Browser Games Forum 2008

I was visiting the BGF 2008 last weekend and boy, I was in for a surprise. The conference started 2 years ago and was merely a hobbyist show. Browser games (or BG for short) were considered not being real games, they were undervalued by game developers and publishers alike until recently.
This time some big news overshadowed the conference. Not only did Bigpoint, one of the biggest BG publishers, sold their majority for 100 Million US$ to NBC Universal, but also Gameforge, the other "biggie" announced a planned turnover of 100 million euro ... per year.
The result: many investors and high class business angels flocked the show floor to find the next big thing. BG's did seem to have grown up, but it was confirmed later on in the individual sessions. Let me summarize some of them.

Heiko Hubertz,founder and Ceo of BigPoint showed some market data which showed impressive numbers and business models. They are a lot more open about numbers now since the sale, as it seems they now can proof that the BG market is serious and growing fast. Reaching over 40 million players and doing millions of Euros revenue with micropayments seemed far away a couple of years ago. Heiko pointed out that the market seem get saturated so that budgets of games rise and games need to be found to distinguish yourself.

One of the starters of the BG market started off with a big “nono”. Siegfried Müller, founder and Ceo of Travian GmbH showed details how their first attempt to work with a publisher failed and listed some facts how the legal case was going because of this. And they showed names as well, not something you want to do unless you are a player --- which they are, but still not something I would do.
Travian is their main game which has been launched impressively into 48 countries in 40 different languages (!). Their company has grown to 70 people, all without any investors or banks. This shows how organically a BG company can grow with their customers. Travian is running on 850 Linux servers in various hosting locations and is one of the rare products also launched in China and Asia. They didn’t tell any revenue though but I know it’s up to several millions per year.
If you check one of their Travian sites you can see the number of players and click through each of the 40 countries to add them up. Calculate 3-7% paying users and you might get an impression of their monthly revenue.
Tung Nguyen from Nexxter showed some examples from China were the market grew over night to extradimensional proportions. Within 2 years the market for BG’s grew to millions of players and revenue. The market seem to copycat the German model and the opinion about the German companies are high due to this. The market data he showed was sure impressive. Entering the market however is still difficult and just a few publishers managed to do so.

Not really a BG publisher but they run the oldest client based MMO from germany: over 12 years in operation their Tibia RPG is still running healthy and well and generating over 6 million Euros revenue per year with 135.000 users per day. They have a mix of subscription and micropayment model and it seems to work for them: they boast over 40 employees and are preparing their next game launch.Their mobile version of the game is also working quite well and seems to be the first real mmo on mobile devices.

Just a recent announced company to have several Web 2.0 companies underneath, among them BG’s. It wouldn’t interest me a bit but the founders are some of the high end web 2.0 investors on the German market, having exited half a dozen times successfully and are invested in over 50 internet companies. They play with the idea to get the reach to the customer by combining several internet companies under one roof.
Lukasz Gadowski showed the audience how to found, finance, grow and exit an internet company. The talk was very investor specific and might be too much for young BG student teams, but nevertheless showed very well the investor perspective behind their plans.

Smaller Ventures
There were a lot of very small teams on the conference. I talked to a couple and was very impressed. One student has a game out there with over 100.000 players, but only in Germany. He is living from his venture and wasn’t really planning to internationalize it although a lot more money would be there. He is having fun with his community and game, "why wasting it for going big".
Another team has an online soccer BG in Germany with more than 100.000 regular customers and do plan to go international, but don’t want to loose their focus on their home community.
Check this: two examples of very small teams having reached millions of players and boasting 100k online, playing customers. Now extrapolate this to the big players in Germany and you might have over 100 games just being operated in Germany, some of them international, but most of them profitable.
The big players once announced that Germany has a 60% market share in Browsergames … Worldwide! I do believe them because just adding up the numbers and comparing to other countries does show this.
However: other countries don’t sleep. I noted a lot of new BG’s in the eastern states, Benelux and other countries as BG’s allow one thing: to publish worldwide without the need of a publisher. Did you notice that the big top game publishers seem to ignore that market?

There were talks from BG operators from UK, Korea, USA and Russia. Basically they said all the same: Large market, huge growth, but they are all in awe of the German publishers.
So there it is. One gaming market in the hands of Germany and no one knows it. It reminded me what I was saying to the German development community 4 years ago: The single player market will be niche in a few years, you need to go online.

How many of those developers showed up on the BGF conference? Less than 4 …
So I am looking forward to the BGF 2009, I be tit will be a lot larger, with a lot of new big players out there, and the investors and business angels will flock around the rising stars and talking real money.


How Game Interface Comforts can destroy MMO's

Community is about communication, that’s obvious right? Richard Bartle in his book "Designing Online Worlds" clearly defines the stages of communities and one of them stands out: community of interest. The members share a common interest and hook up together.

In a MMO it is important that players get connected real soon as they meet people and start friendships. This will be the major reason why they stick to the game later on. If you fail designing your game to support this people will leave with less resistance compared to players who already met friends.

Now lets see what starting players communicate most: questions either about the game mechanics or the game content. The first is quickly resolved when they learned the game and its functions, the second however never stops unless they played through the game's content.

Players ask where a mob is, how a quest is being solved or simply if people want to help them for particular content. Other players will gladly help or players with the same quests team up as they share the same interest. And quickly bonds are forged and friends are met. To design your game to enhance meeting people is key to build up a strong bonded community so people won't leave the game behind easily.

Now game designers think in game mechanics, not in community mechanics. That’s the first mistake they do and unfortunately the negative feedback is coming very late to correct it.

Wrong game mechanics get immediate feedback and correction is mostly easy. Community building mistakes are much harder to read and to analyze.


Lets look at an example. Warhammer Online (WAR) has the tome of knowledge and an intelligent map. Both will tell you where to go for each quest and what to do exactly. In fact the map marks the areas of quests you accepted and also tells you which quest to finish in that region. That eliminates most of the community connecting questions people will ask. That is the number one reason why the chat is so silent in WAR besides the chat interface design.

The consequence: people will not find online friends as easily as in other games. In other words the user interface comforts is limiting the community growth of the game.

Note that World of Warcraft does not support any kind of that feature but there are add ons who do that. But their use is entirely optional and you need to install an Add On to make it work, a major obstacle for starting players. As soon as those players have advanced knowledge they are fit to use it, but at that point they met enough people online to have connected and stay.

So listen designers: carefully consider your game design what it does to community growth and stickiness, not only in term of game mechanics.


Gstar Coverage

I can't read Korean but their coverage of the GStar KGC Konference is up for most talks, among them mine:

Some of the slides are pictured too


Future Interfaces

Minority report sparked the new generation of touch interfaces, based on research art various US universities and research sites. The prototypes usually were slow, even the windows tablet Bill Gates showed wasn't really up to the performance. This new one however showed how far they progressed so that they are close for us to experience:

g-speak overview 1828121108 from john underkoffler on Vimeo.


Gstar Seoul - Korea

I am being invited to the GStar show in Seoul next week to talk about the European MMO market and its differences to the Asian. I nearly canceled it but was too intrigued to travel to the future of online gaming. The Korean market seems years ahead of us and their experiments in online games, social networks and online advertising are too interesting for me to pass.

Imagine: Korea has over 3500 development companies doing online games. I guess that’s more than all games development companies combined in USA and Europe. Their problem is market saturation and they need expansion space.

Until today they haven’t learned how to enter foreign markets, as we haven’t learned to enter the Asian markets. Now what would happen if they learn how to do successful games in their market and ours? With their experience, development power and money they would swamp and conquer the online market here. Blizzard beware, there is a huge attack incoming!

I try to get as many impression as I can and share them with you. If you know any specific game you heard about but isn’t well known here let me know and I check it out over there.


PC Gaming is Dead - NOT -

Console sales are up, console game sales are up, they will brake world records this christmas as over 90% of them are sold during this period. From history I know that in the last 2 years of a console life cycle the hardware will sell as many units as they sold in the first 3 years. 

Thats worrying a lof of PC games developers who didn't get their foot in the console door as the unitsales of console games are millions instead of hundres of thousands as on the PC.

But do not worry. For one console games are a bitch to develop, its very expensive. Thats the key to PC games: dvelopment is much easier and flexible, but of course the PC platform sucks as its a moving platform compared to the stable hardware of consoles.

But don't fret, the discussion that PC games are dead is repeating itself every 5-6 years when the console lifecycle is at its height. It never happened though and it won't change as far as my 20 years experience goes. And I heard this discussion 3 times already.

First: the console will show its age end of 2009 and too much software on the shelf will limit sales of the multi million dollar budget games. Additionally the hit games of 2005-2008 will be on the shelf for half the price hurting sales of new developments. And as the platform doesn't change the games are still in perfect shape to be sold.

At that time the PC will be more advanced than the console generation and offers more power to experiment with game content. The consoles will be pretty much limited at that point.

Additionally the new console generation will be anounced to developers and publishers and to be the first on the platform at launch they have to start 2 years ahead ... that means 2009. As the investment in those launch titles is very high the key teams will abandon the current generation of the consoles or move the development to "cheap" locations, lessening the quality. During that time the risk of publishing a new multi million dollar game is so high that experienced publishers will stick to sequels. As we know sequels never sell better than the original on the same platform. All this together will drop the console market to its knees and will put the kiss of death on them as soon as the new generation launches.

What happens to the PC meanwhile? We will see new games, genres, and indy development taking place which makes the PC ideal for a lot fo game types. When the console shelf space is flooded with budget software and sequels the PC shows where the impulses comes from.

So the PC never dies. The trap you can enter is if you do what everyone else does. No one is interested in a RTS when you can't beat Blizzard or EA's frenchises. If you can't don't do it. Online is key and a lot of niches are still open. Think different, look at the large picture of the games market, not on genres and games which are already on the shelf. Think counter intuitive. If you currently see a large wave of good shooters don't develop them. Look at what is missing on the shelfs but sold in the past 5 years. Thats key to your product strategy.

For more information check out the talk I did years ago on the industry life cycle on www.teut.net