SponsorPay’s Industry Interview Series continues with Nils-Holger Henning, CCO and CMO at Bigpoint. Nils joined Bigpoint as Chief Communications Officer (CCO) in 2005 to establish the finance department and the company’s vast network of media partners. In addition, he is active as a company spokesperson and regularly gives keynote addresses at major international industry conferences. With more than 700 employees and 190 million registered users worldwide, Bigpoint is one of the leading companies in online games. The company recently received an investment of over $350 million from Summit Partners and TA Associates.
Nils, where do you see the virtual goods industry in 12 months? What are the major challenges or hurdles for Bigpoint?
The virtual goods industry is developing extremely well and I am sure that this is going to be the case in 12 months’ time as well. The challenge for Bigpoint is to keep up with the major trends and innovations in the gaming sector. Bigpoint, therefore, is strongly focused on cross platform gaming, meaning that users can play the same game either on their PC, their smart phone, or on their tablet PC (iPad). Apart from that, it is crucial to retain and grow our company’s knowledge base. More specialized employees need to be hired. Further, key markets have to be identified and focused on especially when it comes to emerging or potential countries.
What are the top 3 major trends in the games industry that you predict will develop over the next 12 months? Which current/previous trends are likely to survive the year?
I think the three major trends are:
1. Rapid growth in the browser gaming segment (focusing especially on casual games like Farmerama or Zoomumba, core games like Dark Orbit, and AAA titles like Battlestar Galactica Online).
2. The free-to-play business model will aggressively penetrate the traditional market. This trend is obviously connected to the growth of the browser gaming industry, more people will start to pay for virtual items.
3. Cross platform gaming: In the near future, people will not only play on their PC but also on their smart phones and/or tablet PCs.
Speaking of free-to-play models, what are the ratios you see of paying to non-paying users? How do monthly ARPUs & ARPPUs vary across your portfolio of games and apps?
On an average 10% of all users who play our games actually spend money on virtual items. Unfortunately, we do not comment on ARPU and ARPPU figures.
What kinds of virtual goods, premium services and monetization strategies are resonating especially well with your users?
Virtual goods like special gasoline for your car or cannonballs for your pirate ship have always performed very well for us. It is also very important to attach a value to virtual goods, either due to special functions or a unique and limited appearance. We have a very smart analytics department that monitors the performance of every virtual item we sell, and constantly optimizes the inventory to perform better.
Which are the biggest revenue opportunities that you believe have still not been fully exploited?
We think that the free-to-play business model really is the biggest revenue opportunity of the present and the future. The most important factor is that people enjoy our games and stick to them for a very long time. That’s why we focus a lot of our energy into developing challenging and fun gameplay. Users will only purchase virtual items if they think they are really worth it.
Recently, you hired 37 former employees of US developer ‘Planet Moon’ – are you happy with Bigpoint’s progress in the US so far? Where do you see the main differences between the US and the European market environment?
Yes, we are very happy with Bigpoint’s progress in the US. We have managed to grow from only five to almost one hundred employees in less than a year. We have also published our first game that that was developed entirely by our team in San Francisco (Ruined.com). Being in the city, so close to Silicon Valley, and surrounded by so many gaming companies helps us spot trends quickly. In terms of differences, we think that Europe prefers strategy games (online), whereas the US leans towards action-oriented genres (consoles). Europe has led the micro-transaction market trend; in fact, Bigpoint introduced the model to the western world back in 2002. The US has traditionally preferred subscriptions and retail sales. The US leads the way with social networking, whereas Europe opts for “independent” gameplay. US publishers typically deal with one language; Europe understands localization challenges – and opportunities.
Bigpoint will launch its hit games like Farmerama for mobile platforms. What are the challenges of bringing these games to Android and iOS? Will there be major changes to the gameplay? And, in general, where do you think the development in the mobile and tablet market is headed?
The challenge of launching games on mobile platforms is to offer the same gameplay features as in the browser. We are planning to completely convert most of our games, which means that users can play with their normal log-in a full version of the game. There won’t be any major changes in the gameplay. We are convinced that cross-platform will be king in a short while! People will play on many different devices like smart phones, tablet PCs or browsers. That’s why we are strongly focused on cross platform development at the moment.
Apart from playing your own games, how do you spend your online leisure time? What is your favorite social media app?
In my private time I like running, going to the gym, and maintaining overall wellness. I also really enjoy spending time with my dog. My favourite social media app is “meetOne.com,” a great discovery network to meet people around the world. I also use a lot of business applications, like iPhone check-in for airlines, flight and hotel reservations and mobile phone business card scanners.