Winner: SmartCompany 2007 Award for Top Exporter sponsored by Australia Post
SmartCompany50 rank: 6
Revenue: $57 million
Growth: 116%
Founders: Shane Yeend, 40 Kevin McLean, 46
Based: South Australia
Employees: 120
Industry: Cultural and recreation
Website: www.imagination.com.au
The DVD games market is worth an estimated $US500 million, with projections that the category will double by 2010. Imagination Entertainment already has an estimated 20% market share. About 80% of its $57 million revenue for 2006-07 is coming from the US, Britain and Europe, winning the company the SmartCompany 2007 Top Exporter Award for 2007.
Shane Yeend (right) and business partner Kevin McLean celebrate 23 years in business together this year. They started out in 1984 with less than $100,000, making corporate videos and basically struggled for years in the dot-com boom, when at one stage there was only 21 days worth of cash left in the bank. It was the impetus to come up with a great innovation that took this South Australian company global and made it millions.
It seems a simple idea; take the traditional board game and add sound and moving images so people can play on TV.
Yeend first went to Los Angeles in 1998 with his board games. He found a software developer in the Yellow Pages who could rewrite DVD player software so that games sequences could be shuffled (which can’t be done on VCR technology).
A category was born. Yeend began buying up the rights to old television shows that would convert well to this new DVD interactive format.
He attended many trade shows and hung around hotel lobbies to pounce on buyers from retailers such as Target or Wal-Mart and drag them to his booth.
Another big break was meeting the creative director of Disney at a conference, and signing a three-year, $50-million deal.
Yeend says global business is going through the roof. Recently the company launched the DVD games at the Tokyo Toy Fair.
The company has a television division, a mobile division and a download division, and its games are sold in more than 85,000 outlets in 50 countries. “We are constantly trying to reinvent the way people play games,” says Yeend.
Imagination Entertainment is owned by investment group TiNSHED (30%, from a $4.5 million investment), Kevin McLean (30%) and Yeend (30%).
But cash is always a problem. Competing with no cash against global games giants that are 100 years old with huge marketing budgets and that control the retail shelves is not fun. “It has been a David and Goliath struggle, with a great deal of blood, sweat and tears.”
Key success factors:
- Own your own distribution network at all costs.
- Before launching a new product, get the finance and business model right.
