[Colin Gordon of U.S. budget publisher Valcon (Raiden Fighters Aces) talks in-depth to our own Brandon Sheffield, saying that the box art is the most important part of a budget game, and that the import space is 'crowded.']

Redmond, Washington-headquartered Valcon Games is a U.S. publisher of budget retail console games, from Wal-Mart impulse buys to Japanese imports like Raiden Fighters Aces to games with peripherals such as Easy Piano.

Co-founders Colin Gordon and Glen Halseth met while working for Kemco’s US division, which briefly localized content for the American market back in the early 2000s. Besides its retail focus, Valcon has also recently started releasing Xbox Live Arcade digital titles such as Polar Panic and Greed Corp.

Valcon COO Gordon is a longtime veteran of the industry, who started out programming computer games in Ireland, including Mario Bros. for the Spectrum. In this extensive interview, Gamasutra spoke with Gordon about the company’s future plans, the difficulty of assessing the value market, and the changing world of import games.

How did Valcon get started? And what's your own background?

Colin Gordon: I've been involved in video games since maybe 1984. I started a development company back in the UK, in Northern Ireland. We made Commodore 64, Sinclair Spectrum, and Amstrad games back in 8-bit days. I've since moved around, and I ended up in the U.S. working for a Japanese publisher called Kemco up in Seattle.

That's where I met my current business partner, a guy called Glen Halseth. Glen's also been involved in the games business but on the American side for quite some time. Glen's focused on the sales and marketing. We both worked at Kemco, and as things kind of transpired there, we decided that it was time to use our skills and set up our own publishing company. So, we created Valcon Games.

What exactly happened to Kemco?

CG: I think that the problem was...originally it was championed by a guy over in Japan that just really lost interest and passion in the whole games space.

The American division lasted longer than the Japanese one, right? No, I guess perhaps not because Kemco sort of still exists in Japan doing some mobile stuff.

CG: Yeah. But you gotta remember that a lot of Japanese companies aren't just single-faceted the way that most U.S. companies are. They're multi-faceted. So, Kemco is still strong in Japan. I mean, they've got steel manufacturing. They do retirement homes. They own a golf course. They've got all kinds of different things. And yeah, they're still involved with mobile gaming in Japan.

Valcon started in the 2000s, right?

CG: Yeah. We're five years old, soon. We started up in 2004. Maybe we're six years old. Doesn't time fly? Yeah, we started in 2004.

And you started pretty much doing budget oriented stuff.

CG: Yeah. At that time, obviously, you're looking at the market looking at what's going to work, what's the right approach. PlayStation 2 is a huge install base. There are a lot of opportunities. I'm very well connected into the European development/publishing communities. So, we're able to pick up quite a lot of titles from Europe and bring them into the U.S., publish them through our labels, and put them on the shelves.

Budget Challenges

For some people, budget publishing is actually somewhat of a harder area to get into because you... Well, you almost have to choose titles very carefully because you're going for a totally different demographic.

CG: Absolutely. One of the things I’m asked, and I meet with a lot of developers who present a lot of different products, is "what are you guys looking for?" And I tell everybody the same thing: "If you look at our lineup, you look at the box, and the box is what sells it. By looking at the picture on the front of the box, you've got to know everything that you need to know about that game to buy it."

So, the title is important. The image on the front of the box is important. Because everything you're trying to do is drive the customer to pick that off the shelf and read the back of the box. But if they look at the picture and they don't get it, or the title and they don't get it, then it doesn't drive them to life it off the shelf and find out more, and it never makes into the shopper's hands.

And also the profit margins are somewhat difficult because you're selling at a lower price to goods cost level.

CG: Yeah. To be honest, working on PlayStation 2 with Sony was, I guess you can say, the smart choice, because they gave us a lot more flexibility. The Sony model is really good for PlayStation 2, so yeah, we were able to work that for us. But you can't afford to make too many mistakes. You certainly can't afford to have a large overhead and have a huge stack. One of the things we've been really good at Valcon is getting maximum effort out of the folks who are there.

Did Sony at some point change its policy once the PS3 was announced to allow more budget stuff? Because in America they were previously totally against it.

CG: Yeah, that's still the case. I mean, yeah, they say it's a little bit more lax today, but to be honest, nobody wants PlayStation 2 anymore, so it really doesn't matter. That's my experience. And one of the things that did our company well, given my development background and kind of knowledge of working with Sony, is that we were able to look at titles and decide, "You know what? This is something Sony could approve," and then emphasize the areas of the game to make sure Sony really understood what was in the game and why they should approve it.

I know a lot of folks that have presented titles that didn't get approved, and that was a hurdle. We didn't have very many fails. We had a few, but the ones that we failed on, I didn't think we'd be approved on anyway, but we gave it a shot to see what would happen.

For a while, Capcom was distributing you guys, right?

CG: We did one distribution deal with Capcom. It was kind of an experiment to see how that worked, and it was okay. I mean, it was alright, I think. Everybody did okay on the deal at the end of it, but yeah, that was a one-off.

Success In Retail?

And now you’re funding some new games as well?

CG: Yeah. We've done little bits of that over the time, over the course of our life. We're a private company so we don't have access to a ton of VC and everything else, so everything we kind of do ourselves. We're very careful with what we work and what titles we do fund. We're doing some funding on some XBLA games. We've done some funding on a retail title. We're continuing to do that.

The Nintendo space, which you’re tackling with Easy Piano, is particularly interesting because, you know, they still have consoles where some of the best-selling games are, but they're just not the third-party games a lot of the time. Unless you're Square Enix or...

CG: No, you can count the successful companies on a Nintendo platform on a few fingers.

But they're some of the most successful games ever, though, because you're selling 10 million copies of something, and then it just keeps going.

CG: Yeah, but you know, I think back to Super NES days, that was mostly true then, too. You know, there were a half-dozen companies that performed really well on the SNES and even the NES. Nintendo always had the lion's share.

In the budget space it seems like it's all about being at the right place at the right time. It's very difficult to know... How do you identify what the opportunities are now because, you know, the digital space is obviously good for a smaller publisher, and retail is difficult. But you're still tackling retail, so how do you know what to do?

CG: You know what? That's the $64,000 question, right? At the end of the day, you're trying to sell to a consumer who wants value for money. And they want something that will entertain them, that isn't too complicated, that's not over-engineered, and that doesn't require them to spend 30 hours to finish it.

You can kind of, you know, get a game, play it, and enjoy it. You know, and they're not spending a lot of money on us. They don't expect it to last them from week to week to week. You're looking for something that's... They look at the box, they know what the game is. It's not like they have to delve into it. It's still hard to find those things. It really is. Mainly because developers seem to like games that other developers make.

Yeah. Or that they want to play perhaps.

CG: Yeah. Or they think they want to play. Because I think after three or four months of developing a game, you're fed up with it. You don't want to ever play it ever again.

Fair enough!

CG: Yeah. It's tough. It's definitely tough. And it's a crowded space. There are a lot of titles out there.

The Import Market

With Raiden Fighters Aces, you've been bringing some Japanese titles to the West. How is doing that nowadays? It seems like it's different than it used to be.

CG: We did that on PlayStation 2 as well. We brought a couple Japanese games over on PlayStation 2. They maybe weren't as successful as we'd liked them to be. Raiden Fighters has done okay for us. Yeah, I'm looking at Japanese content at the moment to bring over. Some of the stuff is just too strange for the U.S. market. We're looking between the cracks as it were because the mainstream publishers are picking up all the high-end easy ones. So, we really see some oddball games, and some of them just aren't appropriate.

Well, the industry has changed a lot over there in the last 10 years or so. Or perhaps has not changed with the changes that have happened.

CG: Well, I was going to say for them, I think the explosion in mobile gaming has really made a difference to their consumer base. But yeah, it seems the Japanese haven't embraced online as much as everyone else.

It's unfortunate to see a lot of the kinds of titles that I'm interested in from there to not sell too well because I want them to continue coming out.

CG: For me, the most disappointing title personally was when we brought over Daisenryaku from Japan from SystemSoft Alpha. A hardcore strategy game. I was kind of hoping that at a low price point... Yeah, I knew it wasn't mass-market. I knew it didn't fit any of the rules that we were trying to set up. But I just hoped that maybe we could create a little bit of demand for it, and people would dig in, and there would be more of an interest in that kind of thing going forward. But it didn't work. Because that's my kind of game. That's the kind of game I enjoy to playing.

Well, I mean, if you wanted an edge, you could have gone for Moe Moe Niji Taisen. Are you familiar with that?

CG: Oh, yes. Yes. That's the one where the girls are like airplanes and tanks. Yeah, I played that recently. And I looked at that and I thought, "Hmmm..." [laughs]

To me, that's the one that you get Kotaku talking about... I don't know if that translates to sales, but a lot of people would talk about it.

CG: But I don't know if they'd talk about it in a serious way. I honestly, yes, I have a playable back in the office. I've played it, I sat and I looked at it, and I thought, "God. I just don't know."

It's hard to know.

CG: But the other problem is you got to take that... Because you got to remember, right, it's one thing to publish the game; you then got to get the buyer to buy it. If you go in and say, "We got this game where these girls are kind of half-robots, half-planes, half-sexy girls, and they kind of fight in this kind of turn-based strategy game," they look at you like, "Really?"

You’d have to sell it to the hardcore market rather than to the budget casual market.

CG: Right. Right. But as I said, that's completely outside of our normal space, and then the numbers. And yeah, Raiden is another classic example.

I bought it. A friend of mine bought three.

CG: We really thought, "Should we sell it at 40 bucks?" Because our people going to buy it. I think it ended up... I think it was $19.99? 29.99, I think, when it first came out. But are you going to sell that less at $40?

Probably not.

CG: So, we gave up money, but we were trying desperately to sell enough. If we do it at $30, then more people are going to buy it, we thought. But yeah, I think we probably could've sold it almost the same at $40.

It's always a battle. It depends on which title you’re going for because then sometimes some people sell a hardcore Japanese RPG for 50 bucks because they'll feel like the hardcore fans are going to be the only people who buy this. But people don't know this brand, so they actually just wind up not getting it. That happens sometimes, too...

CG: And that was the whole discussion we had internally on Raiden.

And how is it in the Japanese localization space competing against... Atlus is extremely aggressive now, and Aksys is getting more resources.

CG: It's a challenge. The great saying is if it was easy, everybody would do it. It's really about relationships. I mean, we've got some good relationships, and I think, you know, we're pretty honest with the folks we work with. Yeah. It's just leveraging relationships.

And where do you see Valcon going forward in the next five years?

CG: I think we're going to continue to explore the lower-priced space. I think PS3 is going to be an important platform for us. I think we'll continue to support 360. We'll continue to support... I really want to explore XBLA, and I want to explore PSN more, and kind of see what those markets can achieve. Take a look at some iPhone and iPad stuff. But once again, everybody else is doing that, so maybe that's not such a smart idea. Yeah, I mean, I think we'll... As dull as it is, more of the same probably...