Kayak Interactive plunges into wireless gaming market.
By: Gwen McNamara
If you’re like millions of other Americans, when the train is late or the wait for a meeting too long, you turn to your cell phone or other wireless device for entertainment.
According to recent studies of the wireless gaming market, more than 22 million people in the United States currently play games on their mobile phones or personal digital assistants, and by 2007 that number could more than double to more than 70 million.
Recognizing wireless gaming’s increasing popularity, one West Windsor company is prepared to cash in and take the industry to the next level.
Kayak Interactive, based in Carnegie Center, recently received close to $12 million in series A financing to further its development of new software, which is expected to make truly interactive, multiplayer games a reality for the wireless world.
"Right now we have a ‘perfect storm’ situation where everything is aligned gameplay, cell phones and wireless network technology in our favor," said George Faigen, chief marketing officer for Kayak. "We are creating the link to make multiplayer gaming a realistic step for the wireless market."
Using Kayak’s software, game developers and publishers will be able to design and distribute multiplayer games for wireless networks, which could support tournaments or player leagues. Such groups could in turn generate significant revenue and extend the brand power of cell carriers and wireless service providers, Mr. Faigen said.
"With our software you’ll be able to play, say, a game of chess with someone halfway around the world," he said. "We see this as the next natural step for wireless games."
Cynthia Ringo, managing director of VantagePoint Venture Partners one of three venture capital companies to contribute to Kayak’s series A financing agrees. TL Ventures and EnerTech Capital were the other two companies.
"We think multiplayer gaming is very compelling," Ms. Ringo said.
With cell phone subscribers already downloading ringtones, graphics and single-player games to their phones, it seems logical that more advanced multiplayer games would also be popular, she noted.
"Overall this is a growing industry with multibillion dollar potential," she said. "The platform Kayak has built will benefit game users, developers and publishers as well as the wireless service providers. We’re excited about this investment."
Founded in 2003 by Mr. Faigen, Andrew Maunder and Aleta Ricciardi, Kayak Interactive’s core technology is licensed from Valaran, a business process and integration software company formed by Mr. Maunder, Ms. Ricciardi and two other partners in 2000.
Work at Valaran to develop software to allow emergency responders to share information at accident scenes led to the multiplayer gaming initiative.
"It just happens that multiplayer gaming is the first commercial application for that research," said Mr. Maunder, Kayak’s CEO.
Kayak is currently in discussion with a couple of game publishing companies interested in using the company’s software, according to Mr. Maunder.
"We anticipate an announcement within the quarter," he said, "and expect to see our first revenues within the first or second quarter of this year."
Still, while Kayak is confident its product will transform wireless gaming, market analysts say there are some obstacles the company will have to overcome.
Peter Kastner, with the Boston-based Aberdeen Group, a tracker of information technology investments, says pricing could be a problem.
"Right now most cell phone services are sold by the minute," he said. "Playing a game for an extended period of time could get costly. But if Kayak’s software leads to a marketable product, increasing demand, that may force companies to re-evaluate pricing."
"The market is still embryonic," added Jim Gunton, general partner at NJTC Venture Fund, in Mt. Laurel.
Just how much the wireless gaming market will be worth is uncertain, he said. Various forecasts predict the market could be worth anywhere from $4 to $17 billion by around 2006.
"There are also a lot of unanswered questions will people be inclined to play advanced games on such small screens? Are there any really compelling games out there people want to play?" Mr. Gunton asked.
"Still, while (wireless gaming) is just starting out, it is an exciting market," he continued. "Maybe the Kayak investment is a sign it’s for real."