State of the Oulu Game Industry 2020 - Brought to you by the Game Capital Oulu Project - Apaja
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
State of the Oulu Game Industry
2020
Brought to you by the Game Capital Oulu Project
Foreword It felt important to follow up on the 2018 study, in order to share more light on the Game Industry in the Oulu region for investors and companies wishing to relocate their activities / outsource them, as well as to provide good source material to help local entities continue to support the industry in the most efficient way possible. The rapport is built on top of the results from a survey conducted for the Game Capital Project. The goal was to get an overview of the current situation, identify what changed since the last report and also to see where the industry might be heading. For the survey, we interviewed 17 Game Companies, the head of the community association and representatives of business Oulu. A request for an interview was set to all Oulu Based Game Companies, however not all of them reached back. We hope that the following report will give the reader a deep insight into the Oulu Game Industry from multiple angles We wish to thank everyone who has participated in this process. This report does not intend to compete with the NeoGames "The Game Industry Of Finland" (FHIR) that covers the general state of the Finnish Game Industry - but instead, aims to come as an addition that goes deeper into the Oulu Region specifics Find the latest publications of NeoGames here https://www.neogames.fi/en/industry-info/publications
Industry Report Part Studios Interviewed Ludocraft Empires not Vampires Oy Mobile, PC, VR Customer projects Mobile Developer Playsign Resistance Games Oy PC Developer PC Developer Mekiwi VR Riimu Games VR Game Publisher & Developer Mobile Developer Spawn Point - Youth Control Games Cooperative Publisher Mobile Developer Kaamos Games - Round Zero Mobile, PC, Web Customer projects Publisher Koukoi Games Lost hoodie Mobile Developer Mobile Developer Fingersoft Oy Spectarium Oy Mobile Developer Mobile & Cross-Platform Developer Happy Hobgoblin Bonus Stage PC, VR, Switch Developer Game Agent SuperGod Offset Games Mobile Developer PC, Console, Mobile Developer Kuvion Marketing services Could not be reached Playsign Belle Games PC Developer Mobile Developer Psyon Games Creeng Mobile Developer Mobile Developer Bad Crane Oy Quantum Shake Mobile Developer Mobile Developer
2019-2020 Industry overview. At the time of writing this report, the Oulu Game Industry has 23 active studios and 3 service providers. 72.2% of the studios focus on Mobile, 16.7% on PC, 5.6% on VR and 5.6% on Other platforms. In 2019, the game industry is estimated to have generated 24.9 Mil € and is projecting an income of 30mil for 2020. The industry was formed by 181 professionals in 2019 and it's positive projection is to grow to 228 professionals by the end of 2020. Industry Growth Oulu Game Industry has seen over the last four years a steady growth in the terms of the number of new companies and new employees. On average every year since 2012 there are two to three new studios established. The only anomaly we've noticed in the number of studios created is the 2018. We saw a 140% increase in the number of new companies created per year compared to the 2.5 median for the last 6 years. 66% of the companies set up in 2018 are still active today.
The industry is stabilising. What we found positive from the research, is that the number of active companies each year is stabilising around 23 (with older companies dying and new ones entering the industry). Activity Segmentation Segmenting the local industry based on their specific activity we have found 19 (82.6%) studios that focus on Game Development, 2 (8.7%) publishers and 2 service providers. Besides the ones included in the report, we have found companies like law firms, marketing agencies, accountants etc, that are able to offer services that support the activities of the game industry but as their main activity is not this sector, we have opted to exclude them. We couldn't find any local studio that is involved in providing tools and infrastructure related support.
Platform With no surprise, the mobile platforms iOS and Android are still the main target platforms. In this aspect, the region is following the national trend to focus development on Mobile due to the low entry threshold and rapid development time.
Compared to the 2018 report, we have one developer that developed for Switch
and 3 companies that include VR in their development. Mekiwi is the only studio
that has released their own VR Title. 60% of the studios are developing for Mobile.
Mobile expertise in the area seems to increase yearly while the PC platform
expertise seems to be fluctuating.
Even though Nintendo Switch has seen a rapid growth of popularity among
Finnish Developers, it seems Oulu is not following the trend as only one developer
specified Switch as a target development platform.
The popularity of Pc as a platform started growing among the local industry. It
has been rejuvenating to see and learn from their development process. We now
have 51 studios that include PC as a platform for their development,
We have also seen a stagnation in the number of companies that have chosen VR
as their main focus or are able to develop VR Products if need be. Although the
market is quite immature, everyone is keeping an eye on the technology as
everyone expects it sooner or later to grow and mature.
There is a good diversity in terms of games that are developed and platforms
targeted by studis. Having companies that focus on different platforms and
technologies inside the region only strengths us. It enables us to learn from each
other, and to evolve more quickly.
1
Happy Hobgoblin, Ludocraft, Offset Games, Playsign, Resistance Games
Funding In terms of profitability, in 2019, 40% of the companies we interviewed were profitable, the remaining 60% had other means of supporting their development. Company Income We have calculated income as the amount of money the industry generated from services or games but also through capital investments. On the bigger picture, the revenue generated by the industry stabilised around 24Milions out of which the biggest contributor is still Fingersoft. For 2020, the revenue projection for the Oulu Game Industry is 29,9M euro. Right now it seems hard for companies to make it in the region, as we have a 40% profitability rate, rest 60% either running their development on investments, own money or debt. While the majority of the companies in the region are still under 50k/year with a couple on the edge of survival, we have noticed an increase in the 500k-1M and 1-2M zone. Signs that the industry has been maturing and there are more stable companies.
Company size in terms of employees Looking at the number of employees per company, it is safe to say that the industry is heavily built by small studios. Sign that the region has a good support system that encourages the establishment of new start-ups. 43.5% of the active studios have 1 to 5 employees, 30.4% 6 to 10, 21.7% 11-20 and 4.3% 60+ We have noticed difficultes for studies to scale up their development. Majority of the studios remain at the same or similar level for years with no significant increase. One possible explanation for the growth of the small studios is the lack of local funding needed to cover running costs for bigger projects or scaling up.
Professionals Although the number of active companies is stagnant, Oulu Game Industry employs more people every year, Fingersoft taking the lead but new players are catching up. The number of industry professionals has grown steadily, on average 28.79 % each year for the last 4 years, slowing down a bit in recent years but still keeping strong above the 20% threshold. The real demand for new workers is difficult to quantify with any accuracy because of the competitive nature of the industry. Interviews however suggest that the Oulu Game Industry is looking to keep on rising with an optimistic projection of 25.9% increase compared to 2019. This projected increase is driven by the larger studios that are consolidating their development and new studios.
Roles in the Industry In order to get a bigger picture about how roles are distributed inside the companies, we asked in the interviews the number of employees in various positions. Those are rough numbers: one employee in several businesses may work concurrently in several fields. Most of the companies outsource their Audio needs as they don't have enough work for one full time employee. There is a balanced overview from the interviews but in reality, the majority of the Business are coming from up to 3 companies with the rest struggling with different hats. The Oulu region is strong in regards to Artists and Programmers but lacks in other areas. According to the interviews, the biggest need at the moment in terms of employees seems to be Business Developers and Marketing/UA specialists and dedicated Game designers.
The relationship between employees that are involved directly in development and employees involved in supporting activities, seems to be at an overall 65-35 Development - Support ratio based on the interview questions. Interns As a way to enter the industry, it is common for students to approach companies and try to get an internship. We have asked the company representatives if they are or planning to take in interns as a way to screen the students and possibly employ them. 83.4 % of the Interviewed companies said they take interns and the rest 16.7 said they are currently not taking interns but will take at some point in the future. Thoughts on VR/AR/MR When asked about XR, studios, with some exceptions (Meikiwi, Happy Hobgoblin Oy and Ludocraft), consider the market to be too small for them to focus on it from a business point of view. They are waiting for a shift in consumer behaviour as currently it's primarily focused on B2B. Hardware is still too expensive for mass user adoption.
VR has lost some momentum compared to 5 years ago but it's still a promising market that everyone is keeping an eye on. More companies will jump on the platform once the industry changes towards B2C. One studio said they are looking with higher interest into what MR is capable of as it is something more like what they would potentially do, others were not interested. Future plans The future seems very inwards focused, very few companies in the region focusing on expansion to new markets, platforms or technologies. The industry is going to survive, nonetheless - the only question is if it's going to keep the same growth rate or will it slow down. With the recent changes in the educational sector, everyone seems concerned that there will be a severe slow down in terms of new companies and prospect employees. Main focus for the studios is to stay alive and potentially grow. It's expected for the industry to change very little in the upcoming years given the majority of the studios are still early stage. There is a constant slow growth but without external factors, the Oulu region will still need a couple of years to become comparable to the one found in the south of Finland. Development plans for the future Studios will continue to develop their processes and teams so that they can continue to release new titles in the near future. In regards to new technologies, studios are keeping a keen eye on XR, Stadia - cloud gaming in general. Development plans for the future seem to be dependent on the skills that are lacking in the area. A better understanding of business opportunities, marketing skills and availability of private funding would allow companies to secure the funds and execute on bigger plans. Without those, the industry is forced to stay in a survival mode.
Summary Growth The Oulu game industry has been growing for the last 4 year at a steady pace in terms of revenue and professionals. It is safe to say that the industry is slowly maturing. Compared to the 2017-2018 we now have more companies in the upper part of the income graph. Mobile platform In terms of development, mobile is still the go to platform but we've seen an increase in PC and other platforms as well like Switch and VR. Ecosystem We have a healthy ecosystem which consists of an open and willing to help community, a good government and private collaboration and an excellent educational model that keeps the industry growing. In order for Oulu to reach its potential, a pipeline would be needed to ensure that the new companies get the right support and guidance to make profit. It would be encouraged to look into the creation of an accelerator that would guide and support entrepreneurs navigate the early stages and a fund that would support the growth of the start-up scene. Professionals We have currently around 180 professionals working for game companies, a nice 24% increase compared to 2018 and a predicted 25% increase for 2020. The industry is expanding and demanding more and more professionals. At this rate, in 5 years the industry will double in terms of professionals. There seems to be a growing need for the education of new professionals in different fields as the industry starts to grow. More about the education aspect in an upcoming report. Oulu Region is a rough diamond. The region has potential to compete at an international level as an attractive zone for talent and new companies. Oulu has a high quality of life, a high skill-level workforce due to the overall quality of education. On top of this, our local Business organisation (Business Oulu) has and still is involved in supporting the game industry thus access to public funds is made easier.
You can also read
