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GAME DEVELOPER INDEX 2012 SWEDISH GAMES INDUSTRY’S REPORTS 2013 TABLE OF CONTENTS

EXECUTIVE SUMMARY 2 WORDLIST 3 PREFACE 4 TURNOVER AND PROFIT 5 NUMBER OF COMPANIES 7 NUMBER OF EMPLOYEES 7 GENDER DISTRIBUTION 7 TURNOVER PER COMPANY 7 EMPLOYEES PER COMPANY 8 BIGGEST PLAYERS 8 DISTRIBUTION PLATFORMS 8 OUTSOURCING/CONSULTING 9 SPECIALISED SUBCONTRACTORS 9 DLC 10 GAME DEVELOPER MAP 11 LOCATION OF COMPANIES 12 YEAR OF REGISTRY 12 GAME SALES 13 AVERAGE REVIEW SCORES 14 REVENUES OF FREE-TO-PLAY 15 EXAMPLE 15 CPM 16 eCPM 16 NEW SERVICES, NEW PIRACY TARGETS 16 VALUE CHAIN 17 DIGITAL MIDDLEMEN 18 OUTLOOK 18 SWEDISH AAA IN TOP SHAPE 19 CONSOLES 20 PUBISHERS 20 GLOBAL 20 CONCLUSION 22 METHODOLOGY 22

Cover: Mad Max (in development), Avalanche Studios

1 | Game Developer Index 2012 EXECUTIVE SUMMARY

The Game Developer Index maps, reports and analyzes the Swedish game devel- opers’ annual operations and international trends by consolidating their respective annual company accounts. Swedish game development is an export industry and operates in a highly globalized market. In just a few decades the Swedish gaming industry has grown from a hobby for enthusiasts into a global industry with cultural and economic importance. The Game Developer Index 2012 compiles Swedish company accounts for the most recently reported fiscal year. The report highlights:

• Swedish game developers’ turnover grew by 60 percent to 414 million euro in 2012. A 215% increase from 2010 to 2012.

• Most game developer companies (~60 percent) are profitable and the industry reported a combined profit for the fourth consecutive year.

• Job creation and employment is up by 30 percent. That’s 455 full-time positions and 1967 employees total.

• The number of women employed in the industry increased by 39 percent, resulting in a total share of 15 percent.

• The average annual growth rate (CAGR) from 2006 to 2012 was 34 percent.

• Thirty-five new companies have emerged. There are now 145 active companies, an increase of 24 percent.

• Game development is a growth industry. Over half of all companies were registered post-2008.

• The Swedish game developer is characterized by breadth and quality. has the world’s leading developers of AAA, , social games, mobile games and specialized subcontractors.

The outlook is for continued growth in 2013. External issues and challenges are access to capital, access to expertise, and regulations around digital markets that are out of step with current industry developments.

Game Developer Index 2012 | 2 WORDLIST

AAA: Refers to big budget video games, and is generally associated with a high level In-app Purchase: Real money-purchases conducted within a game, rather than an of quality. These games are usually published by the industy’s biggest publishers, external payment system. Items usually bought consist of new levels, equipment, mainly via physical distribution. experience points etc.

Alpha: The first phase to begin testing in a game’s release life cycle. Indie: Derived from ”independent”. Signifies game productions by independent developers; normally small companies with only one or a few number of employees. Beta: Follows Alpha. This phase is typically the first time that the software is Indie has in recent years signified the emerging stream of smaller developers that available outside of the company that developed it. External users are called beta have been able to reach a wider audience thanks to digital distribution, which has testers. made many independent productions financially viable.

Casual Games: Games targeted at a mass audience, typically distinguished by MARPPU: Monthly Average Revenue Per Paying User simple gameplay, short learning curves and being played for shorter sessions at a time. MARPU: Monthly Average Revenue Per User

Cloud Gaming: Also known as gaming on demand, is a type of online gaming that MAU: Monthly Active Users allows streaming of games onto a computer while the actual game is stored on the game company’s server. This allows access to a game without the need of a console Middleware: Computer software used for game development. Middleware acts as and largely makes the capability of the user’s computer obsolete, as the server runs “glue” between two existing software components. the processing needs. Micropayment: A financial transaction that involves a small sum of money and CPM: Cost per mille usually occurs online. In the games industry, the term is normally used to describe payments of DLC or in-app purchases. Crowdfunding: Raising funds by crowdsourcing. In recent years, this phenomenon has been prominent on different web platforms that collects co-funding support from Off-shoring: International outsourcing the public. On-shoring: National outsourcing Crowdsourcing: Outsourcing tasks to an undefined public rather than paid employees. Outsourcing: Contracting out of a business process to an independent organization from which the process is purchased back as a service. DAU: Daily Active Users Serious Games: Games with a primary purpose other than entertainment. This Digital Distribution: Sales of digital software through digital channels often involves simulation software, exercise games, games for learning, and advergames. DLC: ; Game add-ons, usually of a smaller scale than classic “expansions”. Smartphone: Mobile phones with advanced computing abilities built on a mobile operating system. Popular examples are the iPhone and Samsung Galaxy. eCPM: Effective cost per mille Social Games: Games on social networks such as Mobage or . Freemium: A business model by which a game is provided free of charge, but requires payment for advanced features or virtual goods. Streaming: Direct access of digital material as it is being transferred on the internet.

Free-to-play/Free2play: Any that has the option of allowing its Tablet: A mobile computer primarily operated by touching the screen. Examples are players to play without paying. Revenues are usually generated by ads or fees for the iPad and Galaxy Tab premium content instead. Virtual Goods/Items: Non-physical goods for use in video games, usually Gaming: The act of playing video games. A word that is commonly used within the weapons, clothing or other apparell. video game culture to describe one’s hobby. A person is called a “”.

3 | Game Developer Index 2012 PREFACE ANOTHER RECORD YEAR

Twenty-twelve was yet another record year for Swedish of rights used to be piracy, but today it is equally about game developers and 2013 is looking to be even better. infringement in the form of hacked servers or trademark The enormous success of the last few years means the most infringement whereby unscrupulous competitors sell copies exciting conclusion of this report is not whether the figures of successful game titles. The legal security of the digital have , but how much. This is of course a pleasant channels remains weak. There are also certain growing situation for a business to be in, and the result of the hard pains when it comes to adapting laws and regulations to work of those involved. Although Swedish computer games global and digital channels, the double VAT charge on apps have had a good trajectory in the last decades, it is only in 2011 is a clear example. Luckily the Swedish tax a few years since the Lehman crash and the subsequent authorities changed their interpretation on that point but financial crisis rattled our business too, with big further, similar issues can be expected, for example what redundancies and reduced sales as a consequence. Since rules will apply to under-age online . then, the companies have adapted with less reliance on assignments from publishers (who depend on credits from Everything points to the continued growth of Swedish game the financial markets) and more on direct revenues from the developers, however. It is not demand that constitutes the audience. limit, as this appears insatiable. Rather, it is access to capital and skill that creates bottlenecks in the development. Through the digital sales channels of mobiles, the internet The companies would be able to expand even faster in the and social media, new audiences have been introduced right conditions. There are good examples in our vicinity. and today everybody can play. The technical Finland has a state system of soft loans that encourages development of touch screens, tablets and smartphones foreign investments, something which Sweden should adopt. has made gaming more accessible, also to those who are not used handling an advanced hand control with several Game developers are good examples of so called “born buttons. Today, games and gamers are on every train, bus globals”, companies that are global from inception. The and soon in every home. Computer games have in less than audience is global, as are most of the business processes: a decade gone from a hobby of enthusiasts to real public recruitment, financing, marketing, subcontractors and there entertainment. are a high proportion of foreign owners. The world also comes to Sweden, during 2012 one of the most successful Sweden is one of the world’s main games exporters, among gaming companies, Rovio (of Angry Birds fame) established the ten biggest in the world. Calculated per capita we top an office in . the list together with our neighbors Finland and Iceland. Relatively speaking we are unique in having international The start-up scene is strong; the report shows around thirty success in all segments: console, online, mobile, social new limited companies during 2012. It is indicative of media and tools/middleware. The Swedish company culture dynamism in the business that several young companies is a big part of the success; game development is team have enjoyed international success in a short time. work and the ability to co-operate in groups is a character- is of course a spectacular example, with total istic of the Swedish workplace culture. Culturally, the legacy revenues of over 220 million euro during the first two years, of Luther and Jante’s tall-poppy-syndrome is important in but there are a number of additional impressive young international competition; we work hard but believe we can companies that within a few years have reached a turnover become even better. In addition, Swedish game developers of around one million euro and employ 15-20 staff. The are exceptionally diverse; many companies have employees game development education in universities and incubator of over 30 different nationalities. like The Game Incubator in Skövde are particularly prominent in developing successful young companies. The number of female employees in the gaming companies is continuing to grow with the number of women employed Twenty-thirteen will be another exciting year, not least with increasing faster than the total number of employees. The the launch of the new PlayStation and . Everything is proportion of women is also increasing. There is still a long pointing towards new records being set. way to go to reach a passable gender distribution; work- place equality is a high priority both for affiliated compa- nies and the business organization. Stockholm, September 2013 Per Strömbäck, Spokesperson A dark cloud on the horizon is the digital competition issue, Swedish Games Industry where a small number of players dominate the global market for mobile games and social media, leaving developers in a weak bargaining position. Infringements

Game Developer Index 2012 | 4 TURNOVER AND by 30 percent, totaling 1967 jobs, or audience, and that is not in short 450 more full-time jobs since 2011. supply among Swedish developers. PROFIT The Swedish industry has never The Swedish game boom continues. reported a similar increase, which Mojang continues to play a significant All key figures point upwards and the trumps last year’s growth with over part in the industry’s success. With industry grew by over 215 percent 100 new jobs created. The number a turnover of 168 million euro they from 2010 to 2012. With reasonable of female employees increased by 39 have not only increased the company’s expectations, last year’s near twofold percent, resulting in 293 full-time turnover by 110 million, but they also increase will not be beaten in 2012, employees, 81 more than last year. represent 40 percent of the industry’s but is a sign of strength that the The overall proportion of women has combined turnover. The interest in industry continues to grow after such a now reached 15 percent. Minecraft has hardly diminished, and record year – and that it grows with a when the game was launched on the reassuring 60 percent. The total turno- That the digital and mobile for digital download, it ver in 2012 was 414 million euro. evolution has played a major role in quickly became the bestselling title the industry’s positive momentum is ever on . With good Profits rose 163 percent to 38 million unquestionable, but when all is said margins a feat that prevails to this day. and a growing majority of companies and done it’s about the ability to are profitable. Employment increased develop games that engage the

TURNOVER PROFIT

500 40 M€ M€ 35

30 400 25

20

300 15 10

5 200 0

-5

100 -10 -15

-20 0 -25 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012

EMPLOYEES GENDER DISTRIBUTION

2000

1500 WomenKvinnor

MenMän

1000

500

0 2008 2009 2010 2011 2012

5 | Game Developer Index 2012 KEY FIGURES 2012 2011 2010 2009 2008 2007 2006 N:o of Companies 145 (+24%) 117 (+10%) 106 (+5%) 101 (-3%) 104 (+14%) 91 (+34%) 68 Turnover 414M (+60%) 257.4M (+96%) 131.2M (+22%) 107.4M (-17%) 128.7M (+21%) 106.6M (+49%) 71.3M T.O per Employee 210K (+23%) 170. (+56%) 109.1K (+12%) 97.4K (+3%) 95.1K (+3%) 92.3K (+5%) 87.8K Profit 38M (+164%) 14.2M (+747%) 1.7M (-59%) 4.1M (+120%) -20.9M (-1121%) -1.7M (+33%) -2.6M N:o of Employees 1967 (+30%) 1512 (+26%) 1203 (+9,2%) 1102 (-19%) 1353 (+17%) 1153 (+42%) 813 Men 1674 (85%) 1300 (86%) 1082 (90%) 993 (90%) 1217 (90%) 1034 (90%) 702 (86%) Women 293 (15%) 212 (14%) 121 (10%) 109 (10%) 135 (10%) 119 (10%) 107 (14%)

All numbers in €

In July 2012, the company also Malmö studio Massive Entertainment Year in the industry’s own launched Minecraft-themed Lego. increases its turnover by 3 million. The Utvecklarpriset (The Developer Award) owner released the acclaimed 2012. Even disregarding Mojang’s Far Cry 3 in November 2012, in incomparable success, it is clear which Massive was highly involved, Linköping-based (previously that the Swedish industry goes from mainly with the multiplayer mode. Donya Labs) more than doubled its strength-to-strength. In 2011-2012 Amidst much praise at 2013, the turnover to 1.3 million. The company’s growth would have been measured at studio revealed Tom Clancy’s The technology for 3D optimization has 25 percent – in other words, more than Division, Massive’s first self-developed been used in commercial successes most industries could boast. game since World in Conflict, which such as Tomb Raider and Gears of became one of the expo’s top crowd War. Simplygon is currently working Since 2013 King reached number one favorites. with renowned industry actors like on Facebook beating former Blizzard, and Bioware. frontrunner Zynga with titles such as Bubble Witch Saga and Candy Crush Pieces Interactive has grown Saga. This path had of course been considerably, increasing turnover from staked out already in 2012, which is 257 000 to 1 million. The number of evident by the studio’s figures. Turnover employees has simultaneously grown increased by almost 9 million during from 5 to 20. The company is one of the year and recent victories include many positive examples of Skövde’s top rankings. Today, Candy growing strength and importance as Crush Saga is one of the most played a developer hub. Another talented games in the world. company based in Skövde is Stunlock Studios, the developer behind DICE grows rapidly and reported a Bloodline Champions, with a turnover turnover in excess of 55 million, a that has grown by 147 percent to over natural corollary of the studio’s suc- 727 000 euro. cess with Battlefield ,3 its publisher Electronic Art’s fastest selling game of Umeå developer Level Eight doubles all time. Over 17 million copies have its turnover to almost 336 000. During been sold to date. DICE currently has the last financial year, the studio sold more AAA projects in production than was awarded 6th place 110 000 copies of Megastunt ever before. in Deloitte Technology Fast’s list of Mayhem and over 240 000 copies fastest growing tech companies, of Robbery Bob with associated DLC MachineGames is a new star in the based on the merits of the period to both App Store and . firmament of Swedish AAA. The studio 2007-2011, when the studio grew by The studio has also developed a game is currently developing its first game, 1284 percent. LittleBigPlanet Vita was commissioned by BBC Worldwide. : The New Order, on awarded Best Mobile Game at Umeå is Sweden’s northernmost game behalf of owner ZeniMax Media. This GamesCon in Cologne. It was also development cluster, where companies does not stop the company from awarded the Game of the Year trophy like Zordix also increased their contributing with an impressive at the TIGA Games Industry Awards turnover, in this case by 157 000 to turnover of 7.6 million, an increase of 2012. Tarsier’s CEO Mattias Nygren 403 000 in total. Zordix’s portfolio 2.2 million on the year before. was named Entrepreneur of the Year includes games for the 3DS in both Blekinge and Sweden in 2012 eShop. and the studio won Developer of the

Pic: SteamWorld Dig, Image & Form Game Developer Index 2012 | 6 BIGGEST PLAYERS Turnover M Euro BIGGEST PLAYERS N:o of Employees 1. Mojang 169 1. DICE 323 2. DICE 60 2. Massive 229 3. Stardoll 23 3. King 152 4. King 21 4. Stardoll 138 5. 16 5. Avalanche Studios 129

Twenty-twelve is the industry’s fourth four of the new entrants have been agency that gradually began deve- consecutive year of positive results, active before they were included in this loping video games. A distinguished and the second in a row with a record report. Examples of these are: a former newcomer is the Bonnier-owned studio increase. Earnings increased by 162 administrative parent company that Toca Boca, which achieved a strong percent, resulting in a total of 38 started game development after fusion position on the market thanks to its million. Approximately 60 percent of with its subsidiaries, and a creative focus on children’s games for tablets. companies report figures in the black, agency that gradually began deve- At the end of its first fiscal year, the in line with 2011. loping video games. A distinguished studio made a turnover of over 3.3 newcomer is the Bonnier-owned studio million. FEO Media, the developer Mojang’s unique position should again Toca Boca, which achieved a strong behind success story Quizclash, also be emphasized. The company made shows good results from start. profits of 36 million in 2012, which is an incredible 70.5 percent of the entire industry’s positive result (about GENDER DISTRIBUTION 52 million). Meanwhile, it is The number of female employees has encouraging to see start-ups and newly increased by 39 percent, thus making established companies becoming up 15 percent of Sweden’s developers. profitable early on. A majority of It is encouraging that the proportion is 2012’s new entrants reported positive growing despite the lack of new figures. Other companies with business with a high share of female significant profits center around 2.2 workers from start (such as Stardoll, million. position on the market thanks to its which employs 26 percent of the focus on children’s games for tablets. industry’s women). In other words, Sweden’s GDP growth was 0.7 percent At the end of its first fiscal year, the existing firms continue to recruit more in 2012 (NIER 19/6 2013), approx- studio made a turnover of over 3.3 female developers. Everything imately three percentage points lower million. FEO Media, the developer indicates that this positive trend will than in 2011, reflecting the economic behind success story Quizclash, also continue and increase in the future. situation worldwide. The Swedish shows good results from start. Between 2009-2012 the number of game industry’s Compound Annual women employed increased by 169 Growth Rate (CAGR) from 2006 to percent while the number of men 2012 is 34 percent, a testament to NUMBER OF increased by 78 percent. game development’s important position EMPLOYEES This positive trend can to some extent in the Swedish economy, now and for The start-up rate from 2011 conti- the future. be seen as a result of the industry’s nues and 37 new companies joined active and long-term work on gender Sweden’s developers in 2012. equality, counting both measures by NUMBER OF Drop-outs accounted for; this results the trade organization and the in a total of 145 active companies, a individual companies. Attracting COMPANIES record figure with good margins. Only more women as both employees and The start-up rate from 2011 four of the new entrants have been customers is an important goal for continues and 37 new companies active before they were included in this the industry’s continued development. joined Sweden’s developers in 2012. report. Examples of these are: a former Much of the recent growth can be Drop-outs accounted for; this results administrative parent company that attributed to new audiences, which to in a total of 145 active companies, a started game development after fusion a large extent consists of women of all record figure with good margins. Only with its subsidiaries, and a creative ages.

7 | Game Developer Index 2012 TURNOVER PER COMPANY EMPLOYEES PER COMPANY

>50>5M: miljoner 11 >50>50: 9

>1-5M:>10-50 22miljoner 21-5021-50: 9

>2-10 miljoner >200K-1M: 37 11-2011-20: 9

1-2100-200: miljoner 18 5-105-10: 30

>1<100K: miljon 55 0-40-4: 88

For convenience, Turnover per Company intervals have been converted by 10 SEK = 1 EUR. For more details on currency conversion, see Methodology.

TURNOVER PER EMPLOYEES PER no full-time employees, which can partially be explained by the onslaught COMPANY COMPANY of smaller start-ups. With several newly established A couple of interesting changes in developers in the starting blocks, the average number of employees took number of companies with a turnover place in 2012. Number of developers BIGGEST PLAYERS With Mojang’s turnover increase of of less than 100 000 increased by 28 with 21 to 50 employees or more nearly one billion, the five biggest percent. At the same time, more studios has increased by 38 percent, and for players are responsible for 69 percent have now surpassed the 100 000 mi- companies with more than 50 employ- of the industry total. That translates to lestone, and 29 percent of companies ees, the average number of employees almost 10 percentage points more than have a turnover of 1-5 million. The top increased from 125 to 138. Meanwhi- the two previous calendar years. No layer has come off remarkably, with an le, the 0-4 segment increased substanti- company in the top five has a turn- ever increasing number of companies ally, and 30 companies have over below 15 million, a benchmark with a turnover exceeding 5 million. surpassed with almost 5 million since

DISTRIBUTION PLATFORMS PC Console Mobile Online Serious Specialised games subcontractors 60 55 This chart gives a good over- 50 view of the platforms in use by looking at what develop-

40 ers have done recently and 36 35 what they are working on Middleware: 10 right now. A developer can 29 30 be present in two or more

22 Tech: columns depending on which 12 formats they have focused 20 on.

Consulting: 9 13 10

0

Game Developer Index 2012 | 8 Roby Tumbler, Pieces Interactive OUTSOURCING/ CONSULTING Outsourcing has rapidly become a growing niche among game develop- ers. A lot of game productions require specific skills or extra staff during certain parts of a project. It is then common to hire personnel from other companies. For some developers, the main part of operations consists of consulting other companies. For others, especially smaller developers, it is a good opportunity to practice skills and get the business going while investing in the original content of their own device. This flexibility is important for the industry’s efficiency and thus Sweden’s competitiveness. It is part of the reason behind the strong growth in recent years.

Examples of outsourcing Swedish companies are Doctor Entertainment, who assisted Starbreeze in develop- last time. Moreover, the leaderboard DISTRIBUTION ing , and Mojang who hired is very level since both Massive and Scottish to develop Avalanche submit figures well over 11 PLATFORMS Minecraft on XBLA. has acted million. The scope of Swedish game as consultants to companies such as development is clearly illustrated by the and Paradox Interactive. Its sub- The numbers of employees in the relatively high numbers for all formats. sidiary has with its self-titled biggest companies has increased A remarkable change is the increased graphics engine tied itself to projects significantly. In contrast, they only focus on mobile game development such as Paradox North’s : account for 36 percent of the industry (or rather mobile operative systems, Wizard Wars and Arrowhead’s workforce, a decrease of almost 10 since the games are released on both upcoming . Bitsquid worked percentage points since 2011. smartphones and tablets). Mobile was closely with Nvidia on their launch of Employees thus continue to be last year’s biggest category and now the game console Shield. distributed more evenly among more about 20 additional studios have lined companies, a testament to the rampant up. Please note that these companies A challenge connected with growth of Swedish game developers. are not necessarily entirely dedicated outsourcing is to keep on-shoring at a to mobile game development, but do it high level – i.e. outsourcing tasks to to a significant extent.

9 | Game Developer Index 2012 Scrolls (open beta), Mojang vother Swedish game developers as far as possible

SPECIALISED SUBCONTRACTORS As the industry matures, the degree of specialization increases, and several Swedish companies have successfully established themselves in different niches as subcontractors to other game developers. These include project- management tool provider Hansoft, and Simplygon, which streamlines graphics production. This development opens up new business opportunities, partly to also work with companies outside of the gaming industry like, for example, Hansoft successfully did with clients such as Boeing. It has also led to foreign investments in Swedish companies.

DLC DLC is short for downloadable content begin with. Since the digital DLC is frequently released to AAA and consists of digitally downloadable distribution boom around 2008, this titles as well, such as and additions to a video game. They vary represents a larger portion of the Battlefield .3 However, it is typically in terms of size and often comprise proceeds of several game developers. smaller titles and free-to-play games new levels, characters, items or mis- The total value of these small revenues that use it as the main income model, sions. They differ from classic or “micro transactions” may in some rather than sales of the actual game. “expansions” by typically being cases be equal to or even exceed the Publisher Take 2 has for example shorter, less extensive, and not being value that would traditionally be con- highlighted DLC’s part in success story retailed. sidered a bestseller. Without storage 2: “add-on content for costs, it becomes profitable to invest in , including its season DLC is part of the digital market’s small, niche products that enhance and pass, was the single-largest contributor long-tail, i.e. a business structure that extend the gaming experience for the to our first quarter results”. makes it viable to increase revenues most loyal players. This lies in contrast by widening a product’s appeal. The with physical sales, where shelf space demand curve of a product is extended normally goes to products that early on with new material, particularly proven are deemed to have bestseller effective for games that are low-cost to potential.

Game Developer Index 2012 | 10 GAME DEVELOPER MAP

*STOCKHOLM Might and Delight Amagumo Games Modesty Arcadelia Mojang Arrowhead Movinto Fun Avalanche Studios Mute Industries LULEÅ Oxeye Game Studio Bajoum Velcro Interactive Bitsquid Paradox Interactive Contentgarden Paradox North DDM Europe Pixel Tales Defold Pixeldiet Entertainment DeNA Sweden PlayCom Game Design DICE Polarbit Expansive Worlds Quel Solaar Fabrication Games Raketspel UMEÅ Semionetix Fatshark Cassius Creative SimWay FEO Media Coldwood Interactive Spearhead Entertainment Filimundus Dohi Sweden Spelagon Funrock Media Ice Concept Studios Spelkultur Sverige G5 Entertainment Level Eight Starbreeze Gamevibe Oryx Simulations Stardoll Goo Technologies Turborilla Talawa Games Interactive Productline Zordix King Tealbit Toca Boca LaughLoud Labs SUNDSVALL Liquid Media Tomorroworld Corncrow Games Massive Shapes World of Horsecraft Ouch Games

SKÖVDE Mobile Storytelling FALUN Paradox South AE Interactive Studios Coilworks Pieces Interactive Megafront Digimundi Piktiv Tension Graphics Immersive Learning Shortfuse Games Tenstar Stunlock Studios Lockpick Entertainment BORLÄNGE Ludosity Triolith Entertainment Communisport Mandibol Entertainment UPPSALA Doctor Entertainment Game-Hosting GH LIDKÖPING Hansoft Imagination Studios SimBin MachineGames Sweden KÖPING Music Instrument Pikkotekk GOTHENBURG LS Entertainment 1337 Game Design Champ * EPOS Nornware STRÄNGNÄS Free Lunch Design Outbreak Studios ESKILSTUNA Primus Appus Hello There Räven AB Daikonsoft Image & Form Senri Itatake Sleeper Cell Legendo WarmBreeze Studios NORRKÖPING Zoink Games Entertainment Goes International MindArk Zoink HELSINGBORG Mindshed Frictional Games VISBY Localize Direct Meow Entertainment Pixelbite Three Gates MALMÖ Massive MOTALA Ayeware Mediocre Code Club LINKÖPING Binary Peak Ozma Boldai Blastdoor Interactive Planeto Chillbro Color Monkey ProCloud Power Challenge Global SouthEnd Productions Redikod Spelkultur Malmö Simplygon Illusion Labs KARLSHAMN Forgotten Key Imperial Games Studio Star Vault 12 O’Clock Studios Noumenon Games Leripa Swedish Game Development Coastalbyte Redgrim Mandelform Tarsier Studios Custom Red Tarsier Studios MUNICIPALITY Employees % of total Companies % of total 1. Stockholm 1131 57,5 50 34,5 2. Malmö 357 18 18 12,4 3. Göteborg 105 5,3 18 12,4 4. Skövde 75 3,8 14 9,7 5. Umeå 92 4,7 8 5,5

LOCATION OF COMPANIES part, Gothia Science Park’s proximity to the University of Skövde with its Game Development program and the The above table shows the largest municipalities ranked by national projects run by The Game Incubator has played a number of employees and number of companies. significant part in the success. Several companies have taken The ranking is based on the combined percentage units of the step from students to multimillion turnovers with dozens each category’s total share and does not take the of employees, often with high profile victories in the Swedish companies’ turnover into account. Uppsala is in sixth place Game Awards as a common denominator. with 6 companies (4.1 percent of the total) and 103 employees (5.2 percent of the total). Although Easy Studios and Ghost are legally part of DICE as business units, it is important to point out that they essentially One of last year’s most notable relocations was Starbreeze’s act as individual studios with separate offices and move from Uppsala to Stockholm. Arrowhead also migrated management: Easy is located on Södermalm in Stockholm to the capital. and Ghost is situated in Gothenburg. Easy develops free- to-play games and Ghost is working on Need for Speed: Karlshamn and especially Skövde are two regions where Rivals. game incubators have been very successful. For Skövde’s

YEAR OF REGISTRY

1995-99 8

2000 6

2001 0

2002 7

2003 5

2004 4

2005 4

2006 10

2007 12

2008 13

2009 14

2010 20

2011 34

2012 6

Europa Universalis IV, Paradox Interactive 0 5 10 15 20 25 30 35

(The data is based on registration year of active companies, though a company may have been founded or active before then)

Game Developer Index 2012 | 12 GAME SALES sourced direct from annual company relation to development costs: A game accounts, directly from developers developed by one or two developers Below is a selection of Swedish best- and publishers as well as third parties, can equally count as a success with sellers over the past decade. The list such as NPD och VGchartz. Launched fewer units sold than a large AAA contains several older retail games, but refers to the year when the game was release. as sales figures for digitally distributed released and Data provides an indica- games are revealed, several of them tion of which year the sales figure is will enrich future reports. Sales data is derived. Note that sales success is in

TITLE DEVELOPER SALES PUBLISHED DATA Minecraft* Mojang 33 000 000 2011 2013 DICE 17 000 000 2011 2013 Battlefield: Bad Company 2 DICE 12 000 000 2010 2012 Battlefield 2 DICE 11 000 000 2005 2011 Far Cry 3 Ubisoft** 4 500 000 2012 2013 Just Cause 2 Avalanche Studios 3 200 000 2010 2013 DICE 3 000 000 2002 2004 Battlefield: Bad Company DICE 2 320 000 2008 2010 Mirror’s Edge DICE 2 500 000 2008 2013 Magicka Arrowhead 2 300 000 2011 2013 1 580 000 2013 2013 Battlefield 1943 DICE 1 444 000 2009 2010 Battlefield 2: Modern Combat DICE 1 330 000 2005 2010 Just Cause Avalanche Studios 1 300 000 2006 2010 Starbreeze 1 137 000 2007 2011 Battlefield Vietnam DICE 1 000 000 2004 2004 Rallisport Challenge DICE 900 000 2002 2006 World’s Scariest Police Chases UDS 800 000 2001 2010 Headhunter Amuze 700 000 2001 2010 Rearmed Grin 699 000 2008 2010 The Chronicles of Riddick: Assault on Dark Athena Starbreeze 691 000 2009 2011 World in Conflict Ubisoft Massive 650 000 2007 2010 Terminator Salvation Grin 620 000 2009 2010 Krakels ABC: Det magiska äventyret Pan Vision 608 369 1999 2010 Backpacker 2 Aniware 600 000 1997 2010 Crusader Kings II Paradox Interactive 540 000 2011 2013

*Whereof 12 million PC, approx. 10 million mobile (Pocket Edition) and the remaining on Xbox 360. **With, among others, Swedish studio Massive Entertainment

13 | Game Developer Index 2012 AVERAGE reviews in the gaming media around collected ratings, which means the the world. The ratings database assessments of certain media have REVIEW SCORES works as a form of standard- more impact on the Metascore that is Swedish developed computer games ized benchmark of the qualities of a given. Below, a selection of Swedish are not only worthy of attention game. It collects ratings from a wealth games from 2009 onward is listed. because of their high sales figures; of media and publications in several several titles have received grand different countries. Unlike a traditional average rating, Metacritic weights the

TITLE DEVELOPER METASCORE PLATFORM YEAR 87 iOS 2013 Far Cry 3* Ubisoft (med Massive) 91 Xbox 360 2013 Coffee Stain Studios 78 PC 2013 Brothers: A Tale of Two Sons 86 Xbox 360 2013 Europa Universalis IV Paradox Interactive 85 PC 2013 Knytt Undergound Nifflas 79 iOS 2012 Crusader Kings II Paradox Interactive 82 PC 2012 Talawa Games 78 iOS 2012 War of the Roses Fatshark 73 PC 2012 Syndicate Starbreeze Studios 75 PS3 2012 LittleBigPlanet Vita Tarsier Studios 88 Vita 2012 86 PS3 2012 NightSky Nifflas 86 iOS 2011 Bloodline Champions Stunlock Studios 79 PC 2011 Anthill Image & Form 82 iOS 2011 Avalanche Studios 81 Xbox 360 2011 Payday: The Heist Overkill Studios 76 PC 2011 Minecraft Mojang 93 PC 2011 Battlefield 3 DICE 89 PC 2011 Magicka Arrowhead 74 PC 2011 Hamilton’s Great Adventure Fatshark 77 PC 2011 Ilomilo Southend Interactive 81 Xbox 360 2010 Amnesia: The Dark Descent Frictional Games 85 PC 2010 Battlefield: Bad Company 2 DICE 88 PS3 2010 Just Cause 2 Avalanche Studios 84 PC 2010 Puzzle Dimension Doctor Entertainment 83 PC 2010 Battlefield 1943 DICE 84 Xbox 360 2009 3 Paradox Interactive 77 PC 2009 Southend Interactive 76 Xbox 360 2009 Mirror’s Edge DICE 81 PC 2009 R-Type: Dimensions Southend Interactive 76 Xbox 360 2009 The Chronicles of Riddick: Assault on Dark Athena Starbreeze 82 Xbox 360 2009

The listed Metascore were read on September 5th 2013. For more information, visit http://www.metacritic.com.

Game Developer Index 2012 | 14 REVENUES OF Although King’s numbers impress, it is when there are no traditional sales of difficult to compare statistics of differ- packaged goods. FREE-TO-PLAY ent types of free-to-play games. Free-to- King is the number one developer of play is not a genre in itself and can be BENCHMARKS social games, i.e. games on as varied as any other game. Easy There are countless ways to measure Facebook or similar social networks. Studios’ Battlefield Heroes has 17.7 the revenues of a free-to-play game. The company has developed hundreds million registered users, a small num- Almost every single developer has in- of games with an approximate user ber compared to the user base of King ternal systems for how to do this, while base of 255 million active players or Stardoll, but with the type of game rarely commenting on monetization for every month. Since the games are free- and payment model considered – a reasons of competition, which hampers to-play, revenue is primarily generated game in which each user on average a general estimation. Nonetheless, this through micro transactions. Facebook plays much longer than gaming ses- is an attempt to summarize some of the has over one billion users, one-seventh sions for social games – Easy’s users most common and powerful means of of the world population, and is perfect are likely spend more time in total. measurement as an indication of the target audiences for casual games popularity and revenues of free-to-play. since the users have already established themselves digitally in an A common denominator of many free- online community. to-play titles is a focus on the number of registered users and how many of Free Lunch Design has developed two these play a particular game daily or distinct titles for Facebook, Icy Tower monthly. This serves as a benchmark and Hello Adventure. The latter was for potential advertising revenues, nominated for the 2012 Golden if advertising is the model at play. Joystick Awards for Best Browser Another important factor is the gamers Game. Icy Tower has in turn been that pay for more content, which can played by millions of users on social be measured in Monthly Average networks and enjoys over 200 000 Revenue per Paying User. You can also active users every day. Icy Tower About 20 percent of King’s active users derive revenues generally amongst Classic, a remake of the original, is on Facebook pay for premium content: both paying and non-paying users by downloaded a million times a month. in-app purchases that extend and/ measuring Monthly Average Revenue The popularity of the game has or enhance the gaming experience. per User. spawned new versions of Icy Tower 2, There is no longer any doubt whether for example Temple Jump and Zombie it is possible to make money on free- •Total registrations Jump. to-play games; the question is rather •MAU – Monthly Active Users how it works, and what standards are •DAU – Daily Active Users available to account for the impact, •MARPU – Monthly Average Revenue

Pic: Icy Tower 2, Free Lunch Design

Candy Crush Saga, King

15 | Game Developer Index 2012 Per User which 50 clicked on it •MARPPU – Monthly Average Revenue CPM •”Games” was also viewed by 5000 Per Paying User •Total cost for running the ad is visitors of which 115 clicked on it $40,000 •”Apps” has an eCPM of $ 10 Comparing different platforms or •The total estimated audience is (50/5000*1000) social networks is still difficult because 5,000,000 people •”Games” has an eCPM of $ 23 developers sometimes use in-house •CPM is calculated as: (40 000/5 (115/5000*1000) systems for measuring unique visitors, 000 000)*1000 = $8 per thousand and have different definitions of what views Games that act as advertisement space constitutes a ”unique” visitor. are thus paid by the advertiser per Choosing a eCPM campaign over a thousand impressions depending on Simply put, there are essentially two click-based one may be done for a the above, and in some cases, other sources of income. One is through number of reasons. It usually has to do variables. Many developers, especially adverts that appear either within the with the kind of media in use and the those who do not hold heavy positions games, in loading screens or menus. In nature of the ads. In many cases, it is on social networks, have testified that those cases, DAU is a good bench- more appropriate that someone just the focus has shifted from ad revenues mark which gives an indication of views an ad rather than clicks on it, to sales of premium content. In other how many users play daily. The other especially in video games. words: users would rather pay for source is the consumers who pay sub- more content than click on ads. One scription fees or micro transactions for eCPM (Effective Cost per Mille; effec- reason that led some developers to premium content. This can be tive cost per thousand ad impressions) focus less on Facebook as that is the measured by MARPU and MARPPU, is used by developers as a benchmark market seen as a battleground for the i.e. how much revenue a user on to compare what effect a eCPM ad largest handful of companies. These average generates monthly. would have had were it a Cost per developers typically see Facebook click (CPA) or Cost per Acquisition more as an opportunity to promote Another useful measure of ad-based (CPA) campaign instead, in order to their mobile games. free-to-play games is eCPM. eCPM focus on the form that generates the (Effective cost per mille is the cost of a best revenue for the time being. thousand ad impressions) is a bench- NEW SERVICES, NEW mark long used for advertisement in eCPM PIRACY TARGETS radio, television, newspapers, and the Digital services are sometimes web for calculating the profitability •There are two banners: ”Apps” and ”Games” considered to be at less risk of piracy, and revenues of campaigns. Payments and there are certainly advantages to the publisher/developer of a game •The publisher earns $ 1 per click •Both banners were published for the over physical distribution, which is are then based on views per thousand easily subjected to unauthorized people. duration of one week •”Apps” was viewed by 5000 visitors of dissemination through file sharing or

This pyramid examplifies how King.com divides its audience by different revenue models. Everyone playes the same game, but different approaches are required to make it profitable. HEAVY PLAYER • Heavy player: The most ardent and skillful players gather at the top of the pyramid. They play for the sake of challenge and participate in various tournaments.

Paying player: These players do not want ads in their games. They buy virtual items to PAYING PLAYER • facilitate or enhance the gameplay.

• Average player: The majority of players assemble at the bottom of the pyramid. AVERAGE PLAYER They are casual gamers who want to play for free and thus generate revenue

Game Developer Index 2012 | 16 Sanctum 2, Coffee Stain Studios

pirated discs. That said, even digital games sold at retail or via mail order, This report studies developer revenues, services can be exposed to various on discs or other physical storage but this must not be confused with the types of intrusion and unauthorized media. This distribution model is based value of a game’s total sales in the use, even if it is usually a case of hack- on high prices, high volume, high de- value chain. For game developers op- ing or trademark infringement rather velopment costs and large investments erating in the digital value chain, most than copyright infringement. Examples in marketing. The game developer typi- of the consumers’ payments are visible of this are fake websites that sell cally assigns the rights to a publisher, in the company’s annual report, but for accounts to popular games, hacked for royalty advances that constitutes the those who sell games mainly through user accounts, pirate servers for online development budget, having the physical distribution, the actual sales games and hacked credit card details. publisher responsible for marketing tend to be four to ten times greater. In Paid apps on mobile marketplaces are and distribution. The developer’s addition, international business groups also affected, though more by tradition- revenue is then only a fraction of the account their revenues in different al file sharing via established torrent consumer’s investment. Today, develop- ways that further complicates a fair and bitlocker services. Several game ers adhering to this business model are assessment. developers have testified in interna- commonly owned by a publisher. tional press about how logins on their The future of physical distribution is mobile servers are many times higher Digital distribution, on the other hand, much debated in light of the accom- than the number of actual apps sold, is characterized by low prices (often plishments of digital game services. confirming the picture. Digital services free-to-play or freemium), low volumes In 2013, however, new versions of thus have many advantages for game and low investment costs. The devel- game consoles Xbox and Playstation developers, but it is no final solution to oper either sells the games directly to are anticipated for release, along with the problem of unauthorized usage. the audience or via an intermediary, consequent game releases. It is worth such as , GamersGate, App noting that more AAA development Store, Google Play, Xbox Live Arcade projects than ever before are taking VALUE CHAIN and others. The middleman usually place in Sweden, somewhat in the There are basically two main value takes 30% of revenues, and normally background of the attention surround- chains for video games: physical and does not contribute with investments in ing the digital services. digital distribution. The former include communication.

17 | Game Developer Index 2012 Tom Clancy’s The Division (in development), Massive Entertainment

DIGITAL MIDDLEMEN second game Scrolls has reached open based in many locations, spread out New distribution channels require beta, offering players to buy a trial geographically. new intermediaries and in the wake of version of the game. Meanwhile, digital game services a number of new Mojang has announced that it’s work- Fatshark and Paradox Interactive sub-categories emerge, for instance ing on its own server solution – continue to collaborate. War of the within marketing, analytics, technology Minecraft Realms – which allows Vikings, a further development of the and payment services. Meanwhile, players to more easily control and War-of franchise that started in 2012 marketplaces such as App Store, maintains their own game world for with the acclaimed War of the Roses, Google Play and Facebook get more a subscription-based fee. The studio was announced in August 2013. important. They do not act as plans to release Minecraft on Paradox will also release its flagship retailers in a formal way, but in Playstation 3, Playstation Vita and the title Europa Universalis IV in 2013. practice they constitute powerful and upcoming pair of HD consoles. Earlier important middlemen who often have this year, and Jens King continues to expand and has significant impacts on how games Bergensten were included as the only opened up another office in Malmö. reach their audiences. Swedes on Time Magazine’s TIME The studio is increasingly committed 100. to mobile platforms, and has great potential to step up its strong growth. OUTLOOK The Swedish DeNA studio Scattered Thanks to the viral buzz of King’s Considering 2011 and 2012’s Entertainment are releasing its first games, games such as Candy Crush phenomenal growth, the future of game The Drowning in 2013. It’s free- Saga have become something of a Swedish to-play and has received considerable pop culture phenomenon, certainly looks bright. And from what we have attention for its graphics, described as benefitting the brand in a user-based already witnessed in 2013, it is clear a milestone for mobile game community. that the industry will continue to grow development. The studio’s vision is to for the foreseeable future. Mojang offer the kind of production values and Starbreeze acquired Overkill released Minecraft for physical sale for depth normally reserved for console Software in 2012, the developer Xbox 360, and topped sales charts in or PC games. Scattered Entertainment behind Payday: The Heist. In August numerous countries. The studio’s is based in Stockholm, but employees 2013, Starbreeze announced that pre-

Game Developer Index 2012 | 18 Beat Sneak Bandit, Simogo War of the Vikings (in development), Fatshark

liminary earnings of Payday 2 covered The international expansion is also millions – that once put Sweden on 100 percent of advances and progressing; DICE follows in the the map. And it has never been more marketing costs from publisher 505 footsteps of Avalanche and opens a obvious that this kind of production still games, one week before the game development studio in the US. Unlike flourishes. was even released. During the same Avalanche, which has an office in month, Starbreeze launched New York, DICE has chosen Los DICE had already announced Brothers: A Tale of Two Sons, its first Angeles as the address for its Battlefield 4 ahead of E3, but still had game since Syndicate. The game expansion. a few nice surprises in store. Mirror’s was met with a very favorable critical Edge 2 is a hotly anticipated follow-up acclaim. Brothers was also selected SWEDISH AAA IN TOP SHAPE to the studio’s cult classic, as one of four games on ’s Electronic Entertainment Expo (E3) in usually presented as shining example annual sales campaign A Summer of is one of the biggest and of Nordic design. DICE also reported Arcade. The studio is currently devel- most prestigious events in the business, that they are working on a new Star oping the science fiction game Storm. and a classic stage for showcasing Wars Battlefront – one of the most big, up-coming games. From the titles popular Star Wars games ever. Rovio Sweden has enormous potential, being presented it’s clear that this was of course, both to create qualitative Swedish gaming’s strongest E3 ever. Another developer in the Swedish EA sales hits and to contribute to the network is Ghost in Gothenburg. The monetary development of the business. We have known for a long time that studio is working on Need for Speed: However, the studio will file its first -an the Swedish gaming industry is doing Rivals, which is released in autumn nual report in 2013 so the figures are well. Records and milestones have 2013. Avalanche Studios also lifted not included in this year’s index. been piling up in the last few years, the lid and revealed a game based on with export successes, innovations Mad Max. The game will be Magicka developer Arrowhead and creative reinventions hot on the accompanied by a new film, planned is working on Helldivers – a new heels. Sweden enjoys an almost unique for next year. trademark – for Entertainment. position with its wide range: mobile In 2014, the game will be released games, Facebook games, independent It is a busy time in Sweden’s largest on Playstation 3, Playstation 4 and developers, great technical compe- cities. The Malmö studio Massive Playstation Vita. Stunlock Studios is tence and huge export hits. Entertainment premiered The Division, working on : Epidemic for an action based role play game signed publisher . But it was AAA productions – big Tom Clancy, and in Uppsala development projects with budgets of MachineGames are working on

19 | Game Developer Index 2012 NORDIC COMPANIES NORDIC TURNOVER NORDIC EMPLOYEES Danmark (2011) 125 Danmark (2011) 58 Danmark (2011) 615 Finland (2012) 150 Finland (2012) 250 Finland (2012) 1800 Island (2011) 10 Island (2011) 50 Island (2011) 470 Norge (2010) 52 Norge (2010) 25 Norge (2010) 353 Sverige (2012) 143 Sverige (2012) 425 Sverige (2012) 1967 Totalt i Norden 480 Totalt för Norden 808 Totalt i Norden 5205 N:o of companies M Euro N:o of emloyees

Wolfenstein: The New Order. Swedish free) to update the games once they is well on its way of becoming the first developers’ international imprint has are released for sale. large western publisher whose digital never been bigger. When Sony presented Playstation 4 at share is larger than the physical. this year’s E3, the approach towards CONSOLES developers was one of the key issues. EA’s biggest sales partner during When Nintendo’s U was intro- Sony promised to slim down DRM** the first quarter of 2012 was Apple. duced on the market in late 2012, and was lauded for their attitude Moreover, these partners include the time had finally come for a new towards gamers and developers. Walmart and GameStop. An interest- console generation. Historically, it has ing development, neatly illustrating the been difficult for third party develop- This democratization process is evident trend towards new intermediaries. ers to gain a foothold on Nintendo’s in several ways. Many technical platforms, but offered a broader companies, such as Swedish GLOBAL scope with Nintendo concentrating Simplygon, can attest to making their services accessible also for indie The audit firmPricewaterhouseCoopers more and more on games distributed (PwC) estimate in their report Global via the console’s online shop. So far, developers, via the popular graphics engine , amongst other things. Entertainment and Media Outlook Wii U has had modest sales, but the 2013-2017 that the global computer potential is undeniably there. The con- game market will grow with a CAGR trol system can be likened to a of *Previously, developers have been given specially made debug consoles, of 6.5 per cent. In order to reach a traditional hand controls and pressure global turnover of 86.9 billion dollars sensitive tablets, which makes it stand able to run games in the development stage, which has made it complicated in 2017, compared to 63.4 billion in out among its competitors. Wii U is 2012. Nintendo’s first HD console (offering a for some developers to work with the platform. screen resolution of at least 720p). Double-digit CAGR growth is forecast- ed in countries like Nigeria, Kenya, Both Sony and Microsoft aim to launch **Digital Rights Management. A way to limit unlawful gaming and piracy. India and Vietnam. It is of course their new consoles - Playstation 4 and easier for countries that have long respectively – in time for DRM has been criticised for its limited usability. been lacking an existing games market the 2013 Christmas trade. Already to experience this kind of growth, but they have been applauded by many it is undeniably a good sign for the developers for their attempts at further PUBLISHERS future, also for Swedish companies democratizing game development, i.e. The publishers’ role has changed with wishing to widen their reach. Russia is making it easier for anyone to cre- time, too. Figures from western pub- by far the brightest shining star among ate and sell games on the platforms. lishers have shown that console users the potential gargantuan markets, and Microsoft has, for example, spoken of are fairly eager to buy. A comparison is on its way to become the eighth a solution which means every Xbox of user and number of units – installed biggest in the world around 2017. One console can be transformed into a user base – shows that EA has sold Eastern Europe also shows signs of debug unit*, which would mean great games to a value of 300 million good growth. possibilities for smaller developers and dollars to iOS which has 600 million enthusiasts. Free pricing has also been users, whereas the HD consoles have If we are to believe PwC, the three mentioned as well as freer reigns in sold games worth over 600 million dis- biggest gaming markets of 2017 are the verifying process, less bureaucracy tributed amount 150 million potential US (18.2 billion), Japan (13.7 billion) and a system that makes it easier (and users (PS3 an XB60). Furthermore, EA and China (11.4 billion).

Game Developer Index 2012 | 20 The mobile games market will be the in 2012. We have previously seen the first quarter of 2012. At the same fastest growing gaming sector in the Blizzard localize in time, worries are expressed over the next few years. But the console market Russia, and in recent times Valve has fact that 90 per cent of the turnover is still the biggest, and it will still, talked about the country as the third is based on the giant online games according to the forecast, be more biggest market in Europa (based on market (27 per cent of the world mar- than twice the size of the mobile game revenue) after Germany and Great ket, second only to China). Compared market in five years (14.4 billion com- Britain. This despite Russia being with Sweden for example, this looks pared to 31.2). hampered by piracy. very different with a relatively even distribution of various kinds of gam- expenditure is continu- Russia’s mobile games market grew ing experiences. At the same time, the ing to increase and is expected to be by 180 per cent during 2012, mainly online games market is growing by just on level with console games in 2017, because of Android based phones and 1.1 per cent. However, South Korea when 97 dollars will be spent for every tablets. More and more stations has a safety net in the mobile games 100 dollars spent on console games. offer Wi-Fi. market, which is growing by almost 34 Although PC game sales seem to be per cent. stagnating, the platform is more alive *Mail.ru manages Russia’s biggest than ever, as platform-independent online gaming platform and mail online games are often played on PCs. client. The research also shows that the USA most loyal gamers are willing to spend According to NPD Group (Games Internet connections per household are 34 dollars per month on various Market Dynamics U.S.) the digital continuing to grow at a tremendous gaming services. proportion of the nation’s game sales rate. According to the report, half of was 40 per cent in 2012, compared the world’s internet use, both broad- to 31 per cent the year before. Simul- JAPAN taneously, total expenditure on games, band and mobile, will be in Brazil, Japan is expected to remain ahead China, India and Russia. has reduced from 16.4 to 14.8 billion of China in the entertainment sector dollars. until 2017, thereby continuing to be RUSSIA the second-biggest market, after the A survey by Mail.ru* shows that US. With a CAGR of 7 per cent, the gaming has increased by 240 percent market is valued at 13.7 billion dollars in the last two years, and reached a in 2017. value of over 900 million USD. Russia is increasingly starting to look like SOUTH KOREA the well-established markets in the South Korea’s games market increased West and in Japan. Online gaming by 18.5 per cent during 2011 until has grown immensely - 64 per cent

21 | Game Developer Index 2012 CONCLUSION The biggest challenges are surround- Games, the studio behind Hotline ing issues such as access to capital Miami; and Hörberg Productions Twenty-twelve was the best year ever and skills, and laws and regulations which developed . for Swedish game developers. of digital markets, out of step with developments. There is also a problem with non- Minecraft continued its triumphant run game related parent companies, more with results that are probably unique precisely when a company’s game in the history of the Swedish industry. METHODOLOGY development operation is booked With Candy Crush, King.com has This report is a summary of annual under the parent company, which added yet another global hit to its list reports from the industry register of the means it cannot correctly be of merits. DICE’s Battlefield series is Swedish Companies Registration distinguished for the game developer continuing to sell millions of copies Office, from companies with game index. A problem shared by the also this past year. The specialized development or specialized majority of industry organisations. subcontractors, companies like subcontracting as a major part of their Simplygon, Hansoft and Game operations. Not included are game In the instances where annual reports Hosting, are displaying strong growth companies focusing on poker, have been unavailable, last year’s with companies rather than gamers as gambling or casino games. The numbers were used for results, turnover their clients. In the category historical method has several flaws: corporate and number of employees. These strategy games, Paradox is king of the forms other than limited companies companies are ProCloud and castle, both as developers and fall outside the scope of the data, as Semionetix. publishers. Stardoll are bringing do companies active in Sweden but gamers from all over the world. registered in other countries. For this The annual reports are in SEK, but for translation Massive and Avalanche are working reason, there is a grey zone, and key purposes the currency has been converted into tirelessly on AAA projects for future figures such as turnover and Euro. One Euro was considered to be worth launching. Starbreeze successfully took employment are all actually slightly 8,9 Swedish Krona (SEK), as this was the the step from console to online, at the higher than stated in this report. The approximate average exchange rate during 2011. same time as working with the film strength of the method is that the data director in the unique game is audited and published openly. project Brothers. The Start-up scene is bigger than ever and the works of Examples of developers that are not the incubators are starting to result in included in the report because of their established and profitable companies. corporate form, is Simogo, a studio All in all, the diversity is the strength of that has released Year Walk and a Sweden’s game developers. number of other commercial and critically acclaimed hits; Dennaton

Swedish Games Industry is a partnership Jacob Kroon Dataspelsbranschen Swedish Games Industry between MDTS and Spelplan-ASGD. For more Communications/Analyst Klara norra kyrkog 31, Box 22307 information, please visit: [email protected] SE-104 22 Stockholm www.dataspelsbranschen.se www.swedishgamesindustry.com. Per Strömbäck Spokesperson [email protected]

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