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Fgir-2020-Report.Pdf Front cover pictures: Fingersoft \\ Hill Climb Racing Futureplay \\ Merge Gardens Housemarque \\ Returnal Metacore \\ Merge Mansion Remedy Entertainment \\ Control Rovio Entertainment \\ Angry Birds Seriously Digital Entertainment \\ Best Fiends Small Giant Games \\ Empires & Puzzles Supercell \\ Brawl Stars Picture: Nolla Games \\ Noita INDEX 4 \\ Introduction 7 \\ The History of the Finnish Game Industry - From Telmac to Stock Markets 16 \\ The State of the Finnish Game Industry 20 \\ Studios 22 \\ Location of Companies and Clusters 24 \\ Platforms 26 \\ Developers & Diversity 30 \\ Financial Outlook 32 \\ Impacts of COVID-19 38 \\ Financial Support and Funding 42 \\ Strengths and Challenges 46 \\ Game Industry Support Organizations 46 \\ Lessons Learned – Visions of the Future 62 \\ Studio Profiles Picture: Redhill Games \\ Nine to Five 3 INTRODUCTION ABOUT THIS REPORT the spark of creativity carried out from October which helped to start 2020 to February 2021 ■ In 2020 the Finnish the industry is still and augmented by data Game Industry celebrated burning bright. Despite from other sources. This its 25th anniversary. the financial success, the study is a continuation of The two oldest studios, Finnish Game Industry similar studies conducted Housemarque and has not stagnated. in 2004, 2008, 2010, 2012, Remedy, turned 25 years Creativity and passion for 2014, 2016 and 2018. old and the founding making good games are Altogether 70 game of those studios marks still very much present. companies, members of the starting point of the This publication Suomen Pelinkehittäjät Finnish Game Industry as aims to provide a ry (Finnish Game we know it today. During holistic overview of the Developers Association), those 25 years many Finnish Game Industry are introduced in the things have changed and in 2020. The data and Studio Profiles section, as the Finnish Game Industry information presented well as the most relevant has transformed from a in the following pages is game support industry hobby for recreational based on interviewing 134 organizations. enthusiasts to the biggest key studios from about We wish to thank cultural export industry 200 game developers in everyone who has in Finland. However, Finland. Interviews were participated in this 4 process. Special thanks to Suomen Pelinkehittäjät ry (Finnish Game Developers Association), Business Finland, City of Helsinki and all the interviewed game studios for their support. TEAM NEOGAMES KooPee Hiltunen Suvi Latva J-P Kaleva Elina Tyynelä Picture: Cornfox & Brothers \\ Oceanhorn 2 5 6 HISTORY The History of the Finnish Game The first game to be distributed Industry - From Telmac to Stock internationally was Sanxion, which debuted in 1986. Markets 1987 to 1995 - Professionalism 1979 to 1986 - The Beginning FROM INDIVIDUAL DEVELOPERS TO FROM FINLAND TO THE GAME DEVELOPMENT TEAMS INTERNATIONAL MARKET Up until the early 1980s, games were The first known Finnish digital game typically innovations led by a single was released as early as 1979: Chesmac, developer. However, towards the end of a chess game designed by Raimo Suonio. the decade, game developers begun to However, serious game development cooperate, giving rise to the first game efforts did not begin until home development teams. computers gained popularity in the A major boost came from game beginning of the following decade. developer events, including the notable At first, game development was Assembly, which was first organised mostly a hobby, but in the mid-1980s, in 1992 and continues to date. These developers released the first commercial gaming teams, i.e., demo groups, also games. These early game releases gave rise to the first Finnish game targeted the domestic market. studios. Picture: Sulake \\ Habbo Hotel 7 HISTORY The oldest Finnish gaming companies studios of the first wave. Successes, still in operation, Housemarque and though, were had on other fronts. In Remedy Entertainment, are strongly PC and console games, Housemarque’s rooted in these demo groups. Supreme Snowboarding and Remedy’s Max Payne proved big hits, and Sulake’s 1996 to 2000 - First Wave Hotel Goldfish (later Habbo Hotel) THE FIRST SUCCESS STORIES AND became an internet sensation. MOBILE GAME STUDIOS 2001 to 2004 - The Difficult Years In the mid-’90s, games were mostly FLYING HIGH AFTER developed for home computers. HITTING ROCK BOTTOM However, 1999 saw a major shift when Nokia introduced the WAP standard, Despite a few successes, the early 2000s which seemed like a promising platform were a difficult period for the Finnish in terms of game development. Several Game Industry. Risky investments game studios were set up in its wake, in gaming were halted, and despite and the Finnish Game Industry saw its a promising start, mobile game first boom. development also ground to a halt. WAP did not, however, meet Publisher-driven PC and console game expectations, and with the downfall development was too challenging for of WAP down went the mobile game most small game studios. 8 HISTORY Luckily Nokia saw a business the handset, including investments in opportunity in mobile games. Nokia Finnish companies and their games. was confident that its N-Gage PDA, The N-Gage failed. The device was launched in 2003, would revolutionize expensive to manufacture, clumsy to mobile gaming and therefore invested play on and games were distributed only in the development of game content for in traditional brick-and-mortar stores. Still, the foundation for the mobile game ecosystem had been laid, and a number of new game studios were established in 2003–2005, including Sumea (later known as Digital Chocolate) Mr. Goodliving and Universomo. 2005 to 2009 - Moderate Growth THE ERA OF A MATURE MARKET Towards the end of the 2000s, the Finnish Game Industry ecosystem continued to grow steadily. What was once a hobby had finally transformed into a serious sector of its own. Picture: Rovio \\ Angry Birds 9 HISTORY However, growth was relatively slow. The turnover of the game industry grew from around 40 million euros in 2004 to approximately 87 million euros in 2009. The relatively slow growth is explained by the value chain of the distribution of the games, which was functional but not particularly profitable for the game developer. But change was coming. 2010 to 2011 - A System in Turmoil BALANCE OF POWER REVOLUTIONISED BY MOBILE DIGITAL DISTRIBUTION The digital distribution of games became the true driver of change in the gaming industry. Digital distribution first began on a PC platform but later expanded to consoles and smartphones through Apple’s App Store and Google Play. 10 Picture: Nitro Games \\ Heroes of Warland HISTORY The new distribution methods 2012 to 2016 - The Perfect Storm represented a change in the balance of MICROPAYMENT MODEL power within the industry. With digital distribution and app stores, game Supercell was the first mobile gaming developers were able to reap 70 % company to successfully apply the profits instead of the former 15–25 %. micropayment model to a mobile game, This made a huge difference, and Rovio’s skyrocketing Hay Day and Clash of Angry Birds and its sequels were among Clans to the top of the most profitable the first to benefit from these new games list, where they stayed for several opportunities. years. As markets opened and international Supercell’s success further increased investors started to take interest and international interest in Finnish gaming, make investments in Finnish companies, and both investments and the industry the number of game studios blew up. The turnover surged in 2012–2015. In 2015, turnover of the industry almost doubled the Finnish Game Industry reached in just two years, from approximately the milestone of two billion euros in 87 million euros in 2009 to 165 million turnover. euros in 2011. Despite the strong focus on mobile games, Finnish companies continued to design games for other platforms, too. 11 HISTORY Remedy’s success stories Alan Wake, than 50 people and have a turnover Quantum Break and Control, and of more than 10 million continued to Colossal Order’s success story Cities: increase. In 2019 four companies reached Skylines are excellent examples of the €100 million mark in their turnover. Finnish competence in design for non- The number of employees in the mobile platforms. industry grew to 3 200 by the end of 2018. In international comparison, Finland 2017 to 2019 - The Years of Establishment was placed within the top three game STABILISATION AND ENTRY TO developer countries in Europe. 2019 STOCK MARKET can be summarized simply as business as usual. The turnover of the industry 2017 was a year of stabilisation for the remained over the €2 Billion mark, the Finnish Game Industry. The listing of total turnover being €2,2 Billion for that four Finnish gaming companies was a year. key milestone – and a sign of a new level of maturity in the business. 2020 – Towards the New Normal From 2017 to 2019 the industry also EMERGING MARKET DISRUPTIONS AND went through structural development, COVID-19 and the “prosperous middle class” of gaming studios grew significantly. The In early 2020 COVID-19 hit the world. number of companies that employ more The global pandemic changed many 12 HISTORY things also in the game industry. Game Industry seemed to be ready to Events and gatherings were postponed, change and somewhat resilient against cancelled or moved online. Game the financial impact of the pandemic. companies went to remote working Lockdowns and curfews increased game mode and many previous practices e.g., downloads and gaming in general, and recruiting employees abroad, became the industry’s turnover increased also in more difficult. However, the Finnish Finland. At the same time, global regulatory fragmentation and increasing tensions between leading games industry value chain platforms and service providers made markets much more unpredictable. In the end of 2020, there were 46 established studios across Finland with over €1 million turnover. On the other hand, for some of the start-ups and non-established companies COVID-19 has been a death blow due to the cancellation of events and the difficulties in finding an investor or publisher.
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