Mobile entertainment firm Magmic, which celebrates its 10th anniversary this year, sprawls across the fourth floor of the Major Building on York Street. One storey below – down the hall from e-commerce platform provider Shopify – are the offices of gaming incubator Smoke Labs, which received early stage funding from Magmic CEO John Criswick.
The funds to start up Smoke Labs came from the $10-million sale six months ago of remote IT management firm Rove Mobile, which Mr. Criswick co-founded, to SolarWinds.
“The company was around for quite a while; 12 years. It’s a long time to (wait for) an exit, but it was good and I think everyone was happy to take part in that,” Mr. Criswick says.
The company, Mr. Criswick says, was supported by an investment from the Business Development Bank of Canada, but there were no other investors besides himself.
Mr. Criswick decided to reinvest the money. Some of the proceeds were used to help launch the inaugural Ottawa Gaming Conference this year, which Mr. Criswick says attracted fresh talent to the nation’s capital.
By investing in Smoke Labs, those developers now have a new place to work.
Smoke Labs operates autonomously from Magmic, purely focusing on developing games. When those games are ready for market, Magmic handles the marketing and relationships with publishers, allowing the developers at Smoke Labs to start work right away on a new set of games. First releases are expected this fall.
“There is so much more to the business than uploading your game in iTunes to augment your success,” Mr. Criswick says. “The key for a scenario like that is to work through Magmic.”
Magmic already has established relationships with companies such as Mattel, the New York Times and Rubik’s. Although this means a steady stream of business for the content creation firm, it also means Magmic lacks the flexibility of a startup.
“It, in a way, has to be less innovative,” Mr. Criswick says. “The structure of the company is that games get produced in longer periods of time, and with higher standards.”
There is a belief among some in Ottawa that too few entrepreneurs invest their exit money into new companies, with some notable exceptions such as business magnate Terry Matthews.
While Mr. Criswick says he is glad to give back to Ottawa, he notes Smoke Labs will directly benefit Magmic.
Smoke Labs is going to produce riskier kinds of games, he says, but he declined to get into too many details pending the release of the first few titles.
“It’s games that draw a lot of attention … those types of titles where maybe one in 10,000 would be a hit,” he says.
According to the company’s website, current games under development include word puzzle game Lingo Tales! as well as Arty’s Quest, featuring a skateboarding squirrel who hoards nuts for the winter. The firm is focusing only on iOS for now, but plans to expand to other platforms as the games gain popularity.
Developers at Smoke Labs, for the most part, already have experience at Magmic. They tend to be recent graduates of Algonquin College (an institution that Mr. Criswick closely affiliates himself with) and past interns at Magmic during their time in school.
In October, the four-person company plans to hire four to eight more developers and ramp up production, says director of operations Kyle McInnes. Developers will work in two-person teams on a four-month development cycle, with each team ideally producing three games a year.
Smoke Labs’ games will be free to play, with opportunities for monetization coming from players making in-game purchases to gain more tokens for gameplay, for example. The main restriction on developers’ creativity is a non-compete requirement to produce games that are significantly different from Magmic’s content.
For developers at Smoke Labs, the big benefit comes from tapping into the growing network of companies under Mr. Criswick’s investment, Mr. McInnes says.
Employees at these firms will often do activities such as whitewater rafting together. They will go out for beers after work, or gather en masse at a resort Mr. Criswick owns in Perth.
“It’s reminiscent of the good days of web in the ’90s,” says Mr. McInnes. “But we’re not building companies off of a PowerPoint (presentation). We have a solid business plan.”
Criswick’s other companies
Magmic: Created more than 100 puzzle, sports, action and multiplayer games for BlackBerry, iPhone, Windows and Android.
Mercury Lounge: ByWard Market music club.
Pretzil: Platform allowing users to broadcast their activity on the apps they use and receive virtual, digital and physical rewards.
Rove Mobile: Develops IT management software for hand-held devices. (sold in 2012)
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