Singapore gaming firm Garena valued at US$1 billion

Co-founder Forrest Li says Garena is popular because it integrates social networks with gaming. Garena Stadium in Bugis+ mall allows gamers to play while spectators watch.
Co-founder Forrest Li says Garena is popular because it integrates social networks with gaming. Garena Stadium in Bugis+ mall allows gamers to play while spectators watch.BT FILE PHOTO PHOTO: GARENA
Co-founder Forrest Li says Garena is popular because it integrates social networks with gaming. Garena Stadium in Bugis+ mall allows gamers to play while spectators watch.
Co-founder Forrest Li says Garena is popular because it integrates social networks with gaming. Garena Stadium in Bugis+ mall allows gamers to play while spectators watch.BT FILE PHOTO PHOTO: GARENA

Up to 100,000 gamers visit Garena Online each night to chat and battle it out

Every night, as many as 100,000 gamers go to Garena Online to play multi-player games, chat and share tips and tricks.

They are mainly from South- east Asia, Hong Kong and Taiwan, and come together to do battle on their PC screens, playing games like League of Nations and Defence of the Ancients.

It is free to be a Garena member, but to win their virtual battles, many make in-game purchases of bullets, weapons, shields and other accessories.

The five-year-old company with 1,000 employees in the region has its own virtual currency called Shells. Gamers buy credits of between US$5 (S$6.20) and US$60 to pay for their online purchases.

Garena co-founder Forrest Li, 36, claims he has more than 100 million members. Now, the World Startup Report in the United States has given Garena a valuation of US$1 billion, putting Singapore in an exclusive billion-dollar club of 29 countries with at least one US$1 billion company each.The world's largest Internet company is Google, valued at US$410 billion.

World Startup Report gets information from stock exchanges where companies are listed and uses publicly available information on acquisition value and valuation at the latest investment round. As a last resort, it makes a guesstimate based on revenue and the industry.

No financials are available for Garena since it is a private company, but Mr Li has projected its net revenue this year to be more than 10 times that of 2011.

Industry sources put Garena's revenue at close to US$200 million. In venture capital maths, a company's valuation is usually three to five times' revenue. The World Startup Report took the higher side to value the company at US$1 billion.

Mr Li told The Sunday Times via e-mail that Garena is popular because it integrates social networks with gaming. It pioneered the way people play and interact with one another by providing in-game chat services and calls. Gamers create buddy lists so they can chat online and check on game progress. They can also form groups or clans, and chat with multiple gamers simultaneously.

"We pioneered the concept of social gaming through Garena+, our first product in 2010 which was then a new business model not seen among tech start-up firms," Mr Li said.

Married with a child, the permanent resident keeps a low profile. He spends much of his time travelling or in his Garena Stadium, a 550 sq m cybercafe-like space at Bugis+ mall which allows 90 gamers to play using the latest and fastest high-end PCs. Game play is projected on five big high-resolution screens for about 200 spectators to watch.

Opened in 2012, the stadium holds gaming competitions and events like cosplay and sells game premiums. Garena is also training commentators to give blow-by- blow accounts of the action during competitions.

According to research company Gartner, the online gaming industry will be worth US$21.6 billion in 2015.

But dark clouds are gathering. Gamers are adopting smartphones, tablets and even game consoles as their primary gaming devices.

"PC and online games will remain popular, but compared with game consoles and mobile games, it is PC games that will take a backseat as game players make a choice of convenience and popularity," said Gartner in a report published last year.

Industry observers say Garena must get the latest games to retain members and attract new ones.

Mr Li believes a powerful PC with a large screen, keyboard and mouse provides a powerful gaming experience that is hard to replace.

But he admits that smartphones offer new opportunities, excitement and flexibility to the gaming industry "by largely lowering the access barrier to games, thus broadening the customer base for online games".

"My wife and four-year-old daughter enjoy playing games on smartphones and I do not expect to see them playing online games on a desktop PC," he said.

But Garena is not standing still. Two years ago, it introduced BeeTalk, a mobile communication service that already has 17 million users in the region with more than 100 million daily messages sent.

"BeeTalk users have interests like sports, music, travel or photography. It is much broader than gaming," said Mr Li. "When we better understand our users' interests, we plan to promote other high-quality and targeted products and services.

"(It would be) no surprise if one day, we start to recommend music, food, or good sporting shoes' deals to our BeeTalk users, other than mobile games."

chngkeg@sph.com.sg