Serious Games Summit DC 2006
Speaking at the recent Serious Games Summit DC 2006, Jerry Heneghan from Virtual Heroes started a session on raising funds for serious game development with a quick lesson in marketing. As he was setting up the presentation, “Love of Money” by The O’Jays blasted on the loud speakers. With the fading sounds of “Money money money, Money!” Jerry started out his session. Introduction Jerry began by stating that one of the primary goals of the session was to help others avoid simple mistakes in the fund raising arena. He then went on to explain his background and how he came to the conclusions that he had drawn about the serious games industry. He is a Westpoint graduate with 10 years active and 3 years reserve in the military. He has an MBA from Duke, and has started several entrepreneurial ventures. The first he mentioned, Interactive Magic, which he jokingly dubbed “Interactive Tragic”, went public in 1999. He later worked with Red Storm and Ubisoft in 2000, and then at the Research Triangle Institute on medical training software. In 2004 he started Virtual Heroes, which brought us to the current venture he is involved in. Staying Clear of “Games” The first and most important thing Jerry said you could do with regards to fund raising was pay attention to simple vocabulary. He noted that games still have a negative connotation in the military and corporate worlds, so refer to them as “Advanced Learning Technologies”. The perceptions are changing, but this simple shift will avoid confusion as well as pointless arguments and conflicts. Also, in starting the company, he had to take a different approach from the traditional game studio. Heneghan noted that quality of life issues were a much bigger deal in retaining and recruiting people, both because the average age was older than a standard game startup, and because many of the people they wanted had been burned. The work that the company performed when starting out, unlike traditional game contracts, was mostly work for hire. This approach and the market conditions allowed them to be profitable from the start, something very not usually found in a traditional game company. All this begun with only 50k in seed, and leveraging connections from RTI and Red Storm. He spoke then about some of the backlash from the market when using the word games. Jerry stated that in order to get sales you have to understand the market, and the market for these applications has the viewpoint that if it cannot be evaluated it doesn’t work. Because of this, Virtual Heroes worked hard to understand evaluation methods such as after action review, MPEG recordings, and Biometrics. He also noted the importance of market data when going for funding or work. Good Partners Key to Success Following the cash register sounds and taking a pragmatic approach allowed for this initial success. Virtual Heroes found people who were interested in the results that they could deliver and then worked to exceed expectations. They worked with America’s Army on training and education, and planning and rehearsal aspects and managed the movement to an open platform. Other key partners, and long acronyms, included the USAJFKSWCS at Fort Bragg, NC and NEMSPI, training first responders. Getting the Money Here Jerry spoke about Virtual Heroes fund raising efforts. He noted that a perfect record on service for is not good enough. A product is needed to attract investment. The market is 37B for modeling and sim, 10B in games, 10.3 billion corporate training, and 9.6B in healthcare. From this data they discerned that 150-200 million is moving to the serious games market. This is a conservative estimate that they have come to. Looking at the greater healthcare training market, the segment they are watching is First Responder and Nurse training. Here they found 400 million available with an estimated 1.3B in 2011. This information led Jerry to believe that Healthcare is market for the future. For a long time the healthcare market recognized the value of using interactive training mechanisms, but has historically focused on hardware simulators. The excessive costs of maintaining these solutions, and the limited access to students they provide is stating to prove a huge bottleneck. As the market searches for solutions, more and more institutions are embracing software simulations.
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