A keynote by Andreas Lober, about the German market, during the WebGame Conference 2013

1. Insights about the German market:
Hangover after the Party?
Paris, June 19 2013
Dr Andreas Lober
Rechtsanwalt / maîtrise en droit (Aix-en-Provence)

2. 2
Overview
1. Introduction
2. The Party
3. The Hangover
4. Outlook
1 432

3. 3
1. Introduction
2. The PartyThe Party
3. The HangoverThe Hangover
4. OutlookOutlook
1 432

4. 4
Introduction
About me:
• Freelance gaming journalist (since 1991)
• Studied law in Tübingen and Aix-en-Provence
• Lawyer (since 2001), counsel to many computer games publishers
• Founder of browser games conference / bgf (2005)
The views expressed in this lecture are purely personal.
The information presented in taken from public sources (not my files).

5. 5
Introduction
About the German market

6. 6
Introduction
2010: Bigpoint’s 100 million players party

7. 7
Introduction
2013:
• Gameforge closes Berlin office
• Travian announces redundancies
… what happened in between?

8. 8
1. IntroductionIntroduction
2. The Party
3. The HangoverThe Hangover
4. OutlookOutlook
1 432

9. 9
The Party
A short history of browser-based games (I)
1995: SOL – first browser-based game with players interacting in a persistent world
(developed in Hamburg)
1999: Runescape – early version
2000: Planetarion – inspiration for Galaxy Wars and OGame
2001: Galaxy Wars – first major German browser-based game, later acquired by Gameforge
… in 2001, Germany was a nation of game players, not of game developers!
2002: OGame – the game that made Gameforge a major player
2004: Travian – a major move towards graphics
2004: Runescape – modern version released

10. 10
The Party
A short history of browser-based games (II)
2005: Seafight – real-time gameplay
2006: Dark Orbit – Seafight taken to a space setting
2010: Settlers Online – Ubisoft entering the market
… in 2010, German browser-based game developers think that only the sky is the limit.
2011: Drakensang Online – Bigpoint successfully building on an existing brand

11. 11
The Party
Commercial milestones:
2006: Gameforge acquires French studio Nevrax out of insolvency (The Saga of Ryzom)
2007: Accel Partners acquires minority stake in Gameforge
2008: NBC and GMT together acquired 70 percent of Bigpoint (valuation USD 102m)
2009: Bot software declared illegal by Hamburg court
2010: Bigpoint acquires Radon Labs out of insolvency (Drakensang)
2010: Bigpoint celebrates 100m registered players
2010: Gameforge acquires majority stake in Frogster (Runes of Magic)
2010: bgf keynote Prof Richard Bartle: “Garden of Unearthly Delights” – the creator of the first MMOG
(“MUD”) says that the glory days are over, unless the industry changes
2011: TA Associates and Summit Partners acquire majority stake in Bigpoint at USD 350m (valuation
USD 600m)
2012: Travian acquires Bright Future (EA Sports Fussball Manager)

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1. IntroductionIntroduction
2. The PartyThe Party
3. The Hangover
4. OutlookOutlook
1 432

13. 13
The Hangover
2008: Gameforge France goes into insolvency
2011: Gameforge announces redundancies
2012: Bigpoint announces redundancies
2013: Travian announces redundancies
2013: Gameforge annouces shutting down of Berlin office

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The Hangover
What happened?

15. 15
The Hangover
World-wide search volume

16. 16
The Hangover
German search-volume

17. 17
The Hangover
German search-volume

18. 18
The Hangover
• Entry of majors does not seem to hit the browser-based games companies badly
• Interest in games declined, but this has always been the case
• However:
• Viral marketing does not work anymore (is “pay to win” to blame?)
• User acquisition costs exploded (too many games, too many companies, too many of
them with too much money to burn)
• Not enough new “hit games”
• Companies were geared towards quick growth, not to a market going sideways

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1. IntroductionIntroduction
2. The PartyThe Party
3. The HangoverThe Hangover
4. Outlook
1 432

20. 20
Outlook
• Browser-based companies are still very strong and have a huge userbase
• 50%+ margin will no longer be realistic
• The party can go on, but ...
• They need a mobile strategy
• They need a brand strategy to promote and to monetize (cf. Settlers, Angry Birds)
• They need a product strategy
– Browser-based games once filled a niche (complex, non-synchronized strategy games)
– Then, they were the driving force for f2p – now f2p is everywhere, no longer a USP
– Developers will have to see what makes sense to do in the browser (and where a browser-
based game just cannot compete (yet) with a client game
– Maybe too quick a jump from 1st generation (non-synchronized startegy with static
graphics) to (attempted) 3rd generation (real-time full 3d action such as Chaos Cars or
Poisonville) without using all the opportunities of 2nd generation (such as RPG and RTS
strategy)
– Product design vs. monetisation design – quality users vs. quality games (Garden of
Unearthy delights)

21. 21
Outlook
What does this mean for you?
• German publishers are in need of great content.
• If you have great content, what are you waiting for? They still have tremendous marketing
power.

22. 22
Contact
Schulte Riesenkampff Rechtsanwaltsges. mbH
An der Hauptwache 7
60313 Frankfurt am Main
Germany
(t) +49 69 900 266
(f) +49 69 900 26 999
Your contact:
Dr Andreas Lober
andreas.lober@schulte-lawyers.com