Founded in 1994, the German-based Koch Media created a thriving publishing business with partners long before it started its own Deep Silver brand. It is the European entity of the two brands, focused on the distribution of games and films. The company does a great deal of partner business, distributing games (mostly as retail discs) produced by renowned publishers such as Square Enix, Sega, Bethesda Softworks, Codemasters and more across certain territories. The physical retail market is still a thriving one, particularly in parts of Europe, where many countries have bandwidth caps on home internet usage.
At the same time, Deep Silver is the company’s publishing brand, famous for releasing games such as the Saints Row series, Dead Island and Homefront. Agents of Mayhem, which is being developed by the Saints Row creators, is expected to launch later this year. Additionally, the publisher licenses products from partners and publishes them under the Deep Silver brand globally. For example, the upcoming role-playing game (RPG) Kingdom Come: Deliverance is one of its key titles for 2017 alongside many others.
“We have grown from humble beginnings 23 years ago, to a company that currently employs more than 800 people,” Klemens Kundratitz, CEO and co-founder of Koch Media and Deep Silver, told [a]listdaily. “About half of our staff is in development and the other half is in publishing. That shows you that our strategy is built on three pillars. One is the development of our own Deep Silver products and publishing them globally. Second is the partner business, where we adopt different roles for different partners in different parts of the world, depending on their requirements. The third pillar, which is the smallest, is the film business that we conduct in certain European territories. Overall, for an independent globally operated company, we believe that the combination of development and publishing with a very substantial partner business is the right strategy for growth.”
Kundratitz then discussed how the company’s strategy of publishing both partner games and internally developed ones has kept the company stable and growing for over 20 years.
What convinced the company to create two separate brand names?
We believe that, in order to be relevant to our global partners, it is good to have a broad portfolio of products. The difficulty for many publishers these days is that they have two or three games per year. That is independent of the size of the publisher. Very big companies have two or three products a year along with medium or small ones.
There are these large gaps between games, and in order to be effective as a sales or marketing organization, it’s good to have a continuous flow of products. Relevance can be achieved by mixing our own products with partner products. This is a gap in the market that we have detected and now we are a clear leader. Certainly, we are the number one publishing partner in Europe. Being partnered with so many companies is a testament to our leadership as a company, which is able to solve the problem global publishers have with gaps between their big releases.
How does publishing and promoting a game in Europe compare to the US?
You have to see that Europe is not just one country—we are dealing with many languages and cultures. To be effective in Europe, you have to have a local presence in the key markets.
This is why we operate with nine regional publishing offices in all of Europe. Not only do we need to localize all assets and messaging, we also have to culturally adapt our messaging and publishing to the individual European cultural region. You really have to go the long route and be present. That’s why we have a large footprint with both the sales and marketing and PR side to get the maximum impact.
What has contributed to the success of the partner business?
We’ve been doing the partner business for 20 years now, and it’s very stable. We’ve built ourselves a name for being a very diligent operator that’s trustworthy and able to work under the direction of the primary IP holder. Not every company is built around that. We take on different sets of responsibilities. We are quite unique with what we’re doing.
This is migrating from a hybrid business, dominated by physical, to eventually being one dominated by digital, but there will still be a strong physical part of it. Koch Media in Europe acts as a consolidator for the physical business. It becomes attractive for publishers, as they focus their own resources toward the digital side, to have a reliable partner to manage the substantial physical business.
Are digital and physical game releases two different worlds?
It is clearly one game, and so it’s one success. If you’re successful in one side of the business, you are usually successful in the other. There are pros and cons to buying a product digitally or physically. Some of the players like to buy digitally because it’s convenient, but there is also another very large part of our player base that likes to go into the store to pick up a product with the option to trade it in later. It’s a hybrid business that we operate in as an industry, and it’s going to be that way for the next ten years, I’m sure.
Although they operate separately, does success with publishing partner games help to strengthen the Deep Silver brand?
Yes, I think the two things help each other because we are one of the top five vendors in most of the European territories. Each of our products in the lineup will benefit our relevance in the market. That is the case for both partner products and our own products. Also, by being connected to these leading publishers, we are learning a lot from them and they from us for the best ways to bring products to market. Combining those two elements of the business is beneficial for both our own and partner products.
How would you describe the Deep Silver brand?
Deep Silver is, first and foremost, a label which is focused on games for gamers. We do not engage in casual or non-gamer activities. We look for quality products that have a worldwide audience rather than just a local audience. As you can see, we are quite at home in the action open world shooter genre, but also RPGs, which we consider to be at the core of Deep Silver.
We also handle products from partners under the Deep Silver brand. For example, Atlus chose us as its publisher in Europe and outside the Americas both digitally and physically. Persona 5 is a product we are about to launch in Europe, simultaneously with the US launch. That’s launching under the Deep Silver brand, but it is very clear that this is purely a publishing arrangement, while Saints Row is our own IP.
Has partner publishing allowed Deep Silver to take risks with developing new IP such as Agents of Mayhem?
Agents of Mayhem is a major project for us, in so far as we’re talking about a new AAA game IP. It’s first and foremost a Volition game with all the elements you expect from the studio. [It features] the over-the-top action, tone and ludicrous type of gameplay we know from Saints Row, but applied in a new way in a new IP. That’s a very bold and ambitious project, and we’re doing it because we believe that gamers are sick of sequels. We as a publisher have to be mindful of people wanting something fresh, new and exciting. Doing that requires a new IP. We have the full weight of the company behind the project, and I can tell you it’s going to be a very exciting launch this year.