Lyto Game is an Indonesian online game publisher, established in 2003 and headquarters are located in Jakarta. The company published games like Ragnarok Online, Getamped, Seal Online, Cross and many more. If you play online games and you’re from Indonesia, it’s likely you will have heard of Lyto or the game it published, Ragnarok Online. The company was among the pioneering online game publishers in Indonesia.
Tech in Asia published a report about the business and the background of Lyto:
Until now, Lyto is still a force in the scene with online games such as Crossfire, Ragnarok 2, and the newest release, Phantomers. Andi Suryanto, co-founder and CEO of Lyto, now also spearheads the newly formed Indonesian Games Association.
Andi started work at age 20 in an IT company in Jakarta, while he was still in university. After graduation with a degree in IT, his parents wanted him to pursue a master’s. “But because I grew up in an entrepreneurial family, we also discussed what business opportunities there are for the young generation,” explains Andi. The situation turned into a dilemma. He already accepted to continue studying in Australia, but at the same time, he wondered if he should jump right into entrepreneurship. In the end, Andi recalls, his father was fine with either choice. “If you do business, that will be your school fee, if you do a master’s, it’s also your school fee. You have to choose one,” Andi’s father said. Andi chose to start his own business. His ideas were half-baked at first, but he took them to his dad anyway to strike up a discussion. The veteran businessman rejected all but one of Andi’s ideas: online game publishing. Andi wasn’t much of a PC gamer, because he and his brother grew up in the era of consoles, but he was aware of the success of online gaming in China, India and the US.
Few online game publishers existed in Indonesia at that time, so Andi jumped on the opportunity. This marked the beginning of Lyto. In Chinese, Lyto means “more profit.” The company was officially created in 2003 by Andi, his brother Willy, and a friend. Andi became CEO.
Six months of sleepless nights
After a solid research phase, Andi chose to start with Ragnarok Online, which was booming in Korea and the US at that time. Ragnarok Online is a game based on a comic by the same name. Without doubt, Andi thought, this game would be eagerly received by online gamers in Indonesia. He prepared a proposal for Gravity, the Korean game developer and publisher of Ragnarok Online. To his astonishment, it got accepted immediately.
Andi’s business proposal included trustworthy data, but the other reason was timing. Korean game publishers wanted to expand to Indonesia, as the online gaming market in Korea was becoming tight. Indonesia, a fast growing developing economy and one of the most populous countries in the world, sounded like a lucrative opportunity to the Korean firm. Gravity agreed to enter a business partnership with Andi under one condition: Lyto needed to build a separate legal entity together with the Koreans. That wasn’t easy and what followed were many sleepless nights.
After working closely with his Korean partners, Andi calculated that the expected cost of publishing, maintaining the servers, and country-wide promotion would come close to US$500,000. In 2003, there weren’t many of the tech investors we see today in Indonesia, and traditional investors didn’t know much about the online gaming industry. To get initial capital, Andi had to borrow heavily from his parents and extended family. This added to his stress, as he felt he could not disappoint them. Will they pay to play? When Lyto launched Ragnarok Online in Indonesia, it offered free access to the game for six months. After that trial period, users would have to start paying to continue the game. Even though the user base continued to grow, Andi slept less and less. His core worry was: will Indonesian users pay to play? Andi had learned from other game publishers that it’s common for games to lose 90 percent of its users when the model switches from free to paid.
When Andi’s dad asked about the business, Andi told the story of how his users were increasing every day. He hid the fact that most of his users may soon disappear without paying. This became Andi’s biggest nightmare. Of course he didn’t want to disappoint his parents. “We are very worried even though the game had a huge user base. We worried that the day we start monetizing, 90 percent of users will leave,” says Andi. Andi and his team gritted it out by communicating more with each other and ensuring they serve the gamers well through introducing localized features and events. At end of six months, Ragnarok Online’s number of monthly active users ballooned to 400,000. And according to Andi, when they started to monetize, 90 percent of the users stayed and paid monthly to continue playing. “Can you imagine, all of them are paying for the game? That was the best moment of my life as a businessman,” says Andi.
New competitive market
This first mover advantage firmly established Lyto in Indonesia’s online gaming industry. Their quasi-monopoly lasted from 2003 until 2006, before foreign gaming companies like Garena entered the market. Lyto still publishes online games and remains a strong player in the industry. “Actually there was no specific strategy [for Lyto] after the emergence of rivals. […] In the end what makes a community survive is customer service. Service and ease of communication is paramount in Lyto’s team,” says Andi.
The real competition arose with the emergence of the massive mobile gaming trend, which decreased PC gaming revenues. Andi recognized that failure to capture the mobile market might make Lyto obsolete in future. To survive, Lyto needed to bring high quality mobile games to compete in Indonesia.
In 2013, Lyto finally issued their first mobile game called Faunia Paw. But even though Faunia Paw won the Best Casual Mobile Game award in 2013, it was not as successful as Lyto’s previous games. According to Google Play, the last app update is from December 2014. It seems like Lyto discontinued developing this game. Lyto is not discouraged by the mobile gaming trend, however. Later this month, Lyto plans to release an action role-playing-game for mobile. Andi knows that Lyto must continue to innovate to survive. In an attempt to try something experimental, Lyto recently published an online game called Phantomers. Lyto challenges anyone to hack the game. Whoever manages to cheat their way through Phantomers will get a cash reward. Lyto uses this creative way to address the problem of cheating, which is a challenge faced by game developers and the gaming community. “In the future, we will focus to develop [our own] games and directly collaborate with the best Indonesian and international game developers,” says Andi.
To make more local success stories happen, Andi and his colleagues in the industry recently put rivalries aside and banded together to create AGI, the Indonesian Games Association. Andi was elected as the association’s president. He remains optimistic about the future of gaming and creative industries in Indonesia. “For aspiring youths, go for internet and content businesses,” Andi says. “These areas have low barrier of entry and an abundance of opportunities.”
Source: Tech in Asia and Lyto Game
