Trouble in the gaming industry: gameservers.net shuts down

29 March, 2009 (13:59) | Game industry

Days after my Trouble in the gaming industry blog post, gameservers.net announces they stop their gaming activities. 

The Gameservers.net team regrets that the playing joy at our website will come to an end. We have decided to put an end to our gaming activities so we can focus on our core business. We will quit gaming and focus on our hosting activities again.

Gameservers.net, owned by Leaseweb, is no more. The announcement  claims the economic crisis didn’t influence this decision, a claim that could very well be true. Gameservers.net had a big decline in their customers base over the years, the company never paid attention to gaming clients as their core business (dedicated servers) grew rapidly.

Gameservers.net was and still is a very popular online gaming platform. However we had to decide to stop our gaming activities. Current economic developments are not part of that decision, not at all. Gameservers.net has a sound and healthy client base, with very loyal customers who appreciate a stable and speedy gaming experience, but these activities are not reconcilable any more with our other activities in the market.

Their website still shows a game server counter with a 500+ count, while other statistics show less than 250 game servers were online. This decline is clearly visible in their statistics:

Gameservers.net decline in players

Gameservers.net decline in players

I believe Gameservers.net could have been one of the bigger GSPs if only they had a full time staff, a decent programmer, a good support team. The company isn’t out there. No one knows the people behind the company, the support team is hardly reachable, their forums are a mess. In 2007 I met the management team of Leaseweb, a highly diverse team with professionals. They know their business. If they would have found someone to run Gameservers.net, it would be a multi-million addition to the company.

In talks with their management, one of the founders of Gameservers.net made a nice comment: “We have so many people. We can just put some puppets on this business and grow larger than you’ll ever be. There is no difficulty in that…. “.

Beginning this year Hans Vos briefly worked for Gameservers.net. Hans, owner of Dutch small GSP ClanHost, refused to comment on his work at Leaseweb even when rumors grew stronger. His exit was another mystery. Too bad, Hans showed with Clanhost how he builds a small business. It’s quiet, sometimes too quiet there, but clients appreciate a company still being around after 5 years in business, sad but unique in this market for such a small business. However, the same story as with Gameservers.net applies to his company: they both claim to do good business, yet their websites are horrible outdated in content, their forums show recent activity in mid 2007.

Isn’t it strange how many GSPs go out of business? The market changed over the years. It used to be similar to the budget web hosting market: new companies enter the market every day. Nobody knows the top 10 companies, no one knows how many providers are out there. Gaming changed into a market with international competition, the bigger providers are known and a small number of local providers compete for the lower end of the market.

One may wonder if small GSPs can survive the battle. If you cannot invest in technology, you’re out.

Comments

Comment from eagle
Date: March 29, 2009, 3:14 PM

It’s a shame to see them give up. In all their history they’ve never had a redesign of the website and only for past few years a somewhat advanced control panel. The company thrived on the early adoption of the business, the large community hidden on the forums and, mostly, great support that kept long time customers. I wish I was still there to prevent this. It’s clear that LeaseWeb’s agenda is law.

Comment from Ramon
Date: March 29, 2009, 3:17 PM

I think a large problem is a lack of dedication at a lot of small hosts. It’s simply a hobby to get them through high school. People these days have 5-10 servers physical servers and they’re calling themselves “one of the top providers in Europe”. I’ve had clients ask me: Is it true that Company XX is the biggest gamehost after you guys in the netherlands, they have over 60 gameservers!”

As stewie mentioned before in his previous article(s): You need to distuingish yourself to stay ahead of the competition in this market. A limited number of people will pick their host based on price alone. Up untill fairly recently this was the sole reason on which people picked their host.

We’re seeing a difference now though, word of mouth carries more and more weight, people are willing to pay extra if the service they are getting for that justifies the extra costs.

Starting a company is a piece of cake. Getting those first 10-20 clients, also a piece of cake. Being able to provide a service that lets clients stay for 4-5 years is a whole different matter and that’s where most hosts fail in my opinion.

We have had (and I’m not joking here) clients of competing hosts come to us for gameserver support because their own hosts couldn’t/wouldn’t provide decent support.
I mean seriously? If your support is actually THAT bad that clients resort to asking your competitor for help, that should be the point where you SERIOUSLY have to start considering if your business model is ok.

This is just one of the many crazy examples I’ve seen with my time at i3D.net. I’ve seen 13 year old apply for a job stating they’ve been working for one of our competitors for 2.5 year already. One of the bigger hosts at that I might add (which, funny enough had to close his doors last year). But come on, support from 11 year olds? You can’t expect an 11 year old to stay professional when talking to an angry client or to be able to offer proper technical and/or sales support.

So yeah, if there’s one thing I’ve learned the past year here at i3D.net: Companies need to get their act together, gone are the days where you can grow on low pricing alone, we’re not entering the era where clients go for professionalism, quality and stability in a provider and where pricing becomes less of factor in deciding where to go for your hosting needs.