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.

Will we see more games with the same sales strategy the coming years? Will this be the answer to piracy?

Gameserver with a large number of slots have always been very popular for regular public gameplay. Games like Battlefield 2 changed online gameplay as they allowed up to 64 players on the same gameserver. Counter Strike Source even supports 64 players, although it’s a laggy experience for most players. Big servers are more expensive, but have always been the people’s choice.

New games like Team Fortress 2 and Quake Wars have been optimized for 24 players. They both limit the maximum number of players on this number, TF2 uses serverbrowser censorship, Quake Wars has been limited in the ranked server software (unranked supports up to 32 slots). Other upcoming games have also a lower limited number of maximum players. The Unreal 3 engineused in Unreal Tournament 3, Medal of Honor: Airborne and Frontlines: Fuel of war does support 64 players but not one of the three mentioned games uses servers larger than 32 slots.

Client-server model supporting up to 64 players as provided. Also supports non-dedicated server (peer-to-peer mode) with up to 16 players.  

This specific engine does support a second networking model: a peer to peer gameserver network model that supports up to 16 players. This is primarily used on the Playstation 3 and XBOX360 version of games using this engine (ex: Gears of War).

The lack of game supporting large gameservers will be the reason Battlefield 2 will be one of the most played online FPS in the next year, at least until Battlefield 3 is released.

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.

Another part of the job is beta testing upcoming games. This is really nice, almost every big game has a closed beta, a public beta and a public demo before the full game is released.  Playing the closed beta not only gets you in touch with the developers, but it also allows you to experience the game and estimate the popularity of the game and the time and resources you will have to invest in marketing.

The number of players in a closed beta is often below five hundred. The developers, friends, family and a select group of (marketing) partners plays the game, gives feedback on special forums and plays some more. Closed betas are great for a quick debug cycle, patching does not take long given the small number of players (and servers). Sometimes big clans are asked to join the beta to test competitive online gameplay.
The public beta is great for testing the game on a large number of different hardware/software combos. In the public beta is also time for further competitive online gameplay testing instead of the usual “public” gameplay. The demo is intended for marketing as the game should be final by the time the demo is released. Usually after the demo is released, the developers move on to the first patch and the software that’s not on the cd/dvd like serverside software.

This time NY is all about business

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.

This is clearly a sign Microsoft will try to integrate the development of windows based pc games with XBOX games.

Publisher trends

Online distribution is the future: it is very useful against piracy, theft and has the ability for version control and roll-out of required updates. Valve signed deals with developers and other publishers for distribution of games on their Steam network.
EA is working hard on improving EA Link, a similar distribution model.

Microsoft is the big name in the industry without these plans. They have the foundation and knowledge to build a system like this, but it’s clear Microsoft does not try to win marketshare in the pc gaming.

Another trend is to build in statistics tracking in new online multiplayer games. EA has the Battlefield series and partnered up with Gamespy/IGN, Activision has Quake Wars and acquired Demonware for the stats processing. Valve will surely try to do the same, right now open source packages do the trick, live HLStatsX.

Microsoft

Microsoft invests heavily in DirectX development and their Games for Windows programme but does not build their own games. As the xbox console uses the same architecture and parts of the Windows OS, there are a lot of future possibilities for Microsoft to boost their hard- and software sales.

Microsoft will enable cross platform gaming on the xbox and PC in future versions, once Vista is mainstream and DirectX 10 is installed on every PC.  But in the meantime, they’ve dropped the ball and will loose big on PC gaming.