Argh, me hearties, here be treasure!

Heiko Hubertz tells Paul Rodgers how the pirate game Seafight is making real money from virtual swashbuckling
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The Independent Online

Being a pirate isn't as simple as it used to be. In the days when captains were named after the colours of their beards, all you had to do was shanghai a crew, purloin a treasure map and make a scurvy dog or two walk the plank.

Today's online buccaneers, the sort that play pirate game Seafight in their millions, have a much more complicated task. Outfitting a virtual caravel is expensive. Everything from the figurehead to the anchor has to be bought separately. And earning the pirate gold to pay for them takes time. Lots of time.

It's enough to make an honest pirate want to cheat. Which is where Heiko Hubertz shines. In a move which has overturned the business model for computer gaming, he allows impatient players to pay real-world cash to jump the queue.

"A subscription-based game like World of Warcraft can only monetise those players who are willing to spend ¤11 [£7.70] per month," he says, before presenting his vision of gaming's future to an industry conference in London earlier this month. By contrast, his customers can spend as much or as little as they want. "Our games earn an average of ¤20 per player per month."

In a digital world where neither subscriptions nor advertising can cover the billions being invested, Hubertz has pioneered a new way to squeeze revenues out of the internet. His browser-based games – played through Windows Explorer or Mozilla Firefox, with a sense of progression from session to session – now threaten to give Sony's PlayStation and Microsoft's Xbox a run for their money.

Computer gaming has already overtaken the film industry by gross revenues, yet it remains a far from settled industry. Hubertz believes browser-based games will triumph partly because broadband is becoming powerful enough to carry the high-quality visuals players want.

In his sober grey jacket, even without a tie, Hubertz doesn't look like a trendy Silicon Valley entrepreneur, though he's lived in San Francisco for the past few months. His English has a German accent, but not too strongly; his home town, Heide, near the Danish border, is not far from where the Angles and Saxons launched their conquest of Roman Britain.

His interest in gaming started early, he says. When he was 13, in 1988, his father, a former soldier, bought a PC which the son commandeered. "There weren't many games so I wrote my own." Or, at least, he painstakingly copied a program out of a magazine and then optimised it. "It was a flight simulator, a typical German game."

Gaming was just a hobby back then. After finishing school he worked for a telecoms company, leaving to set up his first online business, a payment firm that let customers unlock private websites by dialling a premium-rate phone line. He sold it in 2002, unhappy with the clientele it attracted. "I wasn't in porn," he stresses. "I just sold them a service."

Retired and restless at the age of 26, he devised a fantasy football game he could play online against his best friend. It was browser-based, the mechanics handled by a central server. He emailed the game to friends who passed it on to others. "It had a huge viral effect and our server crashed." To provide the service to all the strangers Kickers Cup had roped in would take bigger computers.

A one-off purchase fee – the usual model for stand-alone games distributed on CDs – wouldn't work, since he needed a steady cash flow to cover the ongoing costs of the servers. The operation was too small for advertising, and he didn't want to discourage players by demanding a subscription. Instead, he offered to sell better footballers for ¤0.50 each, hoping every user might buy one. They each bought a full roster. "This was an eye opener," says Hubertz. It was a short step to having the players age, so that customers had to buy new ones every six months. Thus was Bigpoint gaming portal born. Icefighter followed. Like Kickers Cup, it was a management program, based on a spread sheet, though for ice hockey instead of football. The company's stable of 60 games now features titles from car racing to fantasy and science fiction.

Bigpoint's English-sounding name was chosen with an eye to going global, but to break out of the German market would take a more visual game. "We had to develop something active and dramatic." That something was Seafight. "You can see your pirate ship and fight against others," he says. "You can get everything in the game without paying if you spend time." And that's what 90 per cent of his customers do. But with more than 30 million players a month, the remaining 10 per cent are a substantial paying clientele.

Growth was funded partly by a 2008 venture capital investment from GMT Communications Partners, a London private equity firm, and the Peacock Equity Fund, a joint venture of NBC Universal and GE Commercial Finance, which valued Bigpoint at $110m (£68m). "Our revenue has been doubling every year and profits are growing even faster." The company now has 500 employees worldwide, and plans to hire another 300. The main target market is America, and the sally will probably involve the acquisition of US design studios.

Not all the company's deals have been prescient. One of its early successes was Mafia 1930, a game which let players run crooked businesses and steal alcohol from each other. But when a company called Zynga approached him about putting it on Facebook he declined. "I said 'forget it. Facebook is a social utility not a games platform.' I totally missed it." Zynga responded by launching its hugely successful Mafia Wars game. The rivalry continued with Zynga's Farmville squaring off against Bigpoint's Farmerama.

Asked if that rivalry had ended up in court, Hubertz says: "I've never had a law suit. I don't think you can defend your gaming intellectual property." Many of Bigpoint's games are now available on Facebook, but not exclusively. Relying only on the social utility is dangerous, he says. "Facebook can change the rules." Much the way Hubertz has.

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