At the beginning of 2009, Goodgame Studios had 10 employees and was about to start developing its first game. Today, it is one of the fastest growing companies in Germany's crowded free-to-play development scene, with more than 28 million registered users across a portfolio of 9 browser-based social games.
When I visited the company's Hamburg office recently, co-founders Kai and Christian Wawrzinek - both doctors, the former in law, the latter in dentistry - were preparing to welcome a crop of new employees that would send Goodgame's headcount past 160. I'm told that, by the end of next year, that number will reach 250.
In this exclusive interview, Kai and Christian Wawrzinek discuss their unconventional route to game development, the decision to develop social games outside of Facebook, the value of recruiting from outside the games industry, and why start-ups need to focus their efforts to achieve success.
We had a very nice cash-flow, and that was a good base for more things to do. We thought, 'Okay, what are we going to do? The business model works, but it would of course be much better to put more capital in it and make it bigger.' Back in those days - it was the beginning of 2009 - we thought nobody would give us the money for it. There was the financial crisis and people weren't investing in anything. They were really afraid.
We knew we had to come up with something different, and we were sat there with this really nice base of game portals, and we noticed that all of the Flash games we had there - something like 2000 on one site - all of them are non-monetising. It was all ad-revenue based, the whole business model, but we saw we could keep the ad revenue and put some monetising Flash games onto those sites. There were no games like that back then, but we thought we'd give it a try, and we then started programming our first online game.
Yeah, we thought the game would have a really good chance of monetising. Also, the rules are very clear; balancing that game is not as hard as balancing an advanced browser game, so we thought it would make an interesting first try.
If EA and Ubisoft see that browser games are becoming more relevant in terms of revenue then they will move into that market
I think 15 or 20 people...
Actually, at the beginning of 2009 we had maybe 10 people or so, and we had to restructure a little bit for developing games. We needed a lot more staff, with different skills, and so we really had to build up a whole team from scratch. That was another reason we chose poker. It was one of the easiest games in terms of design and rules; it's clear what the rules to poker are, and for any other game we'd need a lot more skilled staff than we had back then.
We started a little bit that way. Actually, there's a small part that happened before that. In 2008, we were asked by Philips, the TV manufacturer, if we could make some nice-looking casual games for its [connected] televisions... They needed some easy games that could be played with a remote control, and they came to us because we had some internet portals in Germany.
So actually the first four games we developed were totally non-monetising games - one like Tetris, and Backgammon was also one of them - but we soon realised that Philips is not a good partner for that field, and especially the TV was not a good platform for building games. If you have non-monetising games on the TV it's really hard to make anything out of it.
Well, you can almost never be prepared for strong growth in a company because there are so many challenges. As it grows and grows there are a lot of things you have to structure inside the company in order to keep up the pace. A lot of people actually started in our company with an internship and within a few months they became the leader of a department - leading 10 people or so. That was challenging for us, and for them as well.
One of the reasons our company developed so fast was that we had these internet properties and gaming properties - that was a very nice push in the beginning. We could roll out the game to those properties, so we got some returns right away, from the moment that Poker was ready. That was a big advantage over other companies. If you're young and you're new and you have your project ready then you need users, but where do you get them from? Usually from advertising, but that's where it becomes really, really expensive. Our company started buying users through advertisement just 6 months ago.
We thought about it, but in the beginning we really had to focus, and that's something we continue to do. Don't get distracted by too many things, and there are so many things out there that are really interesting. We could talk about HTML5, we could talk about Unity, we could talk about Facebook, the Asian market is very interesting, mobile... There's so many topics, and you can really get lost if you try and pursue every option.
That's one of the major things we've always done in business: focus on one thing. Maybe have a small side-project and try something, but your major workforce has to be on one thing and you have to do that really, really well in order to get the market share. You have to be better, actually, than most of your competition.