The Latest News on the Social Games Market in Europe and Emerging Markets


Smeet Receives Additional Funding from Hasso Plattner Ventures and Partech

By Gary Merrett

Nearly 10% of Germany’s teenagers use the Smeet communication platform. The success within this age group and Smeet’s positive international development has convinced the investors from Hasso Plattner Ventures and Partech to continue and increase their investment. Smeet is a virtual world with aspects of social gaming. Users can create their own avatars and rooms as well as explore the different worlds. At the same time they can communicate with other Users via text and voice chat, watch YouTube-videos together, compete in various minigames and collect points to reach higher levels.

Hasso Plattner Ventures has been financing the company since the end of 2006. In May 2010, Hasso Plattner Ventures completed another round financing together with Partech amounting to a seven digit figure. Eran Davidson, CEO of Hasso Plattner Ventures, “…Smeet’s juvenile target group is particularly hard to please and expects innovations on a regular basis. Smeet continuously increases its user numbers, which is proof of the product’s high appeal and versatility. We trust that there will be further success.” Andreas Schlenker, Partech, reaffirms the renewed investment by saying, “We re-invest in Smeet, because after a strong start, we see tremendous growth potential based on the enormous innovative strength, the good management and the potential for a highly profitable and international business model.”

Young adults in France, Italy, Greece, Poland, Spain, Great Britain and Latin America actively use Smeet and thousands of new users register every day. During the past nine months, Smeet was able to record notably high growth. Strategic partnerships with big European social networks such as Netlog, Zoo and Fotka accelerated global development. Positive development as well as the potential for further growth has reassured investors to refinance. Smeet will use the financing to further develop the product and make the virtual world more attractive to customers. In addition, Smeet’s global development plan will focus on enhancing our current markets and expanding to new markets.

On the 30th June, Hasso Plattner Ventures will host the Annual Entrepreneurship Forum in Potsdam. The main topic will be China- A threat or an opportunity and it is expected that 250 high-ranking professionals and spokespeople will be in attendance. During the forum, Hasso Pattner will also present a live example of the Smeet platform.


Smeet Continues Expansion in Europe

By Sebastian Sujka

The 3D chat industry is highly competitive. How hard it can be to win market share has been once more demonstrated last week, when the promising 3D flirt chat Bailamo declared bankruptcy. In contrast to Bailamo, also Berlin-based 3D chat Smeet continues growing.  Expansion has been successful so far and the virtual landscape is in constant change, striving for improvement.

As we showed some time ago in our guest post, Smeet puts a high emphasis on internationalization. In the previous six months Smeet expanded to France, Italy and Poland. For Poland, which can be considered a tricky market Smeet has a strong partner with Fotka – a major local social community network. It can be suspected that the move to Poland is just the first step towards market share in the rest of Eastern Europe.

With the new markets, Smeet now counts 2.5 million users. To continue the success story it is crucial to come up with new features and keeping acquired users entertained as well as winning new ones. To reward existing user’s loyalty, a VIP model and a credit system have been integrated.  The credits can be earned by conducting missions or tasks in the game and can be used to reach a higher user level. The VIP model gives the user exclusive advantages like reduced costs for virtual goods.

On the other side Smeet uses customer retention techniques that proved to be successful in top social games – developing objects. The user now has access to objects like plants, which only develop optimally way if they are being watered regularly.  With the new features Smeet develops more and more into a multimedia entertainment platform and we can be curious what the next steps will look like.


Internationalization – an Online Case Study

By Sebastian Sujka

Internationalization is one of the biggest challenges that start-ups face – and one of the most attractive opportunities in terms of growth and revenue. We have identified a practical example of internationalization, sMeet Communications GmbH – and highlighted some of the key areas of their internationalization strategy. We have also got some helpful advice to consider before taking the plunge into unchartered, international waters.

Before starting the internationalization process budget considerations are crucial: do you have a substantial budget, or are you looking for a low-cost strategy? The next step is to identify the right market: is there enough potential for your product? Are there existing competitors in that market, or are you ‘unique’? If you know what your budget is and which market you want to corner, you then have to consider ‘product-localization’: can you transfer your product directly into the new market or do you have to alter it to fit with cultural, social and economic differences? The specification of the target group should follow, along with your marketing strategy. It’s also very important to consider your revenue channels: are your potential customers willing to pay for your product and if so, what is the most popular payment method in this new market? Analyzing competitors or similar products will really help you here, as you can see how these products have been accepted by the end user. Last but not least, you need to consider the logistical elements like  an office. Do you prefer having local offices, or is it more cost effective to be based centrally in your home country?

To answer these questions, we have asked Sebastian Funke, CEO of sMeet Communications GmbH for some insights. sMeet is a 3D virtual chat site with games and interactive social features. For the past two years, sMeet Communications has launched its 3D chat site into multiple international markets including UK, Spain, France, Italy, Greece and South America. On the back of several successful, low-cost international campaigns, sMeet continues to grow with a Polish launch scheduled for this month. Market research is the first step in the internationalization process. ‘You need to make sure all marketing campaigns are in place weeks before the launch, as fully synchronized campaigns are very important to customer acquisition’. Due to the nature and broad appeal of the sMeet platform, product-localization is not necessary; however translation is always required. In almost all countries, the target demographic for the sMeet 3D world is very similar, and acceptance of the product is high, but understanding individual markets is imperative. Sebastian says that, ’…over time, we’ve learnt a lot about our users and how they adopt our product differently. We feel that communication is the key to understanding, and asking our users directly through surveys and questionnaires will give valuable insights into the level of product satisfaction’. ‘Before each launch, we always check the product issues thoroughly. After a launch it is important to measure the success of your product features – resolve any issues, and take constructive criticism and feedback from the community. Remember, their opinion matters!’

Despite similarities in terms of target demographics – preferred payment methods can differ greatly.  To understand customer payment trends, sMeet turns to competitor analysis as a guide to choosing the right payment providers. But monetization is a complicated area, and requires time, experience and above all – patience. Some countries prefer to pay in cash; some prefer credit cards, while others use prepaid cards. The issue of payment is very important for a company like sMeet, which generates revenue through the sale of virtual goods. ‘It’s a good idea to get in contact with payment providers early, that way you know what your options are, and there is no nasty surprises’ advises Sebastian. Without a reliable way to monetize your users, you cannot have a successful launch.

Finally, you need to think about how your firm will be structured. sMeet has opted for the centrally structured model, with many international employees based in Berlin. Each market has a specific Country Manager in charge of translations, business development and customer acquisition, as well as Community Assistants to increase user satisfaction and deal with post sale customer queries.  ‘We’ve learnt that having a centrally-based international team is a positive way for our company to grow. It improves the flow of creativity and new ideas and information, and ensures that everyone stays focused.  In our current situation, this could be difficult to maintain if we had several regionally-based offices. The important thing is that we are adaptable to our human resource needs,’ says Sebastian.

Internationalization strategies need to be well thought out, and should be prepared in advance so that problems, IT issues and poor managerial decisions can be avoided. Remember that all areas require attention, and it is especially important to consider the right payment methods and marketing strategies. When all aspects are synchronized effectively, internationalization can offer your company a lot of opportunities for growth and prosperity.