Building a British Ubisoft – CEO Dominic Wheatley on the Catalis Group’s ambitious plans for growth

Catalis isn’t exactly a household name but the group’s subsidiaries: Curve Digital, Kuju and Testronic are all well known in the industry. And through them Catalis has had an excellent couple of years, topped off by a recent £90m acquisition by private equity firm Northedge – which itself comes with rare experience and previous successes in the sector. That means Catalis has money to spend in 2020, so for the January issue of MCV/DEVELOP we took the chance to sit down with CEO Dominic Wheatley, who took charge of the Tomb Raider in its heyday, and has similarly grand ambitions for his current business.

“I had the last big British games publisher in Eidos,” Wheatley begins. “And we floated it and it was all marvellous, though I actually left about 18 months later to move back to the UK for family reasons… But three four years later, it sort of declined and then fell into the arms of the Japanese, with Square Enix.

“So since then, there has been no big, and I mean really big British publisher,” Wheatley opines. “Now, Team17 do a good job but I wouldn’t say they were big. Our ambition is to become the next proper big British publisher. Because otherwise it’s all Americans, Japanese, the odd Frenchman, Yves Guillemot, and the odd German, Klemens Kundratitz.”

A British Ubisoft then we inquire? Or a British Koch Media? “Exactly,” he responds to both. “There isn’t one and we want to be it. That is our mission and I’ll give it another five years of hard work to build that.”

FIVE YEAR PLAN

Talking just before last year’s election, we don’t discuss Wheatley’s own political views, though he does throw in a pretty good impression of Boris Johnson for us at one point. And with his offices just a stone’s throw from the Houses of Parliament, and directly opposite the Department of Business, it’s hard not to think that Wheatley’s five year plan will chime perfectly with the new administration’s initial stint.

That government should treasure bullish entrepreneurs such as Wheatley, who in turn should be a beneficiary of its business-centric outlook.

Wheatley describes himself as a publisher, but his skillset requires him to pick the right investors as well as picking the right games. And it’s the group’s most recent investor which is behind this latest push.

“We’ve got Northedge, who’s a fantastic partner,” Wheatley tells us. “I’d been strongly recommended them by [Sumo Digital’s] Carl Cavers because they’d backed him before they sold him on to Perwyn, who then took them public. So that was the connection because Carl really recommended them. And I met with them and I just thought they were great guys and they obviously knew something about the games business, which is helpful. Because it’s a bit of an enigma for some people.”

That’s something of an understatement, which isn’t Wheatley’s usual style, with the industry long having struggled to find capital that understood it. Wheatley agrees historically but notes: “It’s changing. There is a lot more interest in the city now, about games companies, but still, it was great to find a PE company that knew what the hell you’re talking about!”

“There’s now a bucket of money set aside for me to use. So we can really build our company… and we’re looking at both organic growth and acquisitions.”

THE BELGIAN CONNECTION

And that’s something of a turnaround for the company, which nearer the start of the decade wasn’t in the best shape. Wheatley took charge back in 2013, when the company consisted of just Testronic and Kuju, having suffered somewhat under the previous management. Wheatley, as a non-executive director, stepped into a more active role in order to try and turns things around.

The company was €12m in debt, and Wheatley went cap in hand to see “four very grey-looking Belgian bankers” to explain how it was going to pay them back.

“Testronic had a name in Hollywood, a good name and it was something upon which we could build, equally Kuju had a good reputation in the market amongst publishers. So you weren’t actually starting from scratch, you had contacts, you had clients, you’d done things for people who might give you other gigs. It wasn’t a standing start. I wrote a little business plan, for the investors. We’re going to go into games testing because that’s growing and we’ll get Kuju to do as many [work-for-hire] gigs as we can to try and pay off the bank. But then we’ll go into publishing because, of course, I was a publisher at heart.

“We were given a reprieve. And sure enough we were paying back a quarter-of-a-million Euros a month… In about 2017 we managed to finally pay off the bank. To their great surprise. Did they send me a box of Belgian chocolates? No. Did they send me a bunch of flowers or a thank you note? No. Not a fucking thing, those ungrateful bastards. 12m fucking Euros!” He notes that the bank had written off 90 per cent of the debt, so it would have been bonuses all round when it got its money back.

Testronic has seen significant growth in recent years, with some 1,200 employees now, with the majority based at its ever-growing Polish office. But it’s been the success of Curve Digital over the last couple of years specifically that has been eye-catching.

“In 2015, I started looking for a digital games publishing company. And that’s when one of my young turks found Curve Digital. I’d never heard of them, but I clicked away and sure enough, the first thing that came up was Stuart Dinsey, who I knew rather well.” Stuart Dinsey is, of course, the creator and previous proprietor of this very publication.

“So that was the start of a bromance,” enthuses Wheatley. “Which has been a great success. Because I think they were turning over about a million pounds then. And this year, it’ll be 30! It’s a very important part of our business,” he continues, noting the importance of Jason Perkins [managing director] and Simon Byron [publishing director].

“So we were able in 2016 to bring Curve into the group, so then we had games testing with Testronic, we had Kuju making games for other publishers, and then we had Curve publishing indie games. All three legs of the stool. That was great.”

“Did they send me a bunch of flowers or a thank you note? No. Not a fucking thing, those ungrateful bastards. Twelve million fucking Euros!”

 

STOOL NOT STALL

Those stool legs may have provided a stable base, but Wheatley doesn’t believe that balance is actually the way forward for the group as a whole.

For starters, the group is no longer taking on work-for-hire projects. “The reality is, I wanted to wind Kuju down in terms of work for hire,” he begins. “We did our last work for hire gig this year, Zumba [Burn it Up] for 505 Games… It’s such a hard gig, the work for hire business.  It’s never going to the moon, it’s never going to be a big payday.”

That means that Kuju is now working exclusively on projects for Curve. “Kuju is really a concept now. It’s a set of studios run by Matt White [head of Kuju Studios]. So one minute we have 60 people, next minute it’s 10 people and then it’s 100. It goes in and out depending on what we’re trying to do for Curve.”

And that part of the business also covers studios that have been brought onboard: “One of the studios under the umbrella is Runner Duck. Which, of course, did Bomber Crew for us. And they are fantastic guys, but in a sense, who are now looked after by Matt White.”

Instead Catalis is pivoting the group more towards publishing: “My instinct is much more in the publishing world than in the work-for-hire world. Some work for hire companies are doing incredibly well, like Sumo. Actually, “we’re working together with a major studio on a special project, which is a terrific eight player, arcade-type racing game. We’re co-funding that, which means that we’ll publish it of course but they will receive a decent share if it goes well.”

So with games developed internally, under the Kuju brand, and co-productions, as well as signing up indie titles of course, Catalis is utilising all the usual means to find and create great content. And it now has more money to do so than ever before.

AN UPWARDS CURVE

So where will Catalis, or Curve in this case, be spending its newfound wealth from Northedge. Will it be investing in yet more indie projects, or even creating its own IP from scratch?

“Well, I think the latter is really difficult to do, to try and come up with ideas internally is hard… I think the better way around is to engage with the indie dev community and be the publisher of choice when anybody is thinking about self publishing, or having a go with somebody else – No, come and see us instead and we’ll do you a fantastic deal!”

But that’s just a first step in the plan.

“If the game does really well, then we would love to buy you. So Runner Duck as an example. These boys left Relentless, they kicked out on their own, they did a demo, they sent it to Simon Byron, he loved it, we commissioned them, so we basically gave them the money to do it.”

And Curve remains interested in the full range of titles, be they early demos or practically finished titles, as was its biggest hit to date: “Human Fall Flat, when it came to us, was pretty much done. Ready to go. It was a couple of months of spit and polish, and then we published it. So it was sort of done. Whereas Bomber Crew was just a quick demo, and needed 14 months of work ahead of it.

And it’s happy to fund or just offer its expertise in bringing a game to market.

“We are the publisher, and we can be the bank. Now, if you don’t need the bank, because you funded yourself or your father’s given you a few quid or whatever it is, that’s fine. We’ll just be your publisher, but if you need money as well, then we’ll fund you and your team to do it. And that’s what happened with Bomber Crew. And it came out, went to No.1 on Steam, and it was terrific.

“Co-founders David [Miller] and Jon [Wingrove] are fantastic guys, and we love them. And, of course, what we realised was that Bomber Crew could continue: Space Crew, Tank Crew, Navy Crew… they could keep going.

“And so I thought, gosh it’s a franchise and it’s done so well, so we bought them at the beginning of this year and they got some money, and of course some shares because that’s the obvious way you do these acquisitions. So they’re now shareholders in Catalis and it’s been a great success story for them, and indeed they’re working on the next project. So, that is literally ideal.

“And that’s the model going forward and equally if we find a great games company that’s had a hit, maybe they self published, but they’re willing to talk to us about becoming part of the family, then we’re open to that absolutely, they don’t have to work for us first, although it helps, but it’s not the end of the world if they haven’t. We’re very keen to acquire IP.”

LICENSE TO SELL

Speaking of IP, Curve Digital has recently gone on something of a spree of licensing it from elsewhere. The recent launch of the Kuju-developed Narcos: Rise of the Cartels will be followed this year by Futurlab’s upcoming Peaky Blinders game.

Wheatley has a storied history in the art of turning other people’s ideas into profit. After all, Eidos (and its predecessor Domark) had licenses for F1, James Bond, Trivial Pursuit and many more.

But licensed games haven’t been terribly popular in recent times, so what’s changed?

“We quite like licences, and in the case of of Narcos and Peaky Blinders, they are of course Netflix distributed programmes, which means that they are aired across the world,” Wheatley points out.

“Movies come and go, and if you miss the window it’s disastrous. And so in a way I like the TV stuff, because it’s perennial, for instance there’s new Narcos coming out in February, to greet the boxed version of the game.”

And with Netflix, unlike with previous TV titles, the shows have a practically unlimited shelf-life as part of Netflix’s ever-growing back catalogue.

“It’s just a part of our publishing strategy of course, we’ve got loads of indie games which are coming through which we’re sponsoring and financing and will publish in the next year. So there’s a lot in the pipe, but I think it’s quite good to have a little bit of a mix, and I quite like licences and we are talking to other IP holders about making games based on their IP. So it’s part of the strategy.

“I think that’s because of my background of having done [licensed titles] in the past. And it is a bit hit-and-miss obviously, because you’re trying to make a game based just on a concept, story and characters. And so you’re almost starting from scratch. Most of the stuff we see is already at the playable demo stage, and we can immediately love it or hate it.”

And love or hate pretty much sums up the critical response to Narcos to date too.

“We’ve had some pretty bad reviews,” admits Wheatley. “But we’ve also had a lot of good reviews. And I’m scratching my head a bit because it is Marmite to some extent. Some people think it’s fantastic, others that we’re trying to be XCOM and we haven’t succeeded.

“It’s also positioning, I think possibly we positioned it badly and that needs to be corrected. But the good news is, it’s digital, so it’s on the shelf forever, and you can change it and you can fiddle with it, and you can re-promote it and bring it to new audiences in a way that you couldn’t when it was just a physical product.

“The reality is we’re still learning. And many of those lessons we’ll apply to the next one and the next one. Because again, Curve had never done this before, so there was an element of learning. It doesn’t matter if you fail, or you don’t do very well, what’s important is that you try and that you learn.”

And Wheatley is still learning, despite having been in the business for longer than most. Whether that experience, and willingness to learn, can make Curve into a British Ubisoft still looks like something of a longshot, but it presently has the momentum to take a good shot at it.