China.
Ku also wants to CIB to move into developing its own games and may tap into government content development funds to do so.
“We already have experience from localising the games that we licensed,” said Ku.
Income diversification strategies that CIB is looking at include advertising.
“We have a huge pool of followers and it is a big customer database,” said Ku.
Source From The Malaysian Insider
June 16, 2010 [Wednesday]