Growing Pains

Companies are founded for many reasons, but InnoGames may be alone in owing its existence to a lack of variety in German television programming.

One evening early in 2003, Hendrik and Eike Klindworth and their lifelong friend Michael Zillmer were spoiling for something to do, and the television schedules offered little in the way of excitement. They faced the dubious prospect of providing their own entertainment, so, with the help of numerous bottles of cold beer, they decided to invent a game. The result was Tribal Wars, an online strategy game in the mould of Ensemble Studios' Age of Empires series, only playable for free, through a browser, and with multiplayer as an integral part of the experience.

In trying to build a game that their friends could access quickly and easily, Eike, Hendrik and Michael had unwittingly entered what would prove to be one of the games industry's major growth markets. Within a few weeks of removing password protection their servers were dangerously crowded with enthusiastic gamers.

"The players came and came," Hendrik recalls, "and then we had to close it again, because 4000 players, 5000 players was our server capacity at that moment."

"We did all the game development and supporting the game as a hobby project, but it became bigger and bigger. At the end of 2005, it just took so much time that we decided we had to focus on either going to university, or focus completely on the game."

We have a smaller number of games and a higher number of players per game, which is related to the fact that we focus so much on each individual product

"The chances were good, and it was already profitable at that time, but that decision was the moment where we became a company."

Incidentally, there was a fourth person involved in the creation of Tribal Wars; another childhood friend who decided that the risks involved with launching a game company were simply too much to bear. Instead, he opted for what, in 2005, when InnoGames had a single product and 50,000 players, must have looked like security and stability.

Today, standing in the company's sleek, glass-and-steel headquarters in Hamburg's rapidly modernising riverside landscape, that fourth, errant friend would be forgiven for cursing his own sensible tendencies. InnoGames now has almost 200 employees, half of whom have joined the company in the last 12 months, and Hendrik Klindworth promises that there will be further growth in 2012.

InnoGames may be a free-to-play browser developer as much by accident as design, but the level of success it has achieved since is no coincidence.

"For us it felt very natural to make it free," Klindworth says. "In the beginning we felt it was almost like an internet service we were providing. Everybody expects everything to be free on the internet, so for us it felt very natural to make it free from the beginning."

"In some ways, of course, we always look at the market and at what is going on. I think we have a different focus than, for example, Bigpoint, which does a lot of action-based games. We have strategy-based games. We look at what others do but we know where our strengths are."

Certainly, Bigpoint is a useful point of comparison; it is, after all, another Hamburg-based company making millions from free-to-play browser games. However, the differences between them are more telling than these surface similarities indicate.

Bigpoint has more than 200 million registered accounts spread across a portfolio of more than 70 products; InnoGames has 70 million registered accounts across a portfolio of just 6 titles. According to data from ComScore, in June 2011 Bigpoint had 2.4 million players investing 7.4 million hours in 71 games; in the same month, InnoGames had 1.1 million players investing 4.1 million hours in five games.

The picture that emerges is of two very distinct approaches to the same market, and Klindworth is very clear about the merits of the path InnoGames' has chosen to take. By building a smaller, more focused portfolio of high quality games, and involving the community at every stage of a product's development and post-release evolution, InnoGames is trying to eradicate the high churn rate that a company with 70 titles simply takes for granted.

"We have a smaller number of games and a higher number of players per game, which is related to the fact that we focus so much on each individual product," Klindworth says. "We put a strong team on each game, focus on quality. We don't want to rush out with 20 or 30 games, but have enough energy for each game to make it a success."