Irish developer Ideal Binary has raised €750k (around £642k) to fuel its ambitions in the increasingly competitive book-apps market. The funding includes €500k from the AIB Seed Capital Fund, managed by Enterprise Equity Venture Capital, and €250k from Enterprise Ireland.
The Dublin-based company has released a series of iOS book-apps based on Brothers Grimm fairy tales: Rumpelstiltskin and Red Riding Hood, along with three apps in its 3D Classic Literature series. The company uses its own PopIris 3D engine, which was built using the previous games industry experience of founders Aidan and Kevin Doolan.
As part of the funding round, Barry O’Neill, who has previously held mobile games executive roles at Namco Bandai and Upstart Games, has joined Ideal Binary as chief executive. “We are a profitable business, so this new capital is to expand the company’s production,” he says. “This is not a flaky startup situation.”
O’Neill explains that the Doolan brothers founded Ideal Binary in 2008 with the intention of making iPhone games, before realising that their 3D engine might be put to good use for book-apps instead.
The first three Grimm’s apps are a good showcase for the first version of the company’s platform: digitising the traditional pop-up books with characters and scenery that can be tapped on to trigger light interactions: thought bubbles for characters, spinning water-wheels, draggable clouds and so on.
“Rapunzel has sold more than 75,000 units, and continues to occupy top five and top ten positions in a lot of territories around the world,” says O’Neill. The app was sold for £1.49 for its first week after launching in December 2010, before rising to £2.49 and maintaining that price ever since. That means somewhere between £78k and £130k of net revenues for Ideal Binary after Apple’s 30% cut.
O’Neill says that Ideal Binary is betting on the PopIris engine enabling it to make high-quality book-apps without spending silly money, and so delivering a decent return on their investment.
“We’ve heard stories about people spending upwards of £250,000 developing very sophisticated book-apps as one-off showcases, which got great reviews but ultimately did very mediocre sales numbers,” he says.
“PopIris allows us to achieve a very high degree of interactivity at a fairly reasonable production cost, which is one of the keys to success in this market. Even the bigger publishers are not realising sustainable profitability levels. A lot of money is being spent developing book-apps which are not delivering results.”
Will the company be sticking with out-of-copyright fairy tales for its book-apps? Probably not. O’Neill says Ideal Binary has had “a number of discussions” with potential licensors, but adds that the company is keen not to end up over-paying to make book-apps based on popular brands, and thus face a new challenge to its chances of making back its development costs.
“We are looking at original IP too,” he says. “We have a pretty strong audience across all of our existing apps, so we think we can make a go of investing in our own IP. We are also looking at different demographics across the children’s sector. At the moment, we appeal mainly to parents reading with their 3-8 year-old children. We’d like to go a little bit lower and a little bit higher, so there will be different product lines coming out.”
Ideal Binary is also planning to go beyond iOS with its book-apps, with O’Neill saying Android is firmly on its agenda, partly due to the sheer number of Android devices being sold, and also due to demand from the people writing emails to the company asking for Android support.
O’Neill is particularly excited about new Android-based tablets on the way from Amazon (NSDQ: AMZN) and Barnes & Noble: the Kindle Fire and Nook Tablet respectively.
“It’s fantastically exciting. I don’t buy this line that the Fire will benefit Apple (NSDQ: AAPL) due to adding further fragmentation in the Android market,” he says. “I see it as creating an entirely new market in its own right, among people who might not be iPad aspirant, or even if they are, may not have the resources to purchase one. Or they could be existing Kindle users looking for an interesting media tablet to complement their e-reader.”
In the meantime, Ideal Binary is hoping to continue developing its engine and apps, with a version of Hansel & Gretel due for release before Christmas with noticeably more game-like interaction than the earlier Grimm titles.
O’Neill is enthusiastic about the crossover between games and books in the apps world: Ideal Binary’s founders are one example, but so are the former game developers working at publisher Nosy Crow; the social games history of several founders of kid-apps publisher Mindshapes; and the recent appointment of former Electronic Arts (NSDQ: ERTS) executive Rex Ishibashi as chief executive of US book-apps startup Callaway Digital Arts.
“I think game-based metrics will influence everything from marketing to design to portfolio-planning for successful interactive book publishers,” says O’Neill. “Those metrics are something the traditional publisuing industry has less experience with, which is why you’re seeing people coming in from the games market. They will have a distinct edge when it comes to designing and marketing new content.”
In the meantime, Ideal Binary is hoping to build on its existing success to help future titles like Hansel & Gretel find an audience. As with many mobile games developers, the company sees the value of its network as hugely important.
“You can’t just launch a book-app and hope for the best,” says O’Neill. “The challenge for all developers is how to monetise your existing customers better, and how to encourage your existing customers to find new audiences for you.”
This article originally appeared in MediaGuardian.