SponsorPay Industry Interview Series #2: Michael Zillmer, Managing Director and co-founder at InnoGames

This second installment of SponsorPay’s Industry Interview Series features Michael Zillmer, co-founder and Managing Director at Innogames. Michael entered the browser games sphere in 2003 when he created Tribal Wars with the brothers Eike and Hendrik Klindworth. Today, Tribal Wars is one of the most successful browser games ever with 38 million users from more than 200 countries. InnoGames was founded in 2007 as a consequence of this huge success.

The last 12 months have been very successful for InnoGames, raising millions in new funding, reaching the milestone of 50 million users and releasing your first Facebook game. Where do you see the next steps and challenges for 2011?

In 2011, we are continuing to advance our current browser games Tribal Wars, The West, Grepolis and SevenLands, but are also setting the focus on our upcoming client games Tribonia and Bounty Hounds Online. Besides that, we are also developing new browser games in-house – at least one of them will be published in 2011.

What are the top 3 major trends in the games industry that you predict will develop over the next 12 months?
I think that the market for browser games is still in its development – there are many opportunities in the eastern world, for example. Creating platform independent games is something everyone in the business is thinking about.

Where do you see the virtual goods industry in 12 months?
Free-to-play is a great business model, not only for us as a company but also for users. They can try the games and easily find out which they like best. This is why quality of games will become even more important in the future as users have tons of different products to choose between. There is an increasing demand regarding the graphics and game design of free-to-play games. Furthermore, you have to be careful which premium features you want to implement. If you are obviously trying to rip-off users, you will destroy your own game in the mid-term. In order to achieve the best quality for our games, we are always in touch with the players. There is a strong linkage between community management and game development.

What kinds of virtual goods, premium services and monetization strategies are resonating especially well with your users?
Our payment strategy varies from game to game and is different in each market. But for every market, we have had good experiences in letting the players choose their favorite payment methods. That’s why we have a broad range of micropayment possibilities in each of our games.

What are the ratios you see of paying to non-paying users? How do monthly ARPUs & ARPPUs vary across your games?
Like the payment strategies, the numbers of ARPUs and ARPPUs vary in each game and market.

Which are the biggest revenue opportunities that you believe have still not been fully exploited?
I think we could raise our revenue by improving the cross promotional part a bit. That is why we have started an InnoGames portal which is online today in a beta version. That portal offers a single-sign up for our games – you only have to log in once to play all of them. However, this portal still has to get more features and be developed a bit further – that is why I believe, that there is still some potential to be used.

As an international publisher localized in 33 languages, do you see strong cultural differences or do users from different parts of the world largely appreciate the same aspects of your games?
What we know by now is that there are definitely some cultural varieties in the different countries, but we are still on our way to gain full experience of the taste in each market and to find out how much localization really is efficient. Besides monitoring the varied popularity of each game in the different markets, we try to find out if there are any game(play) or graphic adjustments that may have to be done to enhance its popularity. Sometimes this is done even before the launch. Grepolis is an example of this – before launching the game in the Asian market we adjusted the graphics for the game. This was done by Asian graphic designers in order to match the cultural taste. Religious aspects are also an important factor we have to think about. For example, in our Arabian Tribal Wars version we do not have any churches. Other examples are the different high days and holidays in each country we have to adhere to. It is always important to know when there are such special days, for example when we are planning a festive special event inside the games.

Where do you think the development in the mobile and tablet market is headed
are you planning to release popular InnoGames titles for portable devices?
There are great opportunities for the whole gaming industry, both in the mobile and tablet markets. These are interesting markets which we observe carefully. But as said, probably everyone in the business is thinking about platform independent solutions. However, it is not that simple to put into practice.

Lastly, apart from playing your own games, how do you spend your online leisure time? What is your favorite game?
In my leisure time, I like to play Wii, iPad games and classics like Age of Empires 2 and Command and Conquer.

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