Chris van der Kuyl has been knocking up the Air Miles. And while he could have his head in the clouds over his lucrative partnership with the world’s most successful computer games franchise of the moment – he’s remarkably down to earth. He has just returned from Seattle, where he was in meetings with Microsoft, and then spent the day in Kilwinning. He’s also been to East Linton and home to Dundee.
He’s back for a week with his children for the mid-term break, then off again to San Francisco for a games development conference. We meet in the bustling SAS Radisson in Argyle Street in Glasgow before he heads off to an Entrepreneurial Scotland meeting. There’s hardly time for breath, never mind a coffee.
“The main thing for me at the moment is leading 4J Studios. We’ve had the most incredible few years. It’s all down to the relationship we kicked off with the guys at Mojang in Sweden who invested in Minecraft. We are in the fortunate position to be able to take Minecraft over onto games consoles, which are Playstation and Xbox.”
Minecraft was bought by Microsoft for $2.5bn. The game has been out on games consoles for three years and is a phenomenon. It’s a fantasy digital lego-type world where the players build the landscapes and environment with billions of pixelated cube blocks.
“Minecraft has become one of the most successful games of all time. The Microsoft deal is pretty interesting and the good news for us is they have committed to us. We are long-term partners for the development of all the console versions. It has been amazing and a total game-changer for us.”
Chris and his 4J Studios team (it stands for Dundee’s ‘jute, jam and journalism’ monicker and adds ‘joy sticks’) went to Stockholm four years ago to meet the Minecraft inventors.
The Dundee – and East Linton – company had arisen from the ashes of VIS Entertainment, which Chris set up in 1996, producing the likes of the best-selling game State of Emergency. 4J Studios are just one of Dundee’s hot games businesses, with the likes of Tag Games, who work on mobile platforms, recently announcing a doubling of its workforce.
“It was Microsoft Studios, the video game production wing of Microsoft, that set the deal up. We had been successfully delivering a whole range of products for them and they desperately wanted Minecraft on Xbox 360,” says Chris.
Mojang had spoken to some local Swedish developers but found they were not up to the task. They phoned Microsoft Studios who recommended the Dundee operation.
“The guys in Sweden said, ‘We don’t need money, but we’d love to see it happen too – but we’ve no idea how to make an Xbox game.’ We said, ‘Let us do it for you.’” And it happened. At the time Minecraft had sold about one million copies for the PC.
“It was a hugely successful indie game, and nobody knew how successful it would be
on games consoles.”
Paddy Burns, the chief technology officer of 4J Studios, and a long-term business partner with Chris, who lives in East Linton, knew instinctively what was required. He clicked with the Stockholm guys who were amazed that he knew as much about Minecraft’s inner working and underlying engine as the original developers.
“They very quickly understood that Paddy and the team could make this happen. It has all been about the relationships.”
But how would it work financially for the Scottish firm? “They asked us: ‘What kind of deal do you want?’ With hindsight, it was the best decision I ever made. I said, ‘We think you’ll sell a million copies but that’s an optimistic number, but we will do a deal where you pay us a royalty on anything over a million copies. We break even at a million units and if its sells a million and a half, we’ll be delighted,” he explains.
He grins widely. The Xbox version launched in May 2012 reached four million sales by October. Mojang sold another 4.2 million units in the run-up to Christmas and during December of that year, making it one of the best-selling titles of all time.
It continued to break records in 2013. Microsoft have sold over 15 million copies with some hefty royalty cheques being banked in Dundee. In comparison, VIS Entertainment’s biggest year, when it employed 250 people, was in 2002, and it was earning less than 4J Studios, whose philosophy is to remain small and work “with the best of the best.”
And there are the continuing prospects for 4J Studios with PlayStation 3 (with several million sales already since December 2013), PlayStation 4, and Xbox One and PlayStation Vita. The game has also sold over 20 million pieces of added content.
“It has been transformational for us. Our little bit of the world is the console games but that’s enough to be getting on with,” he laughs.
It’s also been amazing for Minecraft too. Markus Persson, aka Notch, had been working with King.com, a listed entertainment group for mobile technology, based in London and New York, and makers of mobile download games Candy Crush and Pet Rescue, and then decided to set up his own business.
Minecraft had no external investment so by the time he sold the business to Microsoft, he was already making a few hundred million dollars. Markus Persson cleared about $2.5bn on the deal. “To create that kind of money in five years without any external investment is phenomenal. He’s an interesting character as any 35-year-old billionaire would be,” says Chris van der Kuyl.
He represented the new games elite enjoying their fame and fortune and he recently outbid music stars J-Z and Beyonce to buy a $70m mansion in Beverly Hills. “While Marcus is a phenomenally creative brain, he understands the zeitgeist and has built the game he wanted to build. And suddenly the game became bigger than he ever believed it could.
It took some risks at the start and did crowdfunding before anyone knew what it was. He was developing Minecraft in his spare time. He asked for support and funding from the gaming community to set up the business and he got it in spades.
He then brought in a professional team with a small group of young guys around him,” says Chris. “It got so big.” He put his hand up and said, ‘My journey with this is over. It needs someone to manage this on to the next level.”
Chris van der Kuyl is effusive about Minecraft, which involves building a Lego-style environment where players join together. “It is, by far, the best game we have ever worked on. Once people get into it and want to play it, it is the most creative environment that anyone has ever made on a video game.
It is the only time in my career that I have a constant supply of parents and teachers, as well as kids, saying they adore this game and that it has a positive impact on their lives.”
He explained that from a business point of view, games sell on a six-monthly cycle and then require something fresh and challenging to keep the gamer involved.
“In six months, you have done most of the major sales, then you are managing the decline, until you get the next version or sequel. Minecraft is constantly updated, so that every couple of months there are major updates. Traditionally you needed discs, now this is done through downloading over the net.”
After three years, at the time of writing, Minecraft was ranked number five and number six in the top selling games charts with the PlayStation and Xbox versions. “That’s nuts. And it is 50-50 girls and boys too. The console version is for 6-12 years olds but there is also the community. A young generation of superstars who are playing the game professionally are publishing every day.”
He cites the likes of Stampy Longnose, who is a 24-year-old from Portsmouth, who uploads
Minecraft story video to Youtube everyday. “He’s the third biggest Youtuber in the world. He has five million followers on Youtube – and has around 350 million views a month.
He is probably the world’s biggest children’s media star. He’s bigger than Beyonce or Justin Bieber. If you are six to 12, you will know him. What we are seeing is play patterns, when kids are watching his videos – and others like him – then going to the game and trying to do what he did in the episode. That’s an incredible marketing tool.”
It’s also a feather in the cap for East Linton, near Dunbar, where Paddy Burns has moved from the old newsagents to an old pub. “We don’t see ourselves working on anything else at the moment. We’ve been speaking to Microsoft about it strategically for the future.
Minecraft is one of the biggest entertainment franchises in the world now. They announced a film option deal with Warner Brothers and there are the Lego toys. Our little bit is the console games.”
However, 4J Studios have also invested in TVSquared, the big data television advertising business set up by Calum Smeaton. “We are looking at backing and investing in the world of digital media and things we really believe in and I’m excited about Calum’s business. It’s amazing. We’re also in the process of buying our first piece of commercial property on the Dundee waterfront.”
This is a vote of confidence for Dundee, now making the most of its regenerated waterfront and the forthcoming arrival of the V&A. “I’ve always been a huge believer in Dundee and its culture. Our future as a business and a technology investor will be closely linked to regeneration in Dundee and East Linton.”
The company is backing a community broadband project to ensure Scotland’s villages have the bandwidth to compete for digital work around the world. He remains an adviser to the board of DC Thomson, the famed Dundee publishing house which owns the Beano, the Sunday Post, Dundee Courier, People’s Friend, and the Press & Journal in Aberdeen, and he is on the board of Brightsolid, a DC Thomson business, that is building a new tier III + data centre at the P&J’s Lang Stracht campus.
He’s optimistic about Scotland, saying the angel investment community, and also the likes of Pentech and Scottish Equity Partners, has been re-investing in digital business.
“We’ve a number of great companies but there are two that really stand out in the digital media and tech sector: Skyscanner, the flight comparison site, and FanDuel, the betting site for NFL and NBA sports fans. Both are backed by the angel and VC community and both I think will go to IPO or a sale and be worth billions. I don’t think people in Scotland realise how big these businesses are yet.
“I was in New York the other week and every media organisation I was talking to asked about FanDuel: ’How have this Scottish company done this?’ They have taken the American sports market by storm. Nigel Eccles, the chief executive, took a risk, when no-one else in the US could do so.”
He can’t leave without talking about RockStar North – who are fellow travellers in the games industry – and its move into the Scotsman’s former headquarter building in Edinburgh.
It is the maker of Grand Theft Auto 5, which remains a massive global hit. “It’s probably the single most valuable development organisation in the world and it’s based in Scotland.
“I think GTA5, just the one game, was bigger than the whole music industry for the year. Certainly the Minecraft franchise is up there with its sales.”
An hour with Chris van der Kuyl is a whirlwind of exuberant chat. He’s already picking up his bag and heading for the door. There’s much more to do for this driven entrepreneur.