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.