Region Focus: Berlin

[This feature was published in the June 2013 edition of Develop magazine, which is available through your browser and on iPad.]

“Paris is always Paris, and Berlin is never Berlin,” so said former French culture minister Jack Lang in 2001, referring to how rapidly Berlin changes.

Today, the case remains the same, in that everything is different. The idea is that as soon as any attempt to summarise what defines Berlin has been orated or written, the city has already moved on.

The home to 3.5 million does have consistent elements; it has long stood as an economic stronghold, famed for its cultural diversity and youthful atmosphere. But its games industry figureheads are certain its dynamic state is the city’s greatest forte.

“Berlin is changing on an almost-daily basis as it tries to catch up and rebuild its image as a world-class cosmopolitan city, with two halves rejoined,” offers Dr Pascal Zuta, CEO of the European wing of MMO publisher Aeria Games.

“Part of this change includes encouraging growth of industry here. Berlin has come a long way in the last twenty years, and the gaming sector’s growth is one of the most exciting changes to this city’s image.”

Zuta’s mention of a city making two halves one whole is clearly a reference to the Berlin Wall – built from 1961 and dismantled back in 1989. Away from Germany, it’s hard to imagine after nearly quarter of a century that the Wall still casts influence, especially in an industry like games. But it’s clear the hangover of the 96 mile long barrier still has a part to play, and curiously, in its own way it has a positive effect.

ROOM TO GROW

“Berlin has a very dynamic web entrepreneur’s scene,” explains Kai Bolik, CEO of giant social and casual developer and publisher GameDuell.

“During the last years the capital region developed into a real start-up hotspot; the Silicon Valley of Europe as it is already called. The basis for this development can be understood as a long-term result of the fall of the Berlin wall. It resulted in abandoned buildings and many open spaces for creative projects.”

Subsequently, and in tandem with the appeal of Berlin’s reputation as a party town, the city attracted young talent from other parts of Germany and from abroad, which accelerated the development of this multicultural melting pot.

“This development has been a catalyst for online games and other creative industries here in Berlin,” continues Bolik.

The result is a place packed with creative outfits, with a games development industry that is presently enjoying something of a boom. At the same time, service and technology companies are also moving in on Berlin, attracted by the locale’s fertile development sector.

“Other than Hamburg, Berlin has shown a vacuum for many years when it comes to online and mobile game companies,” states Alexander Piutti, CEO and founder of free-to-play distributor GameGenetics.

“This was exactly the reason for our decision to set up shop in Berlin.”

Having decided it would be tough to compete for talent in Hamburg, as the area boasts so many high profile studios such as Bigpoint and InnoGames, GameGenetics decided Berlin offered more opportunity and less competition.

“Berlin has picked up speed quite significantly,” says Piutti of the city’s changes since his company set up shop.

“GameGenetics has been able to attract a lot of talent, especially native speakers in key languages that we need to support our partners across the globe. In general, Berlin as the online and internet hub of Germany – if not Europe – has come a long way. Some 400 start-ups today have chosen Berlin as their home, many of which are truly international in nature.”

Clearly, then, Berlin is going from strength to strength, and almost unanimously, its developers are confident the boom will only gain momentum.

TAKING TO THE GAMESTAGE

“Today we are in a state of a booming tech and start-up industry in Berlin,” confirms Michael Liebe, project lead of the Deutsche Gamestage series of events and local games industry networking expert.

“As there was no bigger industries in the region before and shortly after the reunion, people had to event their own jobs. There is no big publisher in the region, so there was no such ecosystem as you have it typically in other video games hot spots.

“People had the necessity to find other means of monetising the creative output. So it fits – and may be typical for the region – that modern distribution platforms for browser games or mobile games were established here.”

As a result of companies of every kind leaping to address the opportunity of the newly blooming Berlin games hub. Thus, another strength the city is developing is variety, as Johannes Rolf, director of performance marketing at locally based HitFox ad2games reveals.

“Many different companies which are working within the same ecosystem come together in Berlin and this is a big strength of the games development sector here,” says Rolf, whose team specialises in games-devoted performance marketing.

“We have very talented and creative developers working on mobile, online and boxed titles, localisation studios, sound engineers, publishers, SaaS providers and companies like HitFox ad2games that specialise in the marketing of those fantastic games. Berlin offers everything you need when you want to work in the gaming industry.”

Put like that, it sounds like Berlin has passed the tipping point for an ecosystem to flourish and established the critical mass needed for a near-autonomous development community.

The problem with booming, creatively strong and multicultural cities is that they quickly become expenses places to live, from London to New York. But that isn’t the case with Berlin, where the balance of cost of living and quality of life favours the frugal.

“I believe the strengths of the Berlin games development sector are the low cost of living, this sense or feeling that Berlin is turning back into a centre for learning, developing and all things art and culture in general after a long absence from the stage that is the global theater, and finally, the push and pull of all the young people from across Europe who almost seem to be rushing into the city just to start-up, rise or fall, and then do it all over again,” says Philipp Willers, MD of indie developer SlipShift.

SPOILT FOR CHOICE

The result of that appealing mix of creative variety, low cost of living and blossoming business is that increasing numbers find themselves compelled to work in Berlin. While, like any city, the German capital faces competition from across the globe, for now at least, local developers are finding themselves spoilt for choice when it comes to recruitment opportunities.

“The city itself is known as a hub for games development and publishing in Germany and it Europe as a whole,” asserts Aeria’s Zuta.

“Its relatively low cost, high standard of living and international denizens, as well as a large English-speaking population, make it an attractive city for the kind of people we like to employ.”

“From our experience Berlin has a huge advantage over other cities like Hamburg or Munich; and that is being Berlin,” adds HitFox ad2games’ Rolf in agreement.

“Many people have fallen in love with this city, and more and more are attracted by it. Our team is very international and English is our operating language. This allows us to reach out to a huge number of talented people from all over the world who are already based in Berlin or willing to move here.”

All those extra staff only add to the growth underway in Berlin, which, as that former French culture minister pointed out, is changing as much now as ever. But to present the urban sprawl as a place without challenges would be inaccurate.

A NEW ERA

While games developers have practiced their art in Berlin for many years, much of the focus when locals discuss their games industry is on the new; fresh talent, recently formed studios and thoroughly modern business models. Yet there’s always more to the story, and Berlin has its problems.

“Berlin has to be able to attract more heavy hitters as senior talent, now and in the long-run: seasoned experts in their respective fields when it comes to game development, marketing and IT for instance,” says GameGenetics’ Piutti.

“The local industry is very motivated but still quite young. Over the next years, the ecosystem here needs to show it is able to produce a few more fascinating gaming companies. I trust this is possible.”

In other words, Berlins’ new wave of ambitious games makers and supporting organisations need to prove their worth, which is no easy task in an increasingly competitive, unpredictable business.

And, like anywhere, Berlin struggles with the problems that face studios globally, such as competition in new spaces from the industry’s old guard. But in a place where the new kinds of games and platforms are the sector’s bread and butter – such as social and free-to-play – that could be particularly difficult to solve.

“I don’t believe this just applies to Berlin, but we seem to be moving towards a phase of consolidation and also a phase were a lot of the old, big players are moving into the market space that is online, mobile and all things social,” offers SlipShift’s Philipp.

“This is both an opportunity to grow and a threat to existing studios; studios that might have gotten too comfortable in their particular niche of the market. The challenge is Berlin-specific only in so far as the concentration of small studios here is higher than in most other cities.”

STRUCTURAL IMPROVEMENTS

Perhaps more pressingly, there’s another struggle for hubs that thrive on their youth and contemporary savvy.

Arguably more vital that service companies and tools providers being local, any industry nucleus undoubtably needs enough local investors, events and collaborations to oil the gears of its business machinery. And there, say some, Berlin struggles.

“We need even better networking infrastructure, more programmes to support international expansion, and most of all, better financing infrastructure,” claims Liebe.

“The German banks are still afraid of the dynamics the video games industry has and hesitate to invest in game companies. Also, more efficient immigration policies would help to find the appropriate talent for international game companies.”

But it’s not just the banks and border control that need to up the ante with regards to recognising the games industry. While some told Develop they felt well supported by official bodies in Berlin (see panel ‘The Local Perspective’), others insisted more assistance is needed.

“Several larger regional associations try to support the games, web and media industries the best they can,” puts forward GameDuell’s Bolik.

“But still, the games industry in Germany and in Berlin lacks a serious commitment from the political sector. Although some politicians seem to get more aware of the economic and technological potential and impact of games, parts of society still do not recognise games as serious business, but rather as potentially harmful for youth.”

It’s a problem that spreads its wings way beyond Berlin, but fortunately, the tables are beginning to turn in the city. Organisations like Berlin Partners and Investitionsbank Berlin are helping push the business into the forefront of the minds of politicians and decision makers.

Elsewhere, the local educational establishments are also making progress with supporting the region’s sector, even if they cannot match the talent influx from outside of Berlin’s boundaries.

“We have several media and game design academies here in Berlin,” says Bolik. “Some regular universities also offer programs in these fields. So we are not lacking hungry junior talent, but everybody competes for the limited pool of the same senior professionals that can bring us to the next level.”

LAND OF OPPORTUNITY

Whichever way you look at Berlin, it offers ample opportunities, and it’s hard to refute the region’s increasing status as a bona fide games development hub.

Berlin may never be Berlin, but it is every bit a place where developers’ ambitions can become reality.

The local perspective

GameGenetics’ rise typifies the Berlin games boom. We speak to its boss Alexander Piutti

GameGenetics offers a typical example of a company harnessing the booming Berlin games development hub.
Founded in 2009 the outfit is a distributor of free-to-play games. GamesGenetics enables games publishers with media plans and distribution power to market their products more effectively, so as to speed up their global growth.

Today, it works together with high profile publishers such as Kabam, EA and Ubisoft, and boasts a portfolio of 450 browser and mobile games available in over 30 languages developed by a team of 180 development staff.

And from his position as founder of a thriving games business established relatively recently in Berlin, GameGenetics CEO Alexander Piutti has seen first hand how the city’s games business start-up culture has blossomed in recent years.

“It took a while to see Berlin’s energy as a start-up ecosystem unfold,” he explains.

“Three things have played a major role for this to happen. Firstly, the city has become very attractive for local and foreign talent given its diversity and melting pot atmosphere; secondly the city has remained very affordable in comparison to other European hubs – you can enjoy a great standard of living for relatively small money.

“Finally, the state of Berlin has supported all along. Think for example of media.net’s role to act as a fantastic umbrella for entertainment companies and IBB’s role to provide financial support or significant subsidies – which GameGenetics thankfully also benefitted from €1 million in subsidies.”

Piutti asserts that venture capitalists and business angels have also played a vital role in fostering Berlin’s development.

www.gamegenetics.com