Razer willing to shoulder OUYA’s indie debt

29 Jul 2015 | Author: | No comments yet »

Ouya left indie game developers in the lurch, but Razer is trying to help.

Razer has confirmed its acquisition of Ouya, maker of the Android-based game console that started as one of Kickstarter’s biggest hits before fizzling out when it came to market with few games, limited functionality, and a bad controller. Ouya’s distinctive Android console wasn’t part of the deal, but Razer is getting the rights to Ouya’s software, as well as its technical and developer relations teams. While Ouya has been clinging to life for some time now, the fate of the original vision for the Android-powered, living-room gaming hardware seemed to be sealed in March when company executives said that the Ouya would no longer focus on hardware. Polygon reports that the deal includes about over 1,000 games that will be able to run on Razer’s device, making the purchase a quick way to prime it with content.

Notably, Razer is not acquiring the hardware part of Ouya’s business, specifically the microconsole and controller that helped make Razer’s name in the first place. But Razer has its own Android-based system, the Forge TV, and the company is pushing hard to make that system, and Android TV-based gaming, a reality in homes not just in the States, but in the growing Chinese market. “Android TV was already something we were interested in, or rather Android gaming in the living room,” Razer co-founder and CEO Min-Liang Tan told Polygon following the acquisition. “It’s something we’ve been hyper focused on. When this opportunity came about to bring the entire suite of content from Ouya to Android TV it seemed like a phenomenal opportunity.” In other words, Razer wanted all those TV-optimized games to bolster their own catalog for the Forge TV—though Tan says that Razer plans to truly open up Ouya’s catalog, making everything available on Google Play.

The company said Monday that it will transition Ouya users to the Forge, offering discounts to switch to the device, and the ability to keep playing games acquired for Ouya’s console. Polygon and Motherboard have spoken to multiple developers who qualified for money from the Free the Games Fund, a $1 million initiative that supported Kickstarter-funded Ouya games. Razer acquired Ouya in part because of those games, but the startup also came with another interesting asset: Ouya didn’t just sell its own hardware, it also supplied games to devices from Xiaomi and Alibaba.

Uhrman said that she was departing from the company, which seems to make sense given that Razer is more or less stripping it for parts to work on its own software and services. But at least one — Alibaba, which put $10 million into Ouya earlier this year — will now be working more with Razer. (More on that below.) Ouya CEO and co-founder Julie Uhrman will not be coming over to Razer as part the deal, Uhrman and Tan told TechCrunch, although both note that Uhrman supports the transition. The fund was launched in 2013, and the money was supposed to be paid out after milestones that included releasing a beta, launching the game, and completing an exclusivity period of one to six months.

This isn’t quite as high-profile as the Oculus Rift’s sale to Facebook, but it marks yet another scrappy Kickstarter success selling out to bigger corporate fish. The fund, which was meant to build out Ouya’s catalog, has caused problems for the company before — developers allegedly started funding their own Kickstarter projects to game the matching system, causing them to overhaul the rules two months after launch. And while the companies did not comment at the time, it was indirectly confirmed by Mesa, the investment bank that helped broker the deal. (In little twist, Mesa itself was acquired just last week.) Razer says the acquisition closed on June 12.

Razer will be integrating Ouya’s games, controllers and accounts to its Cortex TV gaming platform, and will relaunch Ouya’s store as Cortex for Android TV. Tan tells TechCrunch that as of today, Razer’s software platform has “millions of users and over 2 million daily active gamers.” Ouya claims to be the world’s biggest Android TV console publisher, with more than 1,000 games, and the developer relations team will in part be working to keep building that business.

However, they’ll also have to make up the funds by giving away games over Razer’s Cortex store. (As Polygon explains it, if they receive $10,000 for a game that costs $10, they’d need to give away 1,000 copies.) It’s not clear how great a deal this is in the long term, but it’s still far better than what Ouya was reportedly offering: nothing. While this was a hard trail to blaze, we proved that we could bring new thinking to how the games industry operates and we hope we have paved the way for others, allowing all game developers to bring his or her game to the big screen.” But while competition against incumbents like Microsoft and Sony proved to be too challenging for Ouya, the shifts we’ve seen — precipitated by the rise of smaller and mobile computing devices and new experiences altogether — point to there being room for more players. On the software side, Ouya had already been working with companies like Xiaomi and its Mi Box and Alibaba‘s TMall Box, and that will continue under its new owner as a way for Razer to expand the economies of scale of its bigger platform. “Alibaba Group is committed to bringing high-quality games and content to our Chinese users. Razer clearly is not ready to give up, though, so while it continues to develop the hardware is hoping for another software boost to the product by way of Ouya.

Prior to the sale, Ouya had raised $33.6 million with investors including Kleiner Perkins, Jay Adelson, Mayfield Fund, Nvidia, Occam Capital and Shasta Ventures.

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