Nestled in the Northern Reaches of Germany a Cluster of Studios Have Been Pulling in Millions of Punters That Console Outfits Continue to Miss

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BETA | HAMBURG FOCUS First port of call Nestled in the northern reaches of Germany a cluster of studios have been pulling in millions of punters that console outfits continue to miss. Aaron Lee examines what makes the seaboard city of Hamburg a development haven

IN A BUSTLING port city in Western Europe a “It’s funny because free-to-play and Goodgame’s empire of free games are all revolution is happening. The products are browser games development has been about wish fulfilment. Command a starship, digital and the brands largely unknown – at smiled at for such a long time, while the become a gang leader in a bid to control the least to English-speaking audiences. But the British games industry – developing mainly streets, get your hands dirty rearing chickens growth they’ve spurred is real. console titles with triple-A budgets – has and milking cows on a farm of your very This is Hamburg, one of Germany’s most been considered the poster child of European own – the list goes on. densely populated areas, where games games development,” says Marius Follert, CEO Such titles hail from well-trodden genres, companies are generating the kind of of Farbflut Entertainment. “Through the rise such as role-playing and time management, growth that prompts even the most of connected devices and the acceptance of but their component parts serve to create an disinterested of politicians and critics to sit up free-to-play in the West, this alleged handicap experience that has attracted over 100 million and take notice. is now turning out to be a big plus in terms of registered users. More than 150 development studios and experience and player base in the face of games-related companies have set up shop in change that this industry is going through.” ALL FOR ONE the region, which is already famed as Farbfurt is behind the offbeat free-to-play Almost all of Hamburg’s developers paint Germany’s media and banking core. By mid games Dossergame and Knastvögel, titles that Develop a similar picture when it comes to 2013, the games sector in Hamburg is have attracted millions of users, primarily their games. It’s no exaggeration to say that expected to account for 4,500 jobs. from German-speaking countries. And it’s not the city has browser games running through Dubbed the “harbour of the games alone. Many of Hamburg’s studios have its veins as freely as the tributaries of the industry”, Hamburg is home to developers ploughed their resources into browser games River Elbe, which snakes its way through the such as Goodgame Studios, Fishlabs and and free-to-play development, with heart of Hamburg. Of course, there’s no Gamecity Hamburg’s Xyrality. They’ve made their mark in online surprising success. shortage of browser games online covering Achim Quinke (top) and and social with the very games that have “Hamburg is definitely the capital city of all manner of popular fantasies and themes. Alexander Goldybin of been subject to derision for years. Whether browser games,” says Goodgame COO and When another fifty companies on your own iLogos (bottom) you accept the products they make or not, it co-founder Christian Wawrzinek, whose doorstep are producing similar kinds of is the infrastructure behind this explosion company has built a successful business on experiences for players, you’d think friction that makes it all the more curious. online games. would start. That’s not the case, thanks to the

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The coastal city of Hamburg has a huge draw for young people, say local employers in the games business. Scenic images for this piece provided by www.mediaserver.hamburg.de. Photo: Sven Schwarze

ecosystem and support network that has Achim Quinke is the architect behind HOME FROM HOME been establish in the city. Gamecity Hamburg, as well the city’s Hamburg is also a home for the founders of Much of the credit for this goes to dedicated jobs portal, Games-Career.com. Xyrality, InnoGames and Farbflut. but for Gamecity Hamburg, the trade body The organisation, which celebrates its tenth others, it was the city’s reputation for media responsible for nurturing and promoting the year in operation during 2013, prides itself on and finance that drew them to it. city’s developers and service providers. listening to the needs of developers. That, Bytro Labs is one such company, as “Gamecity Hamburg specifically is a great claims its team, is how initiatives like managing director Felix Faber explains: “The support for the gaming industry in our area,” company was founded in Freiburg but when agrees InnoGames CEO Hendrick Klindworth. Mainstream media we started growing it became harder to find “They arrange bi-monthly parties for all in the qualified employees there, so we decided to industry, which is a great way to network. and many cultural move to a bigger city. Hamburg was our first They also frequently host HR events in the choice due to the big gaming community city and in surrounding countries to support institutions are based here. and the networking possibilities.” our hiring goals. And they work closely with That’s what attracted the Faber continues: “Hamburg has always the local government to champion our issues.” been a city that has attracted creative and Goodgame’s Wawrzinek is equally gaming industry to innovative people. Mainstream media as well supportive: “The local firms all form a Hamburg. as many cultural institutions are based here. well-connected network. With Gamecity That’s what attracted the gaming industry to Hamburg, we have one of the best gaming Felix Faber, Bytro Labs Hamburg in the first place. The creation of networks in the world. The initiative provides networks and the many possibilities to an exchange of knowledge between the recruitment tours to neighbouring European connect with others from the industry is what Christian Wawrzinek of companies, promotes the training of young universities were initiated. As a result of its makes Hamburg unique. And the more Goodgame Studios (top) specialists by introducing gaming studies actions Gamecity Hamburg has accumulated gaming companies move here, the more and Felix Faber from Bytro into the university curriculum and facilitates an impressive 2,000 individual members attractive it becomes.” Labs (bottom) the recruitment of professionals from all across Germany – although studios While Gamecity Hamburg received lots of

across Europe.” themselves cannot be single members. positive name checks, some companies M

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Hamburg’s port area offers a bustling atmosphere attractive to many looking for a job in a vibrant city (Photo: Thomas Hampel)

were far less impressed with the lack of TrafficCaptain works to generate traffic for Hamburg has vocal support. But what of support from national government. online and mobile content companies, Berlin? The German capital, home to social Wawrzinek says that such support “limps offering performance-based campaigns and games developer Wooga and a host of tech behind” that of other nations, and describes it consulting services for the implementation of start-ups, has been lauded as Germany’s next as incomparable to the UK. Tax breaks for Google AdWords. bastion of games development. Companies games developers don’t exist, he says. And it was opportunities in the development including Unity, Google and Mozilla have set Follert agrees: “In terms of financial space as well the services that support it up offices in the city in the last 12 months, support, Hamburg or Germany in general which led venture capital firm iVentureCapital with others eying it closely. could do more to support new studios. The to invest in three Hamburg-based companies, Wawrzinek is unrepentant: “With the support pales in comparison to what quality of the local gaming companies, Scandinavian countries invest in this sector, Hamburg is the Hamburg can easily compete with Berlin, the for example.” hyped Mecca of internet start-ups.” most exciting city Fishlabs marketing director Kai Hitzer adds CASH CAPITAL in Germany, and that is that Hamburg’s industry culture of regular Moving on from politics, a number of firms meet-ups makes “it feel more as if you’re were drawn to Hamburg because of its why a lot of talent is talking to a peer than a competitor”. advertising and investment opportunities. iLogos Europe co-founder and CEO The high number of developers that have considering moving Alexander Goldybin is equally as devoted to adopted the free-to-play business model has to Hamburg. the city: “The greatest strength is the people helped to attract a group of support companies working in the industry in Hamburg. They are that provide an essential symbiosis in the city. Michael Reul, iVentureCapital what makes making games such a thrilling Hendrik Klindworth of Among these organisations are Game Ad and often fun endeavour. The mentality of the InnoGames (top), and Net, TrafficCaptain, Atlas Interactive and the previously mentioned Farbflut and trade hub makes it easy to bridge cultural Synthesis Germany's Jan Elblabs. Each of these companies TrafficCaptian, as well as MobileBits. differences, and creates a multicultural Werkmeister (bottom. concentrates its efforts on driving traffic to “Berlin is known for its vibrant start-up working space that offers a home for all sorts browser game sites, attracting advertisers or scene, but when it comes to successful ideas of international talent.” creating new revenue streams, which are a in the long-term, it seems that necessity for games which really on Hamburg-based companies have a better EARLY RISERS advertising or the sale of premium content. track record,” says iVentureCapital co-founder A healthy support network and supportive For example, Game Ad Net specialises in and CEO Michael Reul. “For me, Hamburg is local investors gives the city’s developers a monetising browser and mobile games, with the most exciting and beautiful city in sturdy launch pad, but Gamecity Hamburg’s particular focus on getting non-paying Germany and that is why a lot of talent is Quinke also believes it’s quick-wittedness that

gamers to part with their cash. And considering moving to Hamburg.” got them where they are today. M

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Goodgame’s studio, like so many in Hamburg, focuses on social gaming Xyrality’s startegy building MMO Celtic Tribes

A view of one of Synthesis’ sound booths, from the engineer’s side of the glass An InnoGames developer hard at work in the studio

“Hamburg-based developers are successful But as consumers moved in greater opened. From that moment on, we finally had because of their early move to free-to-play numbers to mobile platforms, desktop and the right hardware and the right ecosystem games instead of developing expensive console browser games makers cannot afford to stand to produce exactly the kind of games we games with high financial risks,” he says. still. Hamburg’s developers appear to be always wanted to make. And our passion and Follert, who’s employer has been making staying one step ahead of the competition endurance ultimately paid off. Today, our free-to-play titles for nearly five years, agrees. once again. Many of those same early movers flagship title Galaxy on Fire 2 HD is considered “Many studios from Hamburg found that have hit big in the browser space have a true ambassador for triple-A gaming on success in the free-to-play realm long before been making the switch to the mobile market. smartphones and tablets.” social gaming took off and studios in other For mobile specialist Fishlabs, the arrival ‘Free-to-play’ and ‘mobile’ are the Western markets really started to take it of smartphones has given them the platform buzzwords of the moment, but the recipe for seriously,” Follert claims. to shine. sustained success is about more than that. InnoGames is among the studios that have Hitzer continues: “If you take just one of them, benefited from this first mover advantage. Our business had you might already be on the right track. But if Brothers Eike and Hendrik Klindworth created you embrace both of them, you’ve got a good the free-to-play title Tribal Wars in 2003. What often been rather chance to make it big. Just look at the recent started out as a hobby rapidly snowballed success stories of CSR Racing or Clash of Clans. into a full-time occupation. Since founding tough in the Java days, but If you do it right, such titles can go straight InnoGames in early 2007, the company now it really took off three-to- through the roof. has about 220 staff, and its games, which also “That’s something that even a premium include Grepolis, The West and Forge of four years ago, with developer such as us has noticed – despite Empires, boast over 80 million registered users. the fact that it is not 100 per cent consistent Fishlab's Kai Hitzer (top), the iPhone. “InnoGames differentiates itself from many with our pay-to-play business model. Hence, and Marius Follert of Farbfurt (bottom) other online gaming companies by putting a Kai Hitzer, Fishlabs we’ve been doing quite a lot of research in lot of care into a small amount of titles,” says the field of alternative payment models in the Klindworth. “We put an extremely high “We’ve been up to our tricks since 2004 last couple of months” priority on quality.” and, in the eight years of our existence, we That’s also what dedicated mobile have constantly pushed the envelope in order developer Xyrality has been doing. Founded MOBILE GETS MIGHTY to bring console-quality gaming experiences in late 2010 and home to 50 employees, it Being first to the new pastures of the online to the hottest mobile devices on the market,” creates strategy and role-playing MMOs for space has meant many of Hamburg’s says Hitzer. “While our business had often mobiles, such as the beautifully designed developers have flourished at a time when been rather tough in the Java days, it really Lords & Knights. console development has become took off three-to-four years ago, when the “We focus on iOS and Android applications

increasingly risky. iPhone got introduced and the App Store got but are also offering browser clients in the M

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Photo: Ottmar Heinze

context of our cross-platform concepts that the European continent may threaten jobs in become more demanding. Consequently, the bring players from all devices together in one the sector. development of new titles has become more game world,” explains co-founder and Ossenbrüggen is pragmatic: “As with most complex and more expensive. This translates co-CEO Sven Ossenbrüggen. other industries, the games business does as a requirement for even more qualified staff InnoGames see the future in the same way, feel the crisis; but in some sectors – such as and even more money. Ultimately, companies as it plans to launch two cross-platform titles less attractive and, most importantly, less in 2013. With the variety of profitable than ours have difficulty Additonally, Goldybin says this need from establishing themselves in the market.” his clients has led his production and creative different studios On the other hand, a number of services outfit, iLogos, to step up its technology companies hold the view that the Eurozone when it comes to cross-platform development. here in Hamburg, there are crisis has had no affect on them, and that Hamburg’s industrial “The boom of mobile-based games always companies they will continue to sustain their growth. heritage (main image) definitely cannot be ignored. With Android The region’s most immediate threat, says has granted the city a gaining, it has become more and more that can sustain Follert, is adapting to the ever-changing sturdy foundation for important for us as an independent online games market, as recent events have games company’s like developer to offer our clients true their growth. brought cracks to the surface. iVentureCapital, which is cross-platform and multi-platform solutions In October 2012, Bigpoint, one of the city’s headed up by Michael Sven Ossenbrüggen, Xyrality for their games,” insists Goldybin. most accomplished developers, closed its Reul (above) “With the rise of mobile gaming, San Francisco office and let go of 120 staff. cross-platform development is something iOS and Android – the growth of the market The reason, said its founder and CEO Heiko that many developers need to tackle and that overcompensates for the crisis’ negative Hubertz, was that the games it had is something the studios here have yet to effects. With the variety of different studios developed hadn’t been that successful, and master, too,” says Follert, who adds that there and approaches here in Hamburg, there are in the highly competitive US market that needs to be considerable growth in order to always companies that can sustain their proved terminal. address the challenges that cross-platform growth, while others might feel more pressure.” Only a few months before, Bigpoint development presents to studios. Goldybin believes the Eurozone crisis may ditched its mobile business plans, stating have a negative effect on the earnings of that it was not the right time to be in mobile TROUBLE TOWN established companies, but expects it to free because of the difficulty of generating revenue. However, there may well be rough seas up potential talent to start-up their own new These events, along with Zynga’s sinking ahead in the bay of free-to-play. gaming businesses. fortunes, have been interpreted as a sign that Despite Germany having the highest GDP Looking more broadly, Wawrzinek says it the free-to-play business model is in trouble. in Europe – $3.5 trillion in 2011, according to will be these young companies that are most Even just the perceived threat of the the IMF – the ongoing financial crisis across at risk: “The users of browser games have free-to-play model deflating risks starting

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trouble for Hamburg’s developers, which rely experiencing a phase of consolidation, In spite of perception of the volatile nature so staunchly on the model. mobile keeps growing and advancing at a of free-to-play, Quinke is confident that Follert is surprisingly frank: “The success of rapid pace. Hence, the time to enter the Hamburg will remain Germany’s free-to-play online games and the industry could hardly be better.” development capital: “Hamburg has a perfect predominance of local game studios Cross-platform development is the answer environment for games developers. Even if developing for this genre is the main driver for some developers, like InnoGames, and some of them have to reduce their staff, we for the jobs growth in Hamburg. But despite still expect growth in terms of the number of all the hype around the business model and If Hamburg-based jobs. By summer 2013, we will count more all these numbers for open positions in than 4,500 people working in our industry.” Hamburg that are being thrown around, we companies manage Bytro Labs’ Faber, too, is placing his trust in need to be realistic. The early days are over to build upon their online people’s desire to play games: “Our customers and the recent layoffs at Bigpoint proved that. live all over the world, so we are not I believe in healthy, sustainable growth. To experience, I’m sure they dependent on a certain territory like the EU. me, the Eurozone crisis is not as much of a will see prosperous In addition, more and more devices, like concern as the growing number of competitors smartphones or tablets for instance, increase in the free-to-play sector and competition for years ahead. the time budget in which people can play talent in the regional job market.” games. Finally, I think people will always play Jan Werkmeister, Synthesis games, no matter what the economical BRINGING HOME THE BACON situation of a country is. As a result, I think the The stigma that surrounds free-to-play where they go, service providers such as games sector is very resilient to crisis.” browser games has not gone away. But iLogos will follow. Increased complexity will “In the end it depends on what people are neither have the developers behind them. result in the need for more skilled staff, not to playing and how they are paying for the Stefan Klein of Gamecity The ecosystem that has been built up in mention new opportunities for external games they play,” says Werkmeister. “I’m Hamburg (top), and Sven Hamburg is a testament to the fact these companies to aid production. confident that interactive entertainment will Ossenbrüggen from Xyrality (bottom) games have the means to enable huge growth. Jan Werkmeister, localisation manager and become the new ‘Leitmedium’ [key medium] Then again, looking ahead, there is partner at QA provider Synthesis Germany, and if Hamburg-based companies manage to awareness from part of Hamburg’s warns that there will be no room for build upon their online experience, I’m sure development community that the platforms low-quality titles: “Great games will always they will see prosperous years ahead. and business models that got them where work out, I believe, but it seems we are to a “Germany is a wealthy country and Hamburg they are today cannot be taken for granted. point where users don’t accept poorly made is also one of its nicest cities. I’m sure a lot of Fishlabs’ Hitzer is putting his faith in games anymore. Quality will increase, budgets people would love to work here. However, mobile: “Unlike the console and the browser in the same manner and the number of founding an umbrella factory could bring games businesses, which are currently games brought to the audience will decrease.” home the bacon as well.” I

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A HAVEN IN HAMBURG GOODGAME STUDIOS

Founded: 2009 Headcount: 300+ Previous games: Goodgame Empire, Goodgame Big Farm Current projects: Unannounced

all form a well-connected network. The public image of Hamburg as a stronghold of games development is good and consistent.” Goodgame develops and publishes free-to-play browser games through its web portal. It’s themed games include fashion, farming and sci-fi titles, among others, and now have more than 100 million registered users. “We are not driven by investors, and our growth results from our BY ITS OWN account, 2012 was strategy for sustainable growth and Goodgame’s most successful year to outstanding performance,” says date. The studio grew to over three Wawrzinek of the studio’s indie hundred people, and it claims to status. “This is why we are looking have increased its turnover by forward to the coming year – we are several hundred per cent. Not to convinced that we can increase our mention, declaring itself as the only turnover even further in the year to studio in Germany to have its own follow, and that we will reach the swimming pool. goal that was set in the spring of last Dr Christian Wawrzinek, COO and year. Namely, to extend our staff to co-founder of Goodgame, speaks 800 employees by the end of 2013.” amicably of his city: “The local firms www.goodgamestudios.com

XYRALITY

Founded: 2010 Photo: Christian Spahrbier Headcount: 50 Previous games: Lords & Knights, Crazy Tribes, Celtic Tribes Current projects: Unannounced GAMECITY HAMBURG’S MISSION is has underlined the need for more to create an optimal business expert personnel in programming environment for the industry in specifically. The network does its fair cross-platform development for its Hamburg. The body is the largest share to support games education clients. For Ossenbrüggen, mobile is network dedicated to the games in the city by hosting lecture series, the strongest trend in the current industry in Germany, with more providing advice on games market, and he says its is more of a than 2,000 individual members to development courses and platform shift than a straight its name. It was established in 2003 partnering with local universities technology shift. as a public-private partnership involved in technology and Ossenbrüggen adds that the funded by the City State of games-related research. city’s games trade body, Gamecity Hamburg, and is led by founders Most notably, the network has Hamburg, has given it good support Achim Quinke and Stefan Klein. generated an atmosphere and financially and educationally. And, “Our main strength is that we can culture among local studios that has he says that developers are treated provide the whole value chain of the resulted in an increase in jobs for well by Hamburg’s local government. games industry in one city,” says Klein. the sector. “RATHER THAN A particular studio “At Xyrality, we have a corporate Gamecity provides studios with “Hamburg counts more than model or development method, it’s culture where all team members PR, affordable office space, 4,000 employees in our industry, so more the melting pot character can see their commitment consultancy, recruitment support, we are far in front of other cities in that’s typical of Hamburg’s gaming contributing to our success every among other activities. The body Germany,” Quinke says. industry,” says Xyrality co-founder day,” he says. “To keep this spirit puts listening to the needs of its “Munich is a beautiful spot and and co-CEO Sven Ossenbrüggen of alive, we are always looking for members first, which has led to the Berlin is the place to be for parties his studio’s home city. “We have a ambitious employees striving for creation of new kinds of services, and nightlife. But Hamburg is high variety of different companies excellence in their job. In turn, such as recruiting tours to European number one in terms of earning and entrepreneurs that are either all Xyrality places a lot of responsibility universities. The importance of money and building sustainable about gaming or gaming-related.” on its employees so they can use ensuring skilled students continue studios. And of course we have a Xyrality develops mobile MMOs their drive to create something new to enter the workforce is also a vibrant nightlife too.” for iOS and Android platforms, and to achieve great things.” prime concern for Gamecity, which www.gamecity-hamburg.de more recently began implementing www.xyrality.com

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FISHLABS ENTERTAINMENT

Founded: 2004 Headcount: 60 Previous games: Galaxy on Fire 2, Snowboard Hero Current projects: Unannounced multiplayer title

MOBILE DEVELOPER FISHLABS has got a lot of unique experience and come into its own since the arrival of know-how in that area.” the iPhone. One particular factor that makes Premium 3D games for Hamburg especially attractive to smartphones, tablets and PCs are the developers is the infrastructure of the Hamburg outfit’s focus, and it has city’s gaming scene, he continues: amassed over 50 million downloads “Not least due to the Gamecity for its titles to date, led by flagship Hamburg initiative, there is a pretty series Galaxy on Fire. vivid exchange and a rather “The big browser game companies cooperative workflow between the do no longer just pursue a single different companies. Employees and strategy, but rather they become managers of all different kinds of more and more interested in new gaming outfits meet each other businesses as well,” explains Fishlabs regularly on industry parties, marketing director Kai Hitzer. regulars’ tables and other kinds of “The hottest and most spectacular meetings. And on almost all business of the hour is most likely the occasions, it feels more as if you’re mobile business – which is quite talking to a peer than a competitor.” good for us, because it’s been our Fishlabs is currently working on its main field of interest ever since our first multiplayer title. foundation in 2004, and hence we’ve www.fishlabs.net

INNOGAMES ILOGOS EUROPE

Founded: 2007 Founded: 2006 Headcount: 220+ Headcount: 200+ Previous games: Tribal Wars, Grepolis, Forge of Empires Previous projects: Vector, Mega City, 11x11, Starboard Slots Current projects: Kartuga, plus two unannounced titles Current projects: Unannounced

can also provide 2D/3D graphics, QA, testing or simply porting between platforms. Goldybin’s reason for working in Hamburg is practical: “Hamburg supplies an excellent talent pool for any company that grows as quickly as ours. For us, it is also an important factor to be able to offer our clients onshore legal benefits, paired with nearshore pricing. Besides, the quality of living is very “HAMBURG IS THE capital of the that office, we knew we had to “WE BRING GAME ideas to life,” says high, while the cost of living is gaming industry in Germany, move closer to the city for better iLogos co-founder and CEO reasonable. So, overall, it is just a especially in the online games recruitment opportunities.” Alexander Goldybin, by way of very good packaged deal. market,” says Hendrik Klindworth, Today, the studio has over 200 introduction. Formed in 2006, the “Within Germany, Hamburg is CEO of InnoGames. staff working on its roster of independent outfit provides probably the most attractive city to The studio started life as a free-to-play browser titles. affordable production services for live and work in. I would even say, it part-time preoccupation for In 2013, it’s moving into mobile social, browser, mobile and is rather attractive even on an Klindworth, as he explains: “I grew apps, and looking to strengthen its cross-platform games. Among its international scale. This helps up in the Hamburg area, and along business with new cross-platform customers are international names, tremendously, finding skilled with my brother [Eike] and our productions. Job growth may vary such as Wargaming.net, Playdom, personnel and B2B partners to school friend [Michael Zillmer], we from company to company, but Peak Games, National Geographic operate and grow a games business created the game Tribal Wars at a Klindworth is confident Hamburg is Games, 6waves, FreshPlanet, Upjers on. The Eurozone crisis might have a young age. In 2007, we started the place to be. and Youdagames. negative effect on the earnings of InnoGames to support the growing “We wouldn’t think of Depending on its clients’ needs, it established companies, but it has fanbase of the game, and we rented headquartering InnoGames can produce complete games, also freed up potential talent to our first office in our hometown of anywhere else,” he concludes. including creative services or work start up their gaming businesses.” Stade. When we started to outgrow www.innogames.com from existing design documents. It www.ilogos.biz

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