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

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.

Looking around, the gaming industry isn’t doing well. Publishers have to cut costs, development studios are closing down or stopped hiring new employees. And to top it off, a large number of game server providers went out of business. In the Netherlands, our competition fell apart. We now compete with:

• Foreign companies doing business on an European scale
• Extreme budget hosters. Selling for such low prices they will not be in business in the near future
• Hosting companies doing game servers on the side, not as core business
• A very limited number of “high prices is high quality” businesses with a very low number of paying customers

So what happened?

New games

In 2008 a number of new games was released with limited support for hosting platforms. For example, Call of Duty 5 (World at War) was released as a Windows game. Only Windows servers could host this game, but the promise was made a Linux version would be available at launch or right after launch.

As a large number of amateur companies waited for the Linux release, the market was ready for the bigger hosting companies deploying the game on their Windows servers. The Linux game server software was released 4 months.
Call of Duty is just one of the many games where it benefits to run on Microsoft Windows.
People ask us often if all our servers run Windows, I can safely say only 20%  of our server base runs on Microsoft Windows.

Contractual limits

Certain games are bound to contracts, limiting the availability of the game server software. For publishers this has major advantages:

• More control over the software: this means there are NO cracked servers. Compare the Battlefield series with the Call of Duty series. CoD has major piracy issues.
• Better feedback: closed groups of hosting parties exchange knowledge to deploy the game and work around any game specific issues.
• The game is more exclusive, statistics are of higher quality. Great example: America’s Army Honor compared to Call of Duty client side “stats”.

These contracts limit the number of game server providers hosting the game, thus competition has to get in before being a threat.

Amateur companies

The “Internet generation”, and more specific, the gamers are young. There is a large number of amateur companies run by minors. These “companies” exist as extremely low budget hosters. In an open market, budget customers switch easily from provider to provider forcing them to compete even more on pricing. No knowledge, no volume, not paying taxes, customer support only after school is closed, it is all very common for these companies.

They don’t last very long, but the continues cycle of new start-ups and closing down attracts customers away from legit GSPs in the market thus being a serious threat to small to medium GSPs.
In this market, you need to distinguish yourself from the competition. If you fail, you are bound to compete with the amateurs. And you’ll loose as they come and go and have absolutely no long term strategy in mind.

Illegal software

Very common in this market, especially with amateur companies, but also regular with legit companies. Software like Ventrilo is very often sold illegally. How stupid: they even advertise with it!

No diversity

Several GSPs only sell game servers. Just game servers and nothing else. That’s asking for trouble. There is a clear cycle in gaming revenue throughout the year. Easy months are from spring to fall. Can they survive? Usually not. Colocation costs, employees (if they actually have employees!) won’t settle for less salary in the summer. If business was good the year before you’ll have to pay additional taxes.

Some companies go to the extreme with their diversity. There is no clear core business as they deliver anything from VPS to VOIP to dedicated servers to shared hosting to game servers and colocation. These companies won’t make money. If potential customers don’t know what you are actually selling, why would they buy anything from you?

Looking at the current situation in The Netherlands

Almost all game server providers active one year ago are out of business. The number of active game server providers in business for more than 2 years is dangerous low. As you may understand, times are good for our company. Our business grows internationally, let’s see where we are next year.

We have seen companies being sold, shutting down, companies doing such a good business their owner works a fulltime job somewhere else. Some disappear, some go out with a bang. It is so silly you cannot find one single overview of all GSPs doing business in the country without having a dozen shut down companies listed. Customers don’t want to hop from provider to provider anymore. The market is deciding. The real powerhouses are doing major business. Times are good.

I am very curious about your opinions on my blog.

• We added new European locations: next to Amsterdam and Rotterdam, we host in Frankfurt, Paris and London: http://stewie.biz/2007/12/17/new-i3dnet-location-paris-france/
• We had our own booth on the Gameplay 2007: http://stewie.biz/2007/11/26/gameplay-2007-perfect/
• We started hosting console gameservers: http://stewie.biz/2008/01/05/frontlines-benelux-open-beta-keys-beschikbaar-via-i3dnet/
• The i3D.net Paintball event was a success: http://stewie.biz/2007/12/20/i3dnet-paintball-2007-headshots-and-more/
• We celebrated our first lustrum: http://stewie.biz/2007/08/28/our-first-lustrum/
• We signed exclusive deals: http://stewie.biz/2007/11/08/i3dnet-to-host-race-07-worldwide/
• And we go to special locations to provide our services: http://stewie.biz/2007/10/06/monza-italy-update/

What will 2008 bring?

Starting now, Interactive 3D will also host a large number of SimBin managed Race 07 practice and race gameservers in several strategic locations in Europe and the United States of America providing the race fans with optimal latency times in the game’s multiplayer mode.

About RACE 07 –THE WTCC GAME:
RACE 07 – The Official WTCC Game features the full FIA WTCC season of 2007 including all cars and tracks, as well as several new support classes and tracks from all over the world. The game also features the full WTCC season of 2006 which was included in the games predecessor RACE – The WTCC Game, released in 2006 on PC.

For the first time ever SimBin is also presenting single seater action with Formula cars. Race with the incredibly fast Formula 3000, Formula BMW and in addition also the Radical sports cars with the models SR3 and SR4.

All in all RACE 07 features more than 300 cars in 9 different classes on 32 real life racing tracks and city circuits from all over the world.

RACE 07 official website: www.race-game.org

About Interactive 3D:
INTERACTIVE 3D (i3D.net) is an European internet service provider (ISP). With over 400 high-end Dell servers at multiple international locations, a multi-langual support staff and an office open seven days a week, i3D.net aims to deliver it’s services close to the public while maintaining a high service level.

i3D.net partners with game publishers to bring special featured packed games to international gamers. On a daily basis we welcome over 150.000 gamers.

For further information: http://www.i3d.net

About SimBin:
The SimBin group is a privately owned group of Swedish companies that occupies a total staff of 70 people, consisting of 50 employees and 20 distributed consultant’s world wide.
In the SimBin portfolio you will find award winning titles like “GTR – The FIA GT Racing Game”, “GT Legends”,  “GTR 2 – The FIA GT Racing Game” and “RACE – The WTCC Game”. GTR and RACE are registered trademarks owned by the SimBin group.
For further information: http://www.simbin.com

SimBin Studios AB is the mother company, responsible for the publishing and IP rights for all productions developed within the SimBin group. SimBin Studios AB is also responsible for Business Development, Finances, Marketing, PR and administration.

SimBin Development Team AB is a Swedish game developer founded in 2003 and is a subsidiary of SimBin Studios AB. SimBin Development Team AB handles all the game productions in the group and develops games for all leading platforms.

www.simbin.com
For further info please contact:

SimBin
Magnus Ling – VP/CCO
magnus.ling@simbin.com

Robert Thorgren – IT Manager
robert.thorgren@simbin.com

Stijn Koster – CEO Interactive 3D     
info@i3d.net

i3D.net adds two additional locations: Frankfurt, Germany and London, United Kingdom. We are already active in Amsterdam and Rotterdam in The Netherlands.

Our Frankfurt location is already online for Quake Wars Ranked server clients. The London location has been added to provide better support to our English customers.

We have also expanded our serverfarm with over 100 new quadcore Dell PowerEdge servers in the last month. These servers feature 2,4 Ghz Quadcore Intel CPUs and 2 to 4 GB ECC ram each.
i3D.net continues to support it’s One-core-One-game policy: we run every gameserver on a separate CPU core for maximum performance. All ranked and PREMIUM gameservers use this unique i3D.net-standard.

Our inhouse developed controlpanel also has been expanded with a large number of new features and improved multi-lingual support.

Before the end of this year we will announce new deals with gamepublishers; i3D.net will host several new ranked games in our international datacenter locations.

We’re investing in quality and that always pays off.

Many thanks to Stefan, Rick, Mirjam, Maarten and Ronald for working with great passion and dedication.

This is a new opportunity for the company and the future is looking great! Last month we made our first steps towards hosting gameservers for the console market and it’s already paying off.

• Cross-platform enabled: play on your pc against xbox4 and playstation 5 gamers
• Integrated voice- and videochat in multiplayer games
• All games will feature online rankings to boost multiplayer gameplay
• Multi-core enabled: no more single core applications! More power for advanced AI and physics
• Paid by subscription on a monthly basis per game (pc) or platform (MS/Sony)
• PC-only games will focus even stronger on the modding community
• Apple will intoduce their own Wii-like console: casual games and technology with style
• Developers and publishers will have found a way to attract more girls to gaming: play The Sims online in a MMORPG connected to social networking sites and chat
• xFire will have to compete with Microsoft Live Messenger for Gamers
• Game publishers and news websites like IGN will try to get a spot in the console interfaces: their only PoP right now is on the internet and console gamers do no tend do browse online on their console/TV.
• Ingame advertisement will be redrawn: no more static banners, but ingame video advertisement during the pre-loading of a new round and while waiting to (re)spawn

No problem, except the website startpagina.nl used to be a website like dmoz.org and used to have quality links. Now the website is filled with links to 404 pages and companies that went out of business years ago.
And the webmaster of the startpagina subsite? He’s connected to one of the new smaller GSPs added on the site.

GSPs and ethics

More people in the gamehosting business have a complete lack ethics and this is a direct cause of the mistrust of customers in the companies. On our helpdesk this has a direct influence on the customer contact; customers think they’re dealing with a one man company, customers think they won’t have to pay the invoices and some even try to order our services to see if we deliver without being paid. Fraudulent orders are up to 25% during school holidays.

While trying to compete with the other GSPs many of the smaller companies try to look big: they say they own their own datacenter, have 10+ employees and announce they host a tenfold of servers as in reality. This messes up the customer experience so bad they distrust the complete gamehosting business. It takes great investment in customer service to convince the customer of the quality we can offer.

A year ago I wrote a column for Dutch game website Gamert. It tells the story of a GSP review website. Three months after the website went life, over half the companies listed were out of business. GPSs come and go and there is only a select group of gamehosters over 2 years in business.

Two years, what’s two years for a business?

A very good initiative is GameserverCheck.de. They offer reviews of gameserver companies by their customers, but also a “Vor-ort-check” where GameserverCheck visits the company, talks with the staff and lists all important data of the company.

The GameserverCheck website deserves an international version.

For gameserver providers (GSPs) this has a direct negative consequence on performance, quality and continuity. In the gameserver market, a company can stand out when focusing on non-price competition: distinguish your services on the basis of quality and performance of the services; examples are customer support, uptime, performance and automation. Instead of calling this a ‘marketing strategy’, it should be the companies belief, the companies motto, it’s long-term focus.
I have a strong believe our growth in market-share over the last years is a direct consequence from the heavy investment in quality of service.

Optimising in a nutshell

The quality and performance variables can be optimised, but require great investment: 

• Make sure there is always enough capacity in every aspect (hardware, software, connection/bandwidth, personnel)
• Monitor service levels; monitor uptime, continuity, wait times, support throughput, etc
• Invest in customer self-service by automation

Let’s bring theory into practice.

Read on in the next blog entry