Philip and Tobias Reisberger have left Bigpoint to start their own mobile studio, AppFlag.

JULY 19, 2012 • Bigpoint GmbH has made the economic decision that contracting with outside mobile development teams is preferable to maintaining in-house staff to create content for smartphones. The decision comes at the same time that executives Philip (chief games officer) and Tobias Reisberger (chief revenue officer) have stepped down to create their own mobile studio, AppFlag. While the departure of the brothers is said to be on good terms, it is reported that as many as 30 employees from the mobile division have been laid off. Of the 10 games in development, those titles that are completed will be released with the rest cancelled. Also announced were replacements for the departing Reisbergers. Christian Unger, the former chief executive of Ringier & Tradus media group in Switzerland, joins as chief operating officer. The new chief games officer is Khalad Helioui, formerly an investor with private equity group TA Associates. Promoted to Bigpoint’s senior management team at the same time were Claire Davenport (Chief Commercial Officer) and Tim Weickert (Chief Technical Officer).

Impact: We honesty expect to see more publishers getting out of the in-house mobile development business. First, there is a flood of small- and medium-sized development studios rushing in to create content for smartphones. Second, it is still a chore to build awareness for a mobile game surrounded by a clutter of 500,000 competing titles. Third, there are few mega hits on mobile platforms that generate substantial revenue. The rule is for much more modest returns on investment, especially on Android where consumers are much more driven to play free than pay. Faced with an abundant supply of hungry new mobile studios, Bigpoint can likely secure the outside development work it needs done at a relative bargain, and still release a similar number of smartphone games.