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Battle lost in the plan for digital gaming jobs in Ireland
Original Article –
There’s little evidence of the extra 2,500 digital gaming jobs to which Richard Bruton aspired in his 2011 initiative, says John Hearne
The photos accompanying the CDT press release featured a grinning minister posing with a game controller, and made much of Ireland’s competitive advantage in video games.
“The task now is to sustain the momentum we have created in this sector and see through the creation of the jobs we need,” he said. “I am convinced that, driven by the industry experts who have agreed to serve on this group, that can now become a reality.”
The country’s twin development agencies, Enterprise Ireland and the IDA, both had representation on the Clustering Development Team. But when contacted for this piece and asked about whether or not the jobs targets set out in the 2011 report had been met, an Enterprise Ireland spokesman declined to comment.
The Forfás report identified six key action areas. The first proposed the development of an international cluster “stimulating connectedness between related sectors, nationally and internationally”. The fourth talked about “raising Ireland’s visibility as a vibrant location for the games sector”. Both action points lie squarely in the IDA’s remit, but asked what has been done in relation to these points since 2012, the agency’s spokesman would only say that the CDT was preparing a report for Mr Bruton’s department. “IDA Ireland cannot comment on these actions in the interim,” he said.
Other CDT participants aren’t quite so reticent. Richard Barnwell is chief executive of Digit, the largest independent games development company in Ireland. He’s also a member of Games Ireland, an industry lobby group.
“We put a lot of time into that particular group,” he says, “but ultimately it was a waste of our time. No one on that board had any power, no one was actually listening. We did report after report and nothing happened. It ended up just being a big frustration for Games Ireland members.”
He goes on to say that while the thinking behind the clustering team was sound, the execution was poor and ultimately, all Games Ireland members pulled out.
Barry O’Neill, chief executive of children’s app developer, StoryToys, was the founding chairman of Games Ireland. He describes the CDT as ineffectual. “It served as nothing more than a talking shop for the industry and the games development community. Ultimately, it didn’t deliver any tangible results.”
The IDA says however that the CDT is still in existence, and that it is finalising another report. The spokesman said: “The group has considered a range of actions, including the area of skills and incentives like tax, and has engaged with relevant stakeholders and continues to explore this area.” He went on to say that a US games expert recently reviewed some of the courses in digital games offered by Irish universities, and that her report is also due “in the near future”.
But while reports may still be in the pipeline, there’s little evidence of the additional 2,500 jobs to which the 2011 initiative aspired. Back then, Mr Bruton’s department estimated that 2,500 people worked in the Irish games industry. The IDA’s current estimate is that there are approximately 30 state-supported companies in the sector, two thirds of which are IDA clients. Altogether, they employ 2,000 people.
That’s not everyone, however. There is a multiplicity of unsupported independent games studios out there. These range from small to tiny, and their numbers rise and fall continually.
Jamie McCormick lectures on game entrepreneurship in Pulse College and in DIT and helps to run the industry network and support project . He has done extensive research into the industry, and recently compiled a map which shows the nature and spread of all of the games companies across the country.
“There are between 150 and 160 companies on the island of Ireland,” he says. “We’ve seen a huge amount of company formation since 2009.” He doesn’t, however, have an accurate assessment of actual employment numbers.
While the numbers of small studios have grown rapidly over the last five years, we have also seen some significant job losses in the sector.
Blizzard cut 200 jobs in Cork in March 2012. PopCap Games pulled out of Ireland in September of the same year, with the loss of 96 jobs. In Cork, Big Fish closed a year later, leaving almost 90 people jobless.
But while our ambitions may have fallen flat, it would be wrong to assume that our games industry is dying on its feet. Ireland is still home to a range of high profile international names.
Activision and Culture Translate carry out games localisation activities here. Havok, Demonware and Swrve create middleware, which is embedded software designed to facilitate elements of game functionality.
“The operations of Riot, Webzen, and Red5Studios highlight the broader publishing capabilities here,” says the IDA spokesman, “and the impressive customer service and community management activities in EA/BioWare, Blizzard, Riot, Zynga and Zenimax demonstrate the ability of Ireland to support multilingual, pan-European, high-end customer support activities.”
The IDA clearly deserves credit for securing these investments, but the question remains. Why haven’t we managed to push on and realise the grand ambitions of that 2011 plan?
It’s not as if the industry is struggling internationally. Far from it. A recent report from games market research company Newzoo anticipates that industry revenues will grow by 6.7% to $86.1bn over the next two years. To put that number in context, the film industry posted what it regarded as a bumper year last year, with revenue of $34.7bn. Global recorded music sales in 2013 totalled $15bn. So even if you were to combine the music and film industries, their earnings would not come anywhere near to those of the games industry.
Nor is there any sign of a pause in that growth trajectory. That Newzoo report reckons that the number of gamers worldwide will rise from 1.21 billion this year to 1.55 billion by 2016. Mobile gaming alone will grow at an average annual rate of 19% for smartphones and an astonishing 48% for tablets, grossing a total of $23.9bn by 2016.
As far as the industry is concerned, there’s no great mystery why we haven’t doubled employment numbers over the past two years. Of the dozen or so games people interviewed, almost everyone pointed out that while Ireland was home to a range of high-profile games companies, very few new games were actually made in Ireland. Check that IDA list again: while we have big names in localisation, customer support and middleware, no international company has built a game in Ireland since PopCap and Big Fish shut down. This is significant because, as Richard Barnwell of Digit points out, content creation is the richest source of value in the industry. “The more games developers you get into the country, then the more creation happens, and creation generates IP (intellectual property). IP is where the value is created. Right now, Digit is the only developer in this country of any type of scale.” The company employs 20 people.
“Our game economy has been very much like a lot of other Irish sectors,” says Barry O’Neill of StoryToys. “It was built on the back-office model, so it’s been about running your sales office or supporting your localisation. There has been less about the creative talent. You need to get the creative talent in place to really build a sustainable industry because back office will move to the next most competitive economy once it’s run its course here.”
So, is it a question of lacking creative talent? Are Irish colleges producing the right kinds of graduates to fuel the native sector and to lure international developers?
There’s no clear consensus here. Jamie McCormick says that one of the key issues confronting colleges is the fact that the games industry changes very rapidly. He believes, however, that the sector is rising to that challenge, and he cites the games development courses at Carlow IT, DIT and the privately run Pulse College as particularly focused on industry requirements.
“I’ve just gone through a validation with Pulse College for one of the courses that they’re bringing on,” he says. “There, you have some of the most respected people in the industry teaching the next generation of developers.”
The core reason Richard Barnwell brought Digit from London to Dublin was to tap into our talent base. He says that in a previous life, he ran a games company in Cambridge and was used to hiring Cambridge graduates. “The people we’re finding here are just as capable, if not more capable, than those guys,” he says.
That’s not the full story, however. “Take the more traditional courses: maths, engineering, computer science and computer programming, especially those run at Trinity and UCD. These are great courses and the people we’re seeing coming off them are incredibly talented. We’ve hired quite a few. However, there are lots of courses appearing specifically designed for games development, and they’re not delivering.”
The problem, he says, is that creating a high-end game requires a range of skills that a one-year or two-year games development course cannot possibly impart. Digit hires mathematicians as engine programmers, artists to design games, and front-end developers to focus on the user interface. “Each of these guys will have degrees in their particular skillset, plus years of experience, whereas the development course tries to summarise all of that into half a year. It’s just not doable.”
Mr Barnwell goes on to say that his company has taken in games development graduates as interns, but hasn’t hired any of them. By contrast, half of Digit’s employees were brought in from abroad.
The other issue, as far as the sector is concerned, is state support, or rather the lack of it. One of the things the CDT has been lobbying for since it first came together is tax breaks.
Earlier this year, the European Commission gave the green light to a range of tax relief measures for games development in the UK. Under the terms of the derogation, the relief will be made available to games deemed to have cultural value.
The games industry association in the UK, TIGA, has said that over a five-year period, these initiatives could “generate or safeguard” over 4,500 jobs.
“Game development in the UK has absolutely exploded,” says Mr O’Neill of StoryToys. “Three years ago people were talking about brain drain from the UK to Canada. Now there’s a proliferation of small studios and spin-out studios from bigger studios that are availing of these incentives.”
When the industry campaigned for similar supports here, they were told the existing research and development (R&D) credits were the appropriate support mechanism. The industry disagreed. “Game development isn’t about solving a technological issue,” Mr O’Neill goes on, “it’s about creating entertaining products.”
It quickly emerged, when Games Ireland examined the R&D tax credit, that it did not allow investors to claim back creation costs. “I’m embarrassed to say this,” he goes on, “but at the moment, if you want to make a game on this island, head north to Belfast. It is absolutely the most competitive environment to make a game in.”
In addition to the tax credit now available to game developers in the UK, support is also available from Northern Ireland Screen, which is its version of the Irish Film Board. And this fact, that the industry is being backed by a cultural institution, gets to the crux of what’s really bothering the industry south of the border.
Games development companies do not identify as tech sector. They place themselves very firmly in the arts and culture space.
Using existing film and TV support infrastructure to back the digital games industry is common in other jurisdictions. Northern Ireland Screen’s is the government-backed lead agency for “film, television and the digital content industry”. In France, the Centre National de la Cinematographie has been supporting the industry since 2003.
“The economics of it are sometimes mixed with the emotive nature of the content,” says Mr O’Neill.
“It’s not like the tech industry; success is often about how you engage people emotionally, not economically. That gives us our much higher risk profile, and that’s why we have organisations like the Film Board because games are actually part of our culture, not our business environment. They need to be supported as such.”
So far, however, the games industry here been discouraged from applying for development loans to the Irish Film Board, says Mr O’Neill.
The indigenous sector continues to soldier on regardless of uninspired state support, company failures or a market in constant flux. StoryToys is working on licensing deals with a range of household name brands, while Digit has just released the second version of its marquee title, Kings of the Realm.
The conditions that the gaming sector faces may not be as harsh as the wartorn world that provides the backdrop for Digit’s fantasy adventure, but it’s not far off it.
“Games companies,” says Richard Barnwell, “they either succeed or they die. There’s no real in-between.”
Andrew Bond: Formed the company in Trinity in 1996.
ONE of Ireland’s best-known and most successful games firms, Havok, makes what’s known as middleware, wich sits behind the user application and enables much of its functionality.
Havok Physics and Havok Cloth, for example, are key components of its extensive suite of products. Both are all about realism in gaming. Physics is a physical simulation technology designed to make movement and collision look just like the real thing. Cloth brings the same integrity to character garments, hair, foliage, and ‘soft body objects’.
Innovations like Physics and Cloth have super-charged the company’s success; Havok technology has been embedded in more than 650 titles over the past 15 years. These include top franchises like Halo, The Elder Scrolls, Assassin’s Creed, Call of Duty, Uncharted, Dead Rising, and Skylanders.
Havok works with top publishers and development studios, including Microsoft Games Studios, Sony Computer Entertainment, Nintendo, Activision Blizzard, EA, Warner Bros, Interactive Entertainment, and Ubisoft. The company’s products have also been used to drive special effects in films like the Harry Potter, James Bond franchises and The Matrix.
The company was formed in 1996 when Steve Collins, Andrew Bond, and Willy Leeson began a project in the image synthesis group in Trinity College Dublin. The following year, the team expanded and shifted its focus onto the simulation of physics in educational games. These initiatives finally morphed into a commercial entity in 1999, and Havok was born. A year later, the first titles which used Havok technology began to appear.
The coming decade was one of rapid expansion as the company’s unique ability to model physical movement realistically became the gold standard in the gaming industry. Intel acquired the company in 2007 and the following year, they scooped the Technology & Engineering Emmy for development of advanced physics engines for videogames and movies.
Today, the company employs more than 100 people in offices in Dublin, San Francisco, Seoul, Tokyo, Shanghai, and Germany.
The Digit team and, below, chief Richard Barnwell, who says they can put hundreds of thousands of people into the same game world.
The Digit team and chief Richard Barnwell, who says they can put hundreds of thousands of people into the same game world.
DIGIT is the largest independent games development studio in Ireland by a country mile, and since there are no international games developers here, that makes it the largest games developer of any description in these parts.
Chief executive Richard Barnwell explains that the company began in London but moved to Dublin in 2012. “We decided that because there are no major game developers over here, we’d pretty much have a captive market for most of the talent in the city.”
The company employs 25 and so far it has secured over €3.5m in venture capital funding.
Digit’s first title, Kings of the Realm (KOTR) launched in September and is published by Kabam, a US-based game developer and publisher with revenues in excess of $360m. KOTR, Barnwell explains, is an MMO game, MMO standing for massive multiplayer online. As the designation suggests, this means that it’s capable of supporting very large numbers of players simultaneously.
Onsite, Kings of the Realm is described as a cutting-edge strategy game based in a fantasy world of conquest, alliance and betrayal.
“We’ve developed several unique bits of technology,” Mr Barnwell explains. ” One of them is called One Big World and this allows us to put hundreds of thousands of people into the same game world… On a daily basis, we can have tens of thousands of people going to war at the same time.”
Though he won’t reveal player or revenue numbers, Mr Barnwell says the team is “really happy” with how the game has been received.
“It’s got one of the highest star ratings on the Apple App store, and it’s been featured by Google in the number one spot.”
The nature of the business is such that developers continue to work on their games even after they’ve been released, developing new plot lines, characters and content to try and keep the user experience as fresh and engaging as possible. The second version of KOTR was released just before Christmas.
“Whether it’s going to be a super mega hit,” says Mr Barnwell, “we still don’t quite know. It will be another couple of months until we can see that.”
Barry O’Neill, CEO of StoryToys: Public domain intellectual property like the Grimm stories are great in that they are free brand. Everybody knows who Grimm is.
Barry O’Neill, CEO of StoryToys: Public domain intellectual property like the Grimm stories are great in that they are free brand. Everybody knows who Grimm is.
STORYTOYS specialises in entertaining apps for children. The company was formed in 2008 by brothers Aidan and Kevin Doolan and employs 20 people at its HQ on Trinity Street in Dublin.
The StoryToys story begins with the invention of the very first interactive pop-up book Rapunzel which was released on the App Store four years ago. It was an instant hit, and remains one of the company’s best-ranked titles, with more than a million downloads so far. It also gave rise to a long list of imitators; search for Rapunzel on the App Store now and you’ll find upwards of 50 versions.
That success allowed the company to secure successive rounds of venture finance, all of which have helped fuel a range of subsequent initiatives.
Barry O’Neill is CEO of the company. “Public domain intellectual property like the Grimm stories are great in that they are free brands. Everybody knows who Grimm is. The disadvantage of course is that they are in the public domain, so anybody can make a Rapunzel.”
The company decided therefore to begin creating its own IP, which it did with the Animal Band and Goodnight Mo series. In addition, StoryToys tapped a lucrative market developing apps under licence for other IP holders, including Poppy Cat, Chuggington and most recently, The Very Hungry Caterpillar. “That’s one of our major licences,” says O’Neill. “It’s the world’s second biggest selling children’s book.” (The biggest is Where the Wild Things Are).
Since its release, The Very Hungry Caterpillar app has hit the number one spot in a list of countries.
By presenting licensed IP alongside original IP, the company is giving its product range a discoverability that few firms in the sector could hope to emulate.
“When people download a third-party IP title like Chuggington, they get to know a little bit about StoryToys and the quality of the product.
“Afterwards, they will often go and download one of our other products which might be an original IP. We are trying to build the brand that way.”
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