FRONT COVER Fingersoft • Hill Climb Racing 2 Futureplay • Battlelands Royale Next Games • The Walking Dead: Our World Rovio Entertainment • Angry Birds 2 Small Giant Games • Empires & Puzzles Supercell • Brawl Stars, Clash Royale, Clash of Clans and Hay Day BACK COVER Remedy Entertainment • Control Housemarque • Stormdivers SecretExit • Zen Bound 2 Rival Games • Thief of Thieves: Season One Superplus Games • Hills of Steel Critical Force • Critical Ops Frogmind • Badland Brawl Nitro Games • Heroes of Warland Kukouri Mobile Entertainment • Pixel Worlds Tree Men Games • PAKO Forever Publisher Neogames Finland ry (2019) Index 1. Introduction 2. The History of the Finnish Game Industry - From Telmac to Apple 3. The State of the Finnish Game Industry 4. Studios 5. Location of Companies and Clusters 6. Platforms 7. Developers & Diversity 8. Financial Outlook 9. Challenges and Strengths of the Finnish Game Industry 10. Trends and the Future 11. The Industry Support and Networks 12. Education 13. Regional Support 14. Studio Profiles Picture: Seriously | Best Fiends 3 ABOUT THIS REPORT Neogames Finland has been augmented by data from other sources. monitoring the progress of the Finnish This study is a continuation of similar Game Industry since 2003. During these studies conducted in 2004, 2008, 2010, fifteen years almost everything in the 2014 and 2016. industry has changed; platforms, Over 70 Game companies, members technologies, the business environment of Suomen Pelinkehittäjät ry (Finnish and games themselves. However, the Game Developers Association) are biggest change has taken place in the introduced on the company profile industry’s level of professionalism. pages as well as Business Finland and These days the level of professionalism the most relevant game industry in even a small start-up is on a level organizations and regional clusters. presented only by few in 2003. We wish to thank everyone who has This publication aims to provide a participated in this process. Special holistic overview of the Finnish game thanks to Suomen Pelinkehittäjät ry industry in 2018. The data and (Finnish Game Developers Association) information presented in the following and Business Finland for their support. pages is based on a total of 140 company interviews carried out from Team Neogames: October 2018 to February 2019, KooPee Hiltunen, Suvi Latva, J-P Kaleva 4 Picture: SmallGiant | Empires&Puzzles 5 History Picture: Supercell | Clash of Clans 6 History 1979 to 1986 - The beginning 1987 to 1995 - Professionalism FROM FINLAND TO THE FROM INDIVIDUAL DEVELOPERS TO INTERNATIONAL MARKET GAME DEVELOPMENT TEAMS The first known Finnish digital game Up until the early 1980s, games were was released as early as 1979: Chesmac, typically innovations led by a single a chess game designed by Raimo developer. However, towards the end of Suonio. However, serious game the decade, game developers begun to development efforts did not start until cooperate, giving rise to the first game home computers gained popularity in development teams. the beginning of following decade. A major boost came from game At first, game development was developer events, including the notable mostly a hobby, but in the mid-1980s, Assembly, which was first organised in developers released the first 1992 and continues to date. These commercial games. These early game gaming teams, i.e., demo groups, also releases targeted the domestic market. gave rise to the first Finnish game The first game to be distributed studios. The oldest Finnish gaming internationally was Sanxion, which companies still in operation, debuted in 1986. Housemarque and Remedy Entertainment, are strongly rooted in these demo groups. 7 History 1996 to 2000 - First wave Goldfish (Habbo Hotel) became an internet sensation. THE FIRST SUCCESS STORIES AND MOBILE GAME STUDIOS 2001 to 2004 - The difficult years In the mid-’90s, games were mostly developed for home computers. FLYING HIGH AFTER HITTING However, 1999 witnessed a major shift ROCK BOTTOM when Nokia introduced the WAP Despite a few successes, the early 2000s standard, which seemed like a were a difficult period for the Finnish promising platform in terms of game game industry. Risky investments in development. Several game studios gaming were halted, and despite a were set up in its wake, and the Finnish promising start, mobile game gaming industry saw its first boom. development also ground to a halt. WAP did not, however, meet Publisher-driven PC and console game expectations, and with the downfall of development was too challenging for WAP went the mobile game studios of most small game studios. the first wave. Successes, though, were Luckily Nokia saw a business had on other fronts. In PC and console opportunity in mobile games. Nokia games, Housemarque’s Supreme was confident that its N-Gage PDA, Snowboarding and Remedy’s Max Payne launched in 2003, would revolutionize proved to be big hits, and Sulake’s Hotel mobile gaming and therefore invested 8 History in the development of game content for into a serious sector of its own, the the handset, including investments in gaming industry. Finnish companies and their games. Growth was relatively slow, however. The N-Gage failed. The device was The turnover of the game industry grew expensive to manufacture, clumsy to from around 40 million euros in 2004 to play on and games were distributed approximately 87 million euros in 2009. only in traditional brick-and-mortar The relatively slow growth is explained stores. Still, the foundation for the by the value chain of the distribution of mobile game ecosystem had been laid, the games, which was functional but and a number of new game studios not particularly profitable for the game were established between 2003–2005, developer. But change was coming. including Sumea, Mr.Goodliving and Universomo. 2010 to 2011 - A system in turmoil BALANCE OF POWER REVOLUTIONISED 2005 to 2009 - Moderate growth BY MOBILE DIGITAL DISTRIBUTION THE ERA OF A MATURE MARKET The digital distribution of games was Towards the end of the 2000s, the the true driver of change in the gaming Finnish gaming industry ecosystem industry. Digital distribution began on a continued to grow steadily. What was PC platform but later expanded to once a hobby had finally transformed consoles and smartphones through 9 History Apple’s App Store and Google Play. 2012 to 2016 - The perfect storm The new distribution methods F2P MODEL represented a change in the balance of power within the industry. With digital Supercell was the first mobile gaming distribution, game developers were able company to successfully apply the to reap 70 % profits instead of the micropayment model, skyrocketing Hay former 15–25 %. This made a huge Day and Clash of Clans to the top of the difference, and Rovio’s Angry Birds and most profitable games list, where they its sequels were among the first to have stayed for several years. benefit from these new opportunities. Supercell’s success further increased As markets opened and international international interest in Finnish investors started to take interest and gaming, and both investments and the make investments in Finnish industry turnover surged from 2012– companies, the number of game studios 2015. In 2015, the Finnish gaming exploded. The turnover of the industry industry crossed the landmark of two almost doubled in just three years, from billion euros in turnover. approximately 87 million euros in 2009 Despite the strong focus on mobile to 165 million euros in 2011. games, Finnish companies continued to design games for other platforms, too. Remedy’s success stories Alan Wake and Quantum Break and Colossal 10 History Order’s success story Cities: Skylines are turnover of more than 10 million examples of Finnish competence in continued to increase. design for non-mobile platforms. The number of employees in the industry grew to 3,200 in the end of 2017 to 2019 - The era of 2018. In international comparison, establishment Finland was placed within the top-three game developer countries in Europe by GAMES INDUSTRY turnover. FROM 2017 ONWARDS The year 2017 was a year of stabilisation for the Finnish gaming industry. A key milestone was the listing of four Finnish gaming companies. In 2017 and 2018 the industry also went through structural development, and the “prosperous middle class” of gaming companies grew significantly. The number of companies that employ more than 50 people and have a Picture: Seriously | Best Fiends 11 First First commercial world class products mobile studios First The beginning still existing of 80s: home game computers & game First international companies Dot.com development First are founded & mobile as a hobby game release Assembly hype events Sanxion Picture: Fingersoft | Hill Climb Racing 12 Gungho & Softbank ac- 2004-2007 2011–2012 quired 51% of Angry First big Big internatio- Supercell Birds mobile game nal investments Movie studio to Finnish Game acquisitions Companies Four game F2P companies mobile VR & were listed AR on stock Digital mobile Zynga Investment 2012-2014 Tencent recession & distribution acquired 2nd round aqcuires Small the growth expands 80% of (Appstore) studio Giant of Nokia boom Supercell Max Payne Angry Birds Hill Climb Racing Quantum Break Supreme Snowboarding HayDay & Clash of Clans Empires & Puzzles Habbo hotel Clash Royale Best Fiends Brawl Stars Cities: Skylines 13 State of the Industry Industry in a Nutshell Compared to years 2004–2016 covered in Neogames’ previous studies, years 2017 and 2018 have been years of stabilization. The rapid growth of turnover in 2011–2016 has changed into a modest decline and the number of studios has decreased from 250 in 2016 to 220 in 2018. However, there seems to be an increase in the number of studios established in 2017 and 2018. According to statistics, 48 new studios were established 2017–2018 (45 new studios 2015–2016). In 2017 the listing of four Finnish game companies into the stock exchange was a major milestone for the industry.