VIDEO GAMING INDUSTRY

Gaming: the next big thing in SEE economies?

©Simora

Game development can become the new big thing in the development of the SEE economies. For many years, the video gaming industry has been concentrated mainly in North America, Western Europe, and Japan. Publishers from the US, the UK, and France are dominating the market, but since 2018 all eyes are on the so-called “new Europe”.

Poland was the first CEE country to turn gaming into a national brand. According to data from the Polish Agency for Enterprise Development , in 2020 the Polish video gaming market was worth EUR 470 million. The country is home to successful studios such as CD Projekt, PlayWay, 11 bit studios, and Ten Square Games, with some 96% of their production being exported abroad. They secure nearly 10,000 jobs, including a growing number of female professionals.

The Polish phenomenon

According to Dr. Jennifer Johns, a lecturer at the University of Bristol and an expert in economic geography, Poland has been able to gain its leadership in the industry using initial links to overseas developers to significantly develop indigenous capacity. “The CEE region has been able to capitalise on its strong mathematics and engineering education and expertise to offer highly skilled workers for the games industry,” the expert said in an article published by Emerging Europe. In a strong move for the country, the Warsaw Stock Exchange (WSE), the largest in the region, launched a special index, the WIG Games Index, which follows over 50 listed gaming companies

Opportunities for employment and new businesses

Milos Djuricanin, Impact Strategist at Serbian mobile games developer Nordeus and member of the board of the Serbian Games Association, and Mario Celan, Director at Regional Development Agency SIMORA in Croatia, believe that the industry’s boom in the region is due to several global and some regional peculiarities. According to Milos, the lockdown, and the people’s natural need to have fun in a COVID-free environment have contributed to increasing interest in video gaming.

Milos Djuricanin, Impact Strategist at Serbian mobile games developer Nordeus; image: personal archive

“That has also happened in the local gaming industry, which has seen a rise of over 20% for the last year. The mobile games industry is the fastest growing segment of the video games industry and recorded a 25% growth in 2020. That is why we should not be surprised by the number of teams in Serbia making games on mobile, which in 2020 accounted for half of the local industry,” he said.

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Serbia: going from three to 100 (gaming studios) in 10 years

According to data from the Serbian Games Association (SGA), from three some 10 years ago, the number of companies operating in the gaming industry has now jumped to over 100.

“This is just the start for us, and we as a company are looking to help build the local ecosystem as much as possible. Serbia is in a growth period that is very exciting, and being part of that makes us extremely proud, and inspired to see what the future holds,” Milos told Trending Topics SEE.

According to data from SGA’s annual 2020 report, Serbian game development teams have published 41 games and the industry now employs more than 2,100 people. “Not only did the industry in Serbia achieve the record revenue of 120 million euros, but other important factors such as the number of development teams, their funding, and participation of women have all increased during 2020. Video games made in Serbia have now been downloaded and purchased more than 350 million times,” Milos added.

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PISMO – the Silicon Valley of the Balkans

Croatia is also one of the “young” players in the industry but already has some impressive record behind its back. Nanobit, Lion Game Lion, Croteam, LGM, Gamepires, and Exordium are just some of the national champions in the battle for the global gaming market. In 2019, local players generated HRK 400m (EUR 53.3m)  in revenues, while in 2020 this amount jumped nearly fourfold, reaching HRK 1.5b (EUR 200m). This year, it is expected to grow by 27.5%.

Croatia already has a business incubator for the gaming industry established using EU funding. In its presentation in an EC publication, it is dubbed what may be the new Silicon Valley of the Balkans.

In the past, Croatia’s Sisak-Moslavina County was known as a metal industry center. The local economic development agency decided to unite its forces with the national government to attract new entrepreneurs and keep them with a “positive environment in which entrepreneurs can develop through an incubator that will be different, special, recognizable,” Mario told Trending Topics SEE.  “We opted for an incubator for the video game industry because it is the industry of the future. It was important to give us a space where new entrepreneurs and their start-ups can operate, but also provide them with all the necessary equipment,” he added.

The project “Creating a stimulating entrepreneurial environment in Sisak-Moslavina County” won EU funding. “In Novska city, two buildings have been renovated and fully equipped for the purpose of making video games. This is how PISMO, the business incubator of the gaming industry, was created, and our county became the center of the same industry,” Mario said. Future plans include setting up a campus to encourage young professionals to work and do business in a promising industry at home.

Training in gaming development for all

The Gaming Industry Campus is a strategic project for Croatia and is a continuation of the High School Video Game Development Technician curriculum. Developing video games offers excellent career opportunities for young people without any special skills after high school.

“In our country, a person without knowledge, but with a desire to work in the gaming sector can, after completing his high school education, come and attend trainings lasting six months from two programs – Unity and Blender. If she or he is unemployed, for those six months they will receive compensation in the amount of the minimum Croatian salary in addition to travel expenses and learn to make video games every day for eight hours in Novska. So far, four generations of students, more than 150 of them, have passed this education, and currently there are 40 students in the 5th cohort,” Mario said.

Mario Celan, Director at Regional Development Agency SIMORA in Croatia; image: personal archive

National brand

Both Milos and Mario see the gaming industry as an opportunity to create a national brand and keep talents at home. Milos cited The Global Startup Ecosystem  Genome report 2020, according to which the gaming industry has the highest growth and development potential in Serbia, along with blockchain. Therefore, he and his colleagues have focused on developing the ecosystem.

There are several challenges facing the professional community in the industry – education, support from business angels, and investment in educational infrastructure.

“Our practical and technical education for programmers in Serbia is great, and is the primary reason why the game making scene managed to take off so quickly. To kickstart the local gaming industry from nothing, you need talented programmers. We have started to see more foreign investment into the country with recent acquisitions and consolidations of huge global gaming companies coming to Serbia, and we predict this will only increase and strengthen our position globally. This is a sign of the potential and success of our local market, and it is really starting to put Serbia on the global map of gaming,” he explained.

Mario, in turn, hopes that gaming will change not only the image of Sisak-Moslavina County, but also the image and reputation of Croatia as a whole.

“Our competitors are in fact all business incubators that entrepreneurs can move into. Although, only our incubator of about a hundred of them in Croatia turned the environment in which it was created into the center of something new. From each of our generations of participants in trainings where they learn to make video games, a certain number decide to start a startup,” he said.

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