Video-game start-up picks up the pieces

In Tropico 3, players get to be the president of a banana republic.
In Tropico 3, players get to be the president of a banana republic. (Kalypso Media Usa)
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By Mike Musgrove
Sunday, October 25, 2009

A modestly sized office tucked in the leafy northern corner of Baltimore might seem an unlikely perch from which to crack into the big-bucks video-game industry, but that's what Kalypso Media USA is setting out to do. Having opened its doors in June, the firm just launched its first title, a strategy game called Tropico 3.

For Deborah Tillett, a local game industry veteran, it's partly a matter of practicing what she preaches. When not running the U.S. branch of Kalypso, she teaches a class in entrepreneurship at Towson University. There's one point that she repeats to her students on a regular basis: During an economic downturn like this, there's no place to go but up.

"This is the best time in the world to start something," says Tillett, the president of the German company's new U.S. outpost. "You can't get worse than zero."

As it happens, that's also a premise that happens to match up with some of the action in the company's new game, set in a fictional Caribbean island called "Tropico." In the title, released this month, players take on the role of a dictator guiding the tiny island's limited resources and try to guide it to success, through the skillful management of business and social policies.

"El Presidente," the island's ruler, can be benign or despotic according to a player's whim. Players can decide whether to build factories or schools; farms can raise either food or profit-producing tobacco crops. The game's ultimate goal is to build a country that is both profitable and filled with citizens who are well-fed and content.

It's not very often, these days, that a new company tries to crack into the business of publishing video games. Talk to game developers and publishers and they typically relate the same headaches: Software development costs are through the roof, marketing costs are growing -- and getting shelf space on retail stores is a constant struggle.

As a result of such factors, there's been a major consolidation in the video-game industry over the years, with deep-pocketed publishers buying up smaller studios. What's more, as part of that trend, big publishers are typically producing fewer games in the hopes of making stellar profits off the breakout hits that sell millions.

Start-ups like Kalypso, however, hope that running against the grain gives them an advantage. Tillett cites the success of an independent company called Her Interactive, which found its fortune by making games based off of the Nancy Drew series of mysteries.

Her Interactive was launched at a time, a little over a decade ago, when publishers were convinced that games aimed at girls wouldn't sell, so the game studio offered its first title for sale on Since that time, the company has sold 7 million copies of its Nancy Drew games, which regularly break onto the industry's bestseller lists.

"Oftentimes it's the smaller companies that take the risks," Megan Gaiser, the company's founder, who grew up in Bethesda and turned to the games industry after a career as an editor and producer of documentary films. "The bigger companies are going to stick with what works."

As the name would imply, Kalypso's Tropico 3 is itself the third installment of a series, but the firm did not make or publish the game's previous versions. Take-Two Interactive, a company famous for the very lucrative Grand Theft Auto games, sold Kalypso the rights.

Take-Two is a huge company that wouldn't be able to make enough profit for a new Tropico game to be worthwhile, Tillett said. Previous versions of Tropico sold hundreds of thousands of copies; while that's a respectable following by many measurements, it's a pittance compared with many millions of unit sales for every new "GTA" game.

Basically, it's just another lesson that could be taken from one of her business classes. "Bigger companies can't afford to do what we're doing and thus are missing part of the market," she said.

Kalypso intends to put out about 10 game products a year, said Simon Hellwig, one of the German founders of Kalypso. Many of those will be games designed by independent studios in Europe that couldn't otherwise get distribution on the shelves of retail stores in the United States. Tropico 3 was developed by a software team in Bulgaria, under contract with Kalypso.

Hellwig admitted that the company had originally looked in places such as the West Coast when looking to open up shop in this country, but it ultimately decided to give Tillett the job, based on her experience with Baltimore-area companies such as Breakaway Games, a firm best-known for making simulation software used for training military personnel and emergency responders. "To us, it's more or less equal where the office is, if we have the right people."

As for Tropico 3, the early reviews have been generally positive. At, a Web site that aggregates reviews written on sites across the Web and distills each down to a number score, the game has gotten an average review of 83 out of 100.

Priced at $40, or a little bit less than the $60 price tag attached to most new games, the title went on sale last week and is available online and in game and electronics stores. Although the game has only been on sale a few days, it is already -- by one recent check -- at the number-two spot at, in the category of PC strategy games.

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