How a dancing George Bush made me £19m

Not many video arcades see £19m-a-year pass through their tills. But then Rob Small, 32, is not running your typical, one-armed-bandit-riddled games centre. He's doing it all on his Hoxton-based website, Miniclip.com, attracting more than 43 million people a month to play everything from traditional shoot-em-ups to Monopoly and Sudoku. And it's all thanks to George W Bush.

An "obsessive player" of video games as a child, Small was looking for a way to cash in on the internet boom of the late 1990s when he met Tiehan Presbie, a City futures trader "who also wanted to build a business online". The problem was, neither knew exactly how they'd do it. Their big brainwave didn't actually come until after the tech bubble burst. One night in 2001, they were sitting in Presbie's flat in East London. "Tiehan had this idea for a dancing George Bush" that people could interact with online. "I had my doubts, to be honest", but Presbie started dancing and Small added animations, using a programming tool called Macromedia Flash to superimpose George Bush's head on top of his friend's.

The subsequent game, Dancing Bush, "was a huge success". Tiehan and Presbie sent it to over 4,000 friends and colleagues by email, and watched it spread like wildfire. Within two months more than two million people had seen the clip. "But we weren't really ready for the amount of traffic it generated," he says. "Our servers couldn't cope with the volume and went into meltdown." Advertisers began knocking, but the pair knew that interest would soon disappear unless they found a way to capitalise fast on the interest in Bush. Another problems was that "you wouldn't go playing Dancing Bush for ten minutes. You'd play it for a few seconds." So they decided they needed to make more games, with longer lifespans, to encourage people to stick around.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The pair invested £40,000 to get Miniclip off the ground, buying their own server, "as bandwidth is the biggest cost to a small business like ours". At first they just added a dancing Tony Blair and Jacques Chirac, but then as hobbyists began to pop up around the world making their own games, they hired developers as far away as Ukraine to do the work for them. "We started building up this catalogue of content and then advertising began to pick up on the back of the users coming to our website."

In the first year, they made a profit on a turnover of £300,000, then £1.5m in 2003 as more games were added to the site. Last year, turnover hit £19m. Some came from advertising, but they also earn money from film companies, who pay Miniclip to make games centred around their latest releases, such as Walt Disney's

National Treasure

. "The trick is reaching critical mass," says Small. "At Amazon, Jeff Bezos was losing $20 on every book he sold, because to get market dominance quickly he had to spend a huge amount of money on advertising... That's exactly what we did, and it's beginning to pay off."