GigaMedia Limited, through its subsidiaries, engages in the development and license of online gaming software, and provides application services, as well as owns and operates an online games business. The company also provides broadband Internet access services.
The company’s software licensing and online entertainment business is operated through its subsidiary Cambridge Entertainment Software Limited (CESL). The company’s Taiwan online games business is operated through Hoshin GigaMedia Center, Inc. Its Hong Kong and PRC online games business is operated through T2CN Holding Limited (T2CN) and its subsidiary, FunTown World Limited. Its Taiwan Internet access service businesses are operated through its subsidiary, Hoshin GigaMedia, which focuses on retail users, and Hoshin GigaMedia’s subsidiary, Koos Broadband Telecom Co., Ltd. (KBT), which focuses on corporate users.
The company acquired FunTown, an online casual games business, in January 2006 to offer online entertainment business. FunTown operates casual games platforms in Asia, with approximately 9 million registered users and an offering of 40 casual games and services in Greater China as of June 15, 2007. FunTown’s games can be played on personal computers, mobile phones and airplane entertainment consoles. FunTown also provides value-added services, such as tournaments, personal contact lists and social networking to help build a player community.
Between April 2006 and June 2007, the company acquired control approximately 51.12 percent of the voting rights in T2CN, an online sports game operators operating mainly in the PRC. T2CN is an online sports and casual game operator in China and operates FreeStyle, an online sports game in China. T2CN has close marketing partnerships with international brands, such as Coca Cola, Nike and Nokia.
The company operates its legacy Internet access service business through its subsidiary Hoshin GigaMedia, which provides Internet access services. As of June 2007, the company had 26 cable system partners, through which it had access to approximately 3.8 million Taiwanese households, as well as approximately 520,000 small and medium-sized enterprises (SMEs). In addition, another of its subsidiaries, KBT, provides broadband services to corporate customers.
Software Licensing and Online Entertainment Business
The company operates its software licensing and online entertainment business through its subsidiary, CESL, and through its wholly owned subsidiaries, Cambridge Interactive Development Corporation (CIDC) and Internet Media Licensing Limited (IML). CESL develops and licenses software solutions and application services in the expanding Internet-based online entertainment markets. CESL offers a range of products and services, including online entertainment and social networking.
The company’s products and services are available in 16 languages, which include mostly European languages and some Asian languages. CESL also helps existing and potential clients who license its software and services to expand their business through a fully-customizable multi-tiered licensing program to a great number of sub-licensees.
The company’s software products are built upon modern Internet technologies capable of providing multi-player gaming platforms, transaction engines, advanced risk management tools, online marketing tools, data mining and reporting utilities, graphical user interfaces and localization in 16 major languages including English, French, German, Italian, Spanish, Portuguese, Norwegian, Swedish, Danish, Dutch, Greek, Finnish, Polish, Hungarian, Simplified Chinese, and Japanese.
The company’s software products are specially designed to enable its clients to manage the online entertainment properties and offer online entertainment to visitors of their online entertainment properties. The company provides the gaming software products, including Online Entertainment Management and Online Entertainment Modules.
Online Entertainment Management: Online Entertainment Management are tools that enable the company's existing and potential clients to offer online gaming software, monitor end-user behavior, and potentially to monetize the traffic and patronage generated by the end users. The company’s integrated and multi-lingual e-commerce system facilitates Internet-based transaction processing and can provide analysis of transaction records of its diversified international end users.
Online Entertainment Modules: Online Entertainment Modules are customizable entertainment modules that run on Microsoft Windows 95/98/NT/2000/ME/XP/VISTA and feature a realistic 3-D environment, selectable background music, and local language interface.
In addition to licensing the company's software products to its licensee, UIM, it offers various application services and consulting services for backend operation.
Infrastructure Design Services
Infrastructure Design: Architecture design of servers, routers, firewalls, network software and management tools required for an Internet property.
Site Creation: Creation and branding of the company’s client’s Internet property, customized to match its licensee’s identity and creative theme.
Transaction Processing Design Services
Payment: The company provides consultation for the design of timely collection and distribution of payments through various channels and merchants.
Billing: The company provides consultation for the design of real-time and out-of-band transaction processing and order management.
Risk Management: The company provides consultation for design of tools and processes for fraud detection, prevention, and management.
Customer Support Services
Infrastructure Consultation Support: The company provides complete round-the-clock consultation support to help clients resolve infrastructure issues.
Platform Technical Support: The company provides consultation during periodic maintenance to update, patch, and fine-tune the system performance of its software solutions.
Custom Gaming Software Development Services
It includes design and development of custom entertainment modules and interfaces for the company's platform meeting client specific requests.
Online Games Business
The company operates its online casual games business through its subsidiaries Hoshin GigaMedia and FunTown World Limited. Hoshin GigaMedia operates its online games business in Taiwan, and T2CN and FunTown World Limited operate its online games business in Hong Kong and the PRC.
FunTown offers a range of online games and services, which the company develops in-house or license from third parties. The online games offered by FunTown include casual games, such as MahJong and various card, chess, and table games, most of which cater specifically to Asian audiences, as well as casual games. FunTown also provides services, such as game clubs for players, tournaments related to FunTown’s online games, and social networking.
The company's online casual games allow users access to a range of online entertainment, from traditional Asian games that are instantly recognizable and easy to learn and play, to online casual games that allow users to interact with each other in virtual worlds by assuming characters they might customize.
The company's operating platform includes its technological infrastructure, distribution and payment system, customer service center, game content management and marketing platform. The company's technological infrastructure consists of a server network throughout Greater China, the architecture of which is scalable to accommodate business growth and user demand. The company’s distribution and payment network in Taiwan includes approximately 12,905 physical distribution points. Additionally, in 2006, the company processed approximately 920,500 online transactions for virtual point cards. The company’s games are also available on mobile phones, the Intel Viiv platform and on certain airlines.
Under the strategic co-operation arrangement, the company has continued to co-operate with Wretch Co. Ltd. (Wretch) under the original strategic alliance, which was expanded to include strategic co-operation with Yahoo! Taiwan, to develop a co-branded Web site with co-marketing of FunTown’s games on key Yahoo! Taiwan properties. Direct links to the co-branded Web site are featured throughout Wretch, and have been placed on Yahoo! Taiwan’s online game and messenger homepages with banner advertisement rights designed to attract users to the co-branded Web site. Members of Yahoo! Taiwan are able to directly access FunTown’s games on the co-branded Web site with their Yahoo! login information.
In December 2006, the company entered into a strategic alliance with Infocomm Asia, a Southeast Asian online games operator and distributor offering blockbuster titles, such as Granado Espada and Hellgate: London, both under license for most of Southeast Asia. The company also secured a license to offer and operate Hellgate: London, an online game anticipated to be launched in 2007, in the territories of Taiwan, Hong Kong and Macau. It would operate Hellgate: London in partnership with Infocomm Asia through a strategic joint venture, Dragongate Enterprises Limited (Dragongate Enterprises), in which the company holds a 70 percent interest and Cyber Gateway Pte., Ltd. (a wholly owned subsidiary of Infocomm Asia) holds a 30 percent interest.
In February 2007, the company secured a license from the Toppig Corporation, a Korean company, to offer and operate Nanaimo, an online action role-playing game expected to be launched in late 2007, in the territories of Taiwan and Hong Kong.
FunTown offers approximately 40 online casual games in the following categories: MahJong, Chinese poker, Chinese chess, table games, social games, puzzle-style games, casual games and chance-based games. These games are real-time and multi-player capable.
MahJong is a traditional and Chinese social game, often played on holidays, at social gatherings and during special occasions, such as weddings. It is played in Japan, Korea, Greater China and other parts of Asia. Similar to poker, MahJong is a multiplayer game, consisting of four players per game. FunTown offers different local versions of MahJong for players in the PRC, Hong Kong and Taiwan. Players select a table, based on either skill or stakes level, and can then invite friends to play on the same table online.
FunTown organizes an annual MahJong tournament in Taipei, Taiwan which is open to anyone belonging to one of FunTown’s MahJong guilds. In 2006, approximately 400 guilds and 30,000 players participated in the event and attended the tournament. In December 2006, the company also obtained the right to co-host the MahJong World Championship together with the World MahJong Organization.
FunTown offers various Chinese poker games major in various regions of Greater China. FunTown’s players can select their desired poker table based on the level of skill or stakes. Virtual currency is purchased to play these games, and may be used to play other FunTown games or to purchase virtual items.
FunTown also offers various Chinese chess games. Players can select from opponents online based on different skill levels.
FunTown has a social networking and matching game called FunTown Village, which offers a virtual playground for players to meet other players through their online avatars. Players can purchase virtual items, such as clothing, to enhance the appeal of their online avatars.
FunTown also operates a platform known as Osuke Playground, which offers a collection of puzzle-style games and matching games similar to major and classic games, such as Bejeweled. In addition, Osuke Playground also offers some table games, such as nine-ball, a contemporary variation of pocket billiards. These games are designed with online multi-player features which allow players to pit their skills against one another. In addition, like all other games offered by FunTown, the Osuke Playground games are integrated into its FunTown platform with features, such as a player-to-player messaging system, virtual currency and avatars. The major games in Osuke Playground include Magical Blocks, Happy Link, Zoo Match and Fortress 2.
Advanced Casual Games
FunTown has broadened its games offering to include sports action games and arcade-style games, such as a multi-player obstacle running game that was launched in June 2006 called Tales Runner. In February 2007, the company also secured a license from the Toppig Corporation to offer and operate Nanaimo, an online action role-playing game expected to be launched in early 2007, in the territories of Taiwan and Hong Kong.
FunTown also offers chance-based games for users, who purchase virtual currency to play the games.
In December 2006, the company, through its 70 percent owned subsidiary, Dragongate Enterprises, Limited (Dragongate Enterprises) secured a license to offer and operate Hellgate: London, an online action-driven role-playing game expected to be launched in early 2007, in the territories of Taiwan, Hong Kong and Macau.
In March 2007, the company also secured a license from the SEGA Corporation to offer and operate Phantasy Star Universe, an online action role-playing game which is expected to be launched in the second half of 2007, in the territories of Taiwan and Hong Kong.
FunTown provides gaming services to its players to improve their playing experiences and support the development of a major player community.
The company offers player clubs in which FunTown players can form their own club, invite players with similar interests or skill levels to join, and organize online and offline events for club members. Player clubs complement the social qualities of online casual games by helping to build and maintain an online game community.
Players can organize and participate in clubs and compete in weekly online club tournaments. On an annual basis, FunTown also sponsors real-person tournaments where players attend the tournament in person and compete online via computers provided on the tournament premises. FunTown organizes annual MahJong tournament in Taipei, Taiwan which is open to anyone belonging to one of FunTown’s MahJong guilds. In 2006, approximately 400 guilds and 30,000 players participated in the event and attended the tournament. In December 2006, the company also obtained the right to co-host the MahJong World Championship together with the World MahJong Organization.
Friends and Family
The FunTown platform has a personal contact feature, similar to the contact list of instant message programs, which enables players to see when their personal network of friends and family are online.
FunTown’s platform is designed to make friends and have fun, as well as compete and win prizes. The platform has a 3-D virtual town hall, in which players might interact, meet new people or even get married. FunTown’s social networking features help build an important online community.
FunTown also offers various in-game items which might be purchased by players for their online personas, or avatars, to create their own look while participating in the online community. The items for sale for avatars include facial expressions, clothes and accessories.
As of June 15, 2007, the company had approximately 9 million registered players of its online games, and it recorded approximately 123,500 paying players, approximately 41,350 peak concurrent users and 20,500 average concurrent users, all in the month of May 2007.
The company holds licenses for the operation of five games in various territories, Tales Runner, Fortress 2, Hellgate: London, Phantasy Star Universe and Nanaimo.
The company’s main competitors in the online games business are casual game operators in Greater China, including Shanda, Nineyou (Shanghai Everstar Online Entertainment Co., Ltd.), Tencent Holdings Limited, Ourgames.com (Beijing Globalink Computer Technology Co., Ltd.), International Games System Co., Ltd and Chinagames.net. The company’s competitors also include massively multi-player online role-playing game operators in Taiwan, including Gamania Digital Entertainment Co., Ltd. (Gamania) and Soft-World International Corporation.
Internet Access Services Business
The company provides broadband Internet access services to consumer and corporate customers through various technologies and products, including cable modems, leased-lines, virtual private network and other value-added services.
Internet Access Services Offerings
Cable Modems: The company offers its broadband Internet access services for consumers through cable modems at transmission speeds of approximately 6 Mbps. The company's cable modem-based broadband access services allow subscribers to use bandwidth-intensive multimedia applications, such as interactive games, audio, video and distance learning applications, and electronic commerce applications, such as retailing, financial services and online software distribution. As of December 31, 2006, the company had 11,447 cable modem-based broadband customers.
Corporate Access Services: The company also offers dedicated and Internet access services to corporate customers over fiber optical lines. The company's target customers include ISPs, Internet content providers (ICPs), corporations, SMEs and cyber cafes. The company's corporate ISP services include leased-line services, ranging from 1 Mbps to 1 Gbps, virtual private network and other value-added services.
ADSL: In May 2006, the company entered into an asset purchase and sale agreement and a transition service agreement with Webs-TV to sell its ADSL business and provide certain transition services.
Markets for Internet Access Services
Consumer Internet Access Services: The company offers two-way cable modem-based broadband service packages. The company also offers selected subscribers discounts on their monthly access fees and quarterly or yearly payment options to further promote its access services.
Besides directly providing cable modem-based Internet services under GigaMedia’s brand name to end users, the company also provides trunk bandwidth and backend systems, which include a customer provisioning system, billing system and network management system, to cable operators that wish to operate their cable modem-based Internet service under their own brand names, or cable modem services. As of December 31, 2006, the company had agreements with 11 out of its 26 cable partners granting the company the right to provide Internet access services through their cable systems.
Corporate Access Services: KBT offers and sells Internet access to corporate customers over fiber optical Ethernet MAN infrastructure. KBT offers various speeds of leased-line services, ranging from 1Mbps to 1Gbps, to different kinds of subscribers, such as ISPs, ICPs, corporations, SMEs and cyber cafes. As of June 2007, KBT has approximately 600 corporate users.
As part of the company's Internet services, it provides various other value-added services including free electronic mail, bulletin boards and photo albums.
Broadband Network — Cable and ADSL Network
In 2005, the company completed the upgrade of its island-wide backbone network, which is based primarily on Gigabit Ethernet technologies and covers 20 major districts out of a total 25 districts in Taiwan. In addition, the company built small regional data centers to host both the cable Internet and ADSL headend equipment in these 20 districts connected by its backbone network.
These centers also act as service hubs for: the provision of key community services, including electronic mail, photo albums and personal Web hosting, to subscribers; the management of network performance; the replication of content and applications; and the provision of infrastructure to cache data.
Network Operations Centers: The company provides centralized network management through its network operations centers, which represent the nerve center of its whole network. The company's centers use advanced proprietary network management tools and systems to monitor the network infrastructure, enabling it to address network problems before they adversely affect its subscribers.
In providing broadband Internet access services, the company competes with Chunghwa Telecom. The company also faces competition in corporate ISP services from fixed-line service providers, including Chunghwa Telecom, Taiwan Fixed Network, NCIC’s Sparq and Asia Pacific Online. Its competitors include Seednet and SoNet
In May 2006, the company disposed its asymmetrical digital subscriber line (ADSL) business.
GigaMedia, Ltd. was founded in 1997.