Generation start-up: Tamatem founders see Arabic games market as ripe for expansion
Hussam Hammo is as confident about the prospects for his games publishing business, Tamatem, as any start-up founder.
“We’re looking at doubling, and tripling, the size of the company. If we are 55 employees today, we want to reach 100 by the end of the year,” he tells The National over a videoconferencing interview from his home in the Jordanian capital of Amman.
However, he also admits being more careful with the cash provided to him by investors – the company has raised $6 million (Dh22m) so far through two significant funding rounds – than many of his competitors.
“I hold on to money that investors give, because I saw it before and I don’t want that repeated,” he says. “A lot of investors say ‘go crazy, do what you want to do and money will come’. Then they do all of these things and the money doesn’t come. And they will be starving.”
Tamatem, which means tomatoes in Arabic, is Mr Hammo’s third venture so far, despite being only 37 years old.
His first, faye3.com, was started in 2006, a year after he graduated with a computer science degree from Princess Sumaya University in Jordan, alongside Sohaib Thiab. It was sold to the founders of Maktoob by 2007. The pair’s second, a games development company started in 2009, had to be wound down in 2012 due to a lack of funding.
“That was a very devastating time for me because I thought that I had my share of success and we did not see failure coming. And we come from a culture, the Arabic culture, where it’s very difficult to accept failure. It’s similar to the Japanese culture in that if you fail, you are doomed. No one will believe in you any more,” he says.
Those earlier ventures taught him valuable lessons, though. With faye3.com, it was patience. The site, one of the first Arabic social networks, was a natural fit with Arabic e-mail provider Maktoob and the pair continued to work in the company for another two years and nine months before deciding they would rather go off and start a games company.
But had they stuck around another three months, they would have earned Maktoob shares that would have made them very wealthy a few months later when the business was bought by US internet company Yahoo! for $164m.
“Maybe we lost a million dollars in the process. Imagine you are 25, 26 years old. That’s a significant amount of money. Especially as we started our company in the middle of a crisis,” he says.“No one was investing.”
He also identifies mistakes he and Mr Thiab made at the second business, a games development company called Wizards Productions, which he now puts down to a “lack of maturity”.
These include not being thorough enough in market research and using an engine to develop games that is now widespread but at the time was too technologically advanced to run on some devices.
Attracting funding when starting Tamatem off the back of this failure was tough, he said.
“Every time I talked to an investor, they would tell me ‘Hussam, you succeeded one time [and] failed another – go and find yourself a job. You are 30 years old and most people at your age now are accomplished.”
Eventually, he raised money through 500StartUps in Silicon Valley in 2013, before gaining $2.5m in a 2018 Series A funding round led by Wamda Capital and another $3.5m in follow-on funding in February this year.
Tamatem localises content from games that have been successful elsewhere in the world, but to do this it needed to build its own games first as proof of concept.
Mr Hammo signed his first deal with a games developer in 2016. He now focuses solely on publishing, working with mobile games creators such as NokNok and Tamalaki to develop titles for smartphones. The offerings are typically free to download but require users to pay to unlock new levels, characters and other rewards.
The localisation not only involves changing the language to Arabic, it also makes sure games are culturally appropriate.
Although gamers in the Arab world will often encounter these in games developed by western companies, if something is specifically geared towards an Arabic audience these need to be addressed, he says.
“It’s very similar to watching a movie in the cinema. From a Hollywood movie, no one cares. But if you are an Arabic producer, producing the content yourself … you need to be careful about the perception.”
The company’s other significant selling points are its active community engagement and the wealth of insight it has into the region’s gamers.
For instance, he says users of popular games worldwide can report a fault with a game and the company responsible will generally have a policy of replying within 48 hours.
“Our team has a target that they need to reply within 20 to 25 minutes. Because otherwise we will lose a player. We are a very customer-centric company.”
The gaming industry worldwide is now about the same size as the movies industry and the music industry combined.
A Global Games Market Report from consultancy Newzoo forecast industry revenue of about $159.3 billion this year, which will be a 9.3 per cent year-on-year increase.
Arabic games account for just 2 per cent of this, Mr Hammo says, despite it being the sixth-most commonly spoken language worldwide.
“Yet, if you capture the right audience, you can make so much money from a very concentrated pool of players,” he says.
It is one of the fastest-growing markets globally, with more than 300 million smartphone users who want to consume content in Arabic.
“But the most important part is countries like Saudi Arabia have the highest average revenue per paying user in the entire world. It is seven to eight times higher than China, and three times higher than the US,” he says.
The company works with developer partners from all over the world on a straightforward revenue-sharing basis.
Data plays a key role in the games it chooses and analysts form the biggest group of company employees. Playability is also considered, but given a much lower weighting as it is more subjective.
Test campaigns are run among different focus groups in various countries, with results driven by return on investment.
Tamatem currently has a stable of five games including popular card game VIP Baloot and role-playing game Bandar’s Farm, with five more in the pipeline. Deals have been signed and localisation of content is under way.
“We hope to sign another five games by the end of the year,” Mr Hammo says.
“I won’t deny that it is very challenging to find the right games, but it’s a momentum-based business. Every time we sign a new deal, it makes the deal after easier.”
And although some of the global gaming giants take on the Arabic market themselves, he says that Tamatem can help any company earn more.
“If we launch that game, we will make 10x more from that title. So although that developer is sharing revenue with us … they will find the revenue share they will take is much higher.”
Q&A with Hussam Hammo, founder and chief executive of Tamatem
Which other successful start-up do you wish you had started?
I would say something that really had an effect on people’s daily lives, that solved a major problem for users – like, for example, Careem [or] food-ordering apps such as Talabat.
What new skills have you learnt since launching your business?
Sharing. When I started my previous company, the culture here with the investors was everything should be a secret. You would never tell people your valuation, who your investors were, how much revenue you were making, how many employees you had. When I went to Silicon Valley to 500Startups, the first thing they did was tell me to stand up and say who my investors were. Sharing information opens up horizons.
Where do you want to be in five years?
We want to be a leading games publisher in emerging markets. So we want to expand beyond the Arabic market. We have one of our investors based in South-East Asia and we are looking into franchising Tamatem into that part of the world and providing culturally relevant content into Indonesia, Malaysia, Thailand and Vietnam.
If you could do it all differently, what would you change?
I would be faster and bolder with my decisions. When I started, everything took too long because I was getting myself more comfortable with every decision we needed to take. Even hiring people and changing the people who were not optimal.
If I do it all again, I think we would have achieved the results today maybe two or three years earlier.
Article By Michael Fahy