Istanbul-based Peak Games’s farming simulation games don’t include pigs or vineyards. Tailoring for the local market consists, among other things, of women characters wearing the hijab and creating the online equivalent of a Turkish coffeehouse’s ambiance — including the smoke, coffee and baklava.
If that sounds too niche to be interesting think again. Three-year-old Peak Games offers both digital and mobile versions of traditional Turkish board, card and tabletop games and Western games adapted for Turkey and Arabic-speaking companies. It has 12 million daily users in Turkey and the Middle East and is growing rapidly.
“We don’t define success based on a specific game platform or genre,” says Peak Games co-founder Rina Onur, 27, a scheduled speaker at Web Summit, a Dublin conference to be held October 30th-31st that’s expected to attract some 8,000 attendees this year. “Some say they are the leader of this or that, but we don’t define ourselves in that way. We are very much focused on a region. Initially we only served the Turkish market and then the Arabic-speaking market. We knew it was a large, high-growth market that was very under-penetrated and underserved. There was nobody building games targeting this region and these people.”
Peak Games’s phenomenal growth puts it in the same league as some of the home runs of the tech world: it claims to have reached its first 10 million users in just 270 days, much faster than it took Twitter and Facebook to reach those numbers.
First mover advantage and impressive traction helped Peak Games, which now has about 150 employees and 50 contractors based in Turkey, Jordan and Saudi Arabia, raise $30 million from investors that include Earlybird Venture Capital, Hummingbird Ventures, Endeavor Catalyst and an investor from the Middle East whom Onur declined to name.
“Raising as much as we did early on was one of the best things we could have done for the company,” says Onur, who has a degree in economics from Harvard. Prior to co-founding Peak Games she spent time in London working for Morgan Stanley and then moved back to Istanbul, where she had gone to high school, to work in private equity. “We saw the opportunity to penetrate a wide open market and wanted to scale very fast. Having access to capital allowed us to do that.”
Interest in the region is certain to intensify. The Turkish domestic market holds lots of promise: mobile phone penetration is high and about half of Turkey’s 77 million people are online. Unlike Russia, where most people still pay in cash, in Turkey more than 60% of adults use credit cards. That’s not all. More than 70% of the population is under 35, according to research company comScore, and they are big consumers of social media: Turkey is the sixth-largest country on Facebook.
North Africa and the Middle East are also rich targets. In the Middle East there are 24 million Facebook users, including six million in Saudi Arabia, but 60% of the population is still not online. Egypt had 12 million Facebook users at the end of last year, according to Internet World Stats, while Morocco had five million and Algeria four million. And, there is still plenty of room for growth in the region, as just a third of Egyptians, half of Moroccans and one in seven Algerians are online.
Turkish companies looking to expand into the Middle East and Africa have an easier task than their Western counterparts, says Onur, because of geographic proximity, intertwined cultures and religious and political affinity. “Just as it’s difficult for an American company to be successful in China, Japan and Russia, it’s the same in the Arabic world,” says Onur. “It’s not something that you can just improvise.”
Some of the games adapted for Facebook and mobile — the most popular of which is Okey, a traditional Turkish tile-based game — have been played in Turkish coffeehouses for generations. Offline players who try playing their favorite games online or on their mobile phone often then begin playing other games for the first time in what becomes a virtuous circle for Peak Games.
“Facebook started out very important in gaming, especially social and casual gaming, but now there is a trend in the world, especially in the West, of people moving to mobile,” says Onur, who serves as Peak Games’s chief strategy officer. “Since we are in an emerging market we react to change a little bit later, but we are seeing this trend too. If you look at the user base, a huge chunk is still coming from Facebook and we continue to invest there, but we realize that mobile is the future and we’re investing there so we can be the leading local player.” (Facebook’s recent purchase of Parse, a Silicon Valley back-end-as-a-service start-up, is part of the American social network’s own big push to become more relevant to mobile developers and help players like Peak Games make the shift to mobile.)
Peak Games’s most successful games — which are offered over both the Android and iOS platforms — already earn more than half of their revenues from mobile. Onur says Peak Games will release some financial information for the first time later this year. The company has limited itself so far to saying revenue has quadrupled each year since its founding. With all its games free to play, the company gets almost 97% of revenue from micro in-game purchases such as virtual tea and baklava.
By targeting overlooked, rapidly-growing regional markets, the company has been able to get a leg up on companies with a global focus. And that ‘s a development that is likely to lure more gaming companies and investors to the region.