CipSoft's Continued Success and the MMO Market's Peculiarities

CipSoft has been doing very well over the past few years. The company, which won the Best Studio award at the German Computer Games Awards (DCP), now employs more than 100 people for the first time and has just announced its second MMO. We spoke to Benjamin Zuckerer, Lead Product Manager and Managing Director, about the MMO market, how the company is dealing with its success and how it plans to build on it.

CipSoft, based in Regensburg, is a true veteran of the German games market. The Company was founded in June 2001 as a result of the success of the MMORPG Tibia. The game itself was launched in 1997. More than 32 million accounts have been created by players all over the world. In May 2024, the game developer in Regensburg has 100 employees. This is an all-time high. 2023 is the year with the highest pre-tax profit in the company's history. Compared to 2022, the profit increased by 21.8 per cent to 14.5 million euros. Turnover increased by 11.3 per cent to 24.5 million Euros. CipSoft's employees share in the company's success by receiving a bonus of more than 85 percent of their annual salary, equivalent to more than ten additional monthly salaries.

The company, which remains independent, was named Studio of the Year at the 2022 German Computer Game Awards. In addition to maintaining existing products, CipSoft will continue to work on the development of new games and services in 2024. And that new game is the MMO Persist Online. We spoke to Benjamin Zuckerer, Lead Product Manager and Managing Director, about the peculiarities of the MMO market, the sharp increase in turnover since 2020 and how the company is trying to maintain both the high level and the employees.

GamesMarkt: CipSoft has been a successful player in the MMORPG genre since 1997, surviving the genre's heyday with games such as WoW, EverQuest 2 and Aion. In recent years, the genre has seen few notable new entries, with the exception of New World, or long-established titles such as WoW, FF14 and Albion Online. What do you think of the current MMORPG market? What makes this market special?

Benjamin Zuckerer: "The MMO market is one of the most challenging to navigate. Building online games is incredibly complex, and finding a foothold in the market is even harder. Most new games in the genre are developed by very large teams over 5 to 7 years, with enormous budgets for both production and marketing. When they fail, they fail spectacularly; but when they succeed, the investment can pay off for many years. Despite our success with Tibia, we are a relatively small company compared to our global competitors. Therefore, we focus on different elements to carve out our niche – primarily gameplay. We don’t have the capacity to produce a game with AAA graphics, but we aim for graphics that age well and are consistent with the game itself. If Tibia has taught us anything over three decades, it’s that good gameplay and a strong community are the most critical components of an online game."

GamesMarkt: CipSoft achieved its highest turnover to date in 2020, a huge leap compared to 2019. Was this entirely due to the effects of the Covid-19 pandemic, or was it also due to the game LiteBringer?

Benjamin Zuckerer: "The majority of our revenue was generated by Tibia. The significant jump in 2020 was primarily due to many old players returning to the game during the Covid-19 pandemic. LiteBringer did contribute, but it did not have a significant effect compared to the impact of returning Tibia players."

GamesMarkt: Nevertheless, Cipsoft managed to keep its turnover above 20 million Euros in the following years (after Covid-19). How do you explain this sustained success, and is it also the basis for something new like Persist Online?

Benjamin Zuckerer: "Our sustained success can be attributed to a few key factors. After Covid hit, we adjusted our strategy and developed features specifically tailored to long-term players. This adjustment paid off, helping us to keep many of the returning players engaged over the years. Additionally, we continue to innovate and improve Tibia, keeping the game fresh and engaging for both new and returning players. Listening closely to our community and adapting based on their feedback has built a loyal player base that supports us year after year. Secondly, this ongoing success provides a solid foundation for new ventures like Persist Online. Financial stability allows us to invest in new projects with confidence. We also received government funding for the production of Persist Online, which helps us to compete with the global players in the MMO market."

GamesMarkt: CipSoft is based in Regensburg in Bavaria. What is it like for you to develop games at this location?

Benjamin Zuckerer: "Developing games in Regensburg has its unique challenges and opportunities. We have traditionally sourced most of our talent from nearby universities. Recently, we've seen an influx of industry veterans from all over Germany, which frankly is a new experience for us. Unfortunately, this is partly due to the current turmoil in the industry. However, we are proud to offer stability and competitive compensation, including a revenue-based bonus. The local talent pool is growing; nevertheless, attracting experienced developers with expertise in online games remains comparatively difficult."

GamesMarkt: Employee satisfaction and retention seems to be a particularly important issue for CipSoft, partly because of the additional bonuses that you also communicate in a very public way. How important is it for you to have and keep satisfied employees, especially in the current environment of the games industry?

Benjamin Zuckerer: "CipSoft is a unique company in many regards. We work together as a team and set our own rules and goals. We are able to do so because we are completely independent. The company is still equally owned by its founders, so there is no publisher or external investor exerting pressure during challenging times, like those our industry is currently experiencing. We believe that when our team is happy, they can deliver better work and products. Every year, CipSoft pays out 25% of its profit to the employees because, without the people working here, we simply would not be where we are today."

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