The Finnish games industry has seen a tremendous growth over the past few years, and the latest industry report for 2014 indicates that the industry is still doing better than ever before, now employing a total of 2500 people.
The industry report for 2014 was released by Finnish non-profit games industry organization, Neogames, in late February 2015. In this article, some of the many facts from the 114 pages long PDF-file will be highlighted. So hold tight – it’s going to be a wild ride!
At the core of the industry is the total amount of employees and companies. By end-2014, the Finnish games industry employs a total of 2500 people across 260 companies.
The amount of employees alone has risen from 2200 in 2013, and 44 new companies were added to the list this year as well, making the total 260. While this is below the all-time high of 55 new companies registered in 2012, it is still an impressive growth.
The diversity within the industry seems to be improving as well. The report indicates that as of 2014, 20% of those employed in the industry are female, which is an increase from 16% in 2011.
The second round startup boom phenomenon relates to the many studios that have started within the past few years with founders who have strong prior experience from the industry, which gives them an advantage over the first timers.
This indicates that the industry is slowly but steadily maturing. Because while only 17 of the 260 games studios have existed for more than 10 years, around 25 second round startups have been launched within the past four years alone.
It is without question true that these second round startups have a better chance of succeeding in the industry. For a proof hereof, one only needs to look at the companies that have received VC funding between 2011 and 2014. In total, 17 studios received more than €0.5 million each in that period, but an astonishing 15 of those 17 companies are second round studios, indicating that VC funding is very hard to acquire as a first-time studio.
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In terms of turnover, the industry is growing very quickly as well, breaking through the €1 billion mark in 2014, up from €900 million in 2013.
While this is definitely impressive, what should be noted is that the spread of the turnover among the studios is no different from the games industry in any other region of the Nordic. In fact, in 2014, there were only 20 studios generating more than €1 million in turnover, with the median turnover being only €100 000. The low median can be explained by the ever-increasing amount of startup studios that have yet to develop a break-through game. So as always, a small number of studios generate the majority of the turnover.
The rapid growth in turnover has also influenced the turnover per employee. Until 2010, the total turnover and the number of employees in the industry were growing at the same pace. In the latest years, however, the turnover has seen a growth relatively stronger than the growth in the number of employees.
What this means is that while the turnover per employee was €97,300 in 2010, it has catapulted to an astonishing €409,000 in 2013.
Because of this growth, a potential threat for the industry is that in the coming years, the demand for workforce will exceed the game educations’ ability to educate new skilled developers, Neogames explain in their report. And for that reason, Neogames warn that it is also necessary to develop mechanisms to attract workforce from abroad.
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Growth also means competition, and while the Finnish industry is well-known for its developers’ willingness to share knowledge and experiences among each other, many of the studios are undoubtedly fighting for the same target audience of gamers.
In fact, the 2014 industry report shows that 85% of all games developed in Finland are for mobile. This is obvious considering the success of several large Finnish studios that develop for mobile, such as Supercell, who recently topped App Annie’s “TOP 52 mobile publishers of 2014” list, beating studios such as King and EA in terms of revenue.
Because of the increasing competition and costs associated with user acquisition on iOS and Android, many new studios are looking towards other distribution platforms such as Windows Mobile. 36% of the developers who answered Neogames’ survey indicated that they develop for Windows Mobile. This might seem weird considering the platform only holds a 3% market share as of Q3, 2014, but it comes to show that developers are trying to escape the crowded iOS and Android markets in the hope of acquiring players from less crowded spaces.
But it doesn’t stop with Windows Mobile. Neogames also indicate in their report that many developers are starting to completely break away from the mobile platforms in order to instead focus on PC.
“…some small developers have considered moving to less crowded platforms like PC. Many developers feel that mobile top grossing lists are dominated by few big companies and smaller ones don’t stand a chance with them in competition of visibility and users.”, the report says.