GameDaily BIZ: Codemasters just had its most successful year in its 22-year history. What's been at the heart of this success?

Rod Cousens: I joined the company two and a half years ago, and while I regard it as a hotbed of development and creative talent in the middle of England, where a company was a very U.K.-centric company, Codemasters began to adapt and modify its product strategy to one which has more of a global appeal. So basically what's starting to happen now is the investment in product with a more global appeal. We published three titles recently that were next-generation and were targeted at that, and we've been fortunate enough to have a pretty good impact so the revenues from the U.S. have grown from sub 10 percent to about 40 percent. Clearly, we're keen to build on that and align ourselves from a financial perspective with the typical profile of a global publishing company where the bulk of the revenues are derived from the U.S. market.

So that's one of the big things. Also, taking a product where we've got a great skill set, such as racing, and modifying the design so there's a greater appeal to the U.S. consumer. That's manifested itself in something like DiRT where we sold more of that title in the U.S. than the combined cumulative total of the prior seven versions. It's aspects like that, plus expanding our global distribution in other territories – obviously we've built a relationship with Warner Bros. to do our physical ship and dispatch in the U.S.

And as you know, product development can take at least two years, so what we started two and a half years ago is now flowing through and is a pipeline, which bodes well for the future.

BIZ: Is Codemasters looking to bring U.S. revenues up to 50 percent, even with other territories, or do you want it to become an even larger portion of the business?

RC: Ideally, we'd want it to be 50/50. We do have, from an American point of view, some obscurities in our product lineup... we're the market leaders in cricket but we really only sell that in England and Australia. Our biggest competitor [in that space] is obviously Electronic Arts, but it's one of the few spaces in which we can say we beat them. We haven't given up on cricket because we're in a position of market leadership. Because of obscurities like that I would anticipate the revenue profile to be equally divided between North America and Europe.

BIZ: And in terms of the Asian market, obviously Western publishers have historically had more difficulty penetrating the market and creating games that are tailored to the Asian gamers' tastes, but what is Codemasters' approach?

RC: For the last two years it's been one of a licensing approach. So we've taken some content such as DiRT and we've licensed to certain Japanese, Chinese and Korean companies, and we've built relationships with companies such as Shanda in China. We've also worked with a number of the Japanese publishers over the years and some of the games like rally games and racing games do quite well... so we'll be shipping DiRT some time in the beginning of 2008 and we've got great hope for it in the Japanese market.

BIZ: Concerning Codemasters' online business, the company recently made some of its games free to play, and that would seem to align with some of the business models in Asia where the games are micro-transaction supported. What are your thoughts on that?

RC: First of all, depending on the product, we've taken a different approach in various areas. We've also shipped Lord of the Rings Online in Europe and we've done particularly well in the volume of both subscriptions and boxed good sales in the European market and it's exceeded that in the U.S. helped by our relationship with Midway... and that's a straightforward subscription model and we'll continue to do that.

As for our approach to the online market, we've built a significant infrastructure in Europe, which basically enables us to punch above our weight. Certainly a number of the more significant U.S. publishers haven't got the server farms and the infrastructure to support local languages 24/7 (which is an issue in the European market). The way we did that was to take a risk averse approach initially by going in and picking up products like for the Korean market that aren't necessarily best suited for Western tastes and then putting them through a system which we've gradually built... and as we played through the whole Korean output we've turned them into free-to-play games with micro-transactions and there's been a significant uplift in obviously the revenue base we're picking up out of micro-transactions and also the take-up of would-be subscribers.

So it was initially a risk averse strategy but obviously for major releases we'll be looking at the subscription-based model in key European territories because it supports it at the moment. But as you know based on the experiences coming out of the Asian market, [online] is an evolving model that's changed dramatically over the years, so we're still watching it closely.

BIZ: When evaluating Codemasters' own IP, if you look at something like Clive Barker's Jericho, the reviews just weren't very good. Clive Barker is obviously a hugely important figure in the horror genre, and attaching his name to a poorly received product couldn't have been a good thing for Codemasters. What's your take?

RC: I think that's a fair observation. We see it as a category that we want to continue to support, and we believe we will build a longer term relationship with Clive Barker resulting in other franchises that we create working off his ideas. Because that was our first foray into that market, I would give us a tick for good effort, but we have more work to do. I'm also mindful that certain products like the first two Grand Theft Autos didn't do so well and then exploded on the third. That's obviously a different analogy, but what I'm saying to you is that we're committed to that genre of product and as we get more sophisticated development and experience we'll continue to improve.

BIZ: When I spoke with Codemasters VP of Marketing Charles Bellfield back at E3, he indicated that Clive Barker was very, very much involved – almost too much – in the whole game development process. While Clive is an author and a filmmaker he might not know what really makes a good game. Do you think that maybe hurt the title somewhat?

RC: I think we have a great relationship with Clive Barker, and the fact that he's as passionate about his ideas and designs – and that they should be translated into a new form of art as far as he's concerned, which is interactive entertainment – is something that we would definitely indulge. But clearly, we have a role to play based on hopefully our knowledge and experience within the games business that he can also learn from... as he continues to evolve and get better. I would say, though, that if it's a good initial effort, both sides will learn from the other and we'll just continue to get better. To put that in another context, very often people license an IP and then have no further involvement and criticize it thereafter. In fact, he has gotten involved and he's very enthusiastic... it's akin to a movie star being used by a motion picture company to promote the studio, and we certainly haven't had to contain him. So I don't want to constrain that; I'd like to harness it and figure out how we all work together and ultimately get an awesome product out of it.