Typography

Many expect Finland’s burgeoning games industry to fill the colossal boots of Nokia.

The Finnish games industry is growing at a rapid rate. Game developers – spearheaded by the Angry Birds creator Rovio – revel in rave reviews and are raking in rocketing profits, while clinging firmly onto the top slots on the App Store and Google Play.

Yet, the task for local companies to compensate for Nokia’s recent nosedive is a daunting one. The plight of the mobile phone manufacturer has seen its market share plummet considerably, to the extent that Nokia CEO Stephen Elop is targeting a six per cent share of the smartphone market by year-end. Last year alone, Nokia laid off 3,700 staff members in Finland, while – in sharp contrast – the entire games industry employed approximately 1,500 workers.

With an overall turnover of 250 million euro, however, the fledgling industry remains relatively insignificant to the national economy. Growth over the past decade has nevertheless been impressive. As turnover soars at an annual rate of 50 per cent, the games industry has emerged as the largest contents and cultural export industry in Finland, claims Tekes, a national Funding Agency for Technology and Innovation. From the industry’s viewpoint, this is only an overture: its projections show a ten-fold increase in annual turnover, to 1.5 billion euro, as well as a notable increase in jobs, by the end of the decade.

According to Kari Korhonen, a senior technology advisor at Tekes, the objective will be met if the current growth rate is sustained. “We already have 150 companies, 40 per cent of which were founded between 2009 and 2012,” he observes. “It may even grow beyond that. Then, we are talking about an industry with significance in terms of the national economy.”

In fact, the success of local game studios has bolstered the confidence of Finns in the national economy. “Of course, these are the few positive signals amid a rather bleak and pessimistic economic outlook,” Korhonen recognises. “Wholly export-oriented and competence based, the games industry has grown. And this encourages other export-oriented sectors. Finnish companies can compete and succeed.”

This positive outlook on growth is shared by Tony Manninen, the CEO at the Oulu-based game studio, LudoCraft. “There is room for games in the world,” he confirms. “There are so many platforms and genres, not to mention the indie games scene, that every Finnish game firm can find its niche and be a part of the cutting edge.”

Top 10 Finnish start-up

1 Deal Dash
www.dealdash.com
2 Rovio
www.rovio.com
3 Web of Trust
www.mywot.com
4 Tuxera
www.tuxera.com
5 Sumopaint
www.sumopaint.com
6 Jolla
www.jolla.com
7 Vaadin
www.vaadin.com
8 Sports Tracker
www.sports-tracker.com
9 Thinklink
www.thinglink.com
10 Picosun
www.picosun.com

An industry that’s not only Angry

Roughly half-a-dozen game studios account for the majority of the Finnish games industry’s turnover, Korhonen reminds. Propelled by the worldwide popularity of its Angry Birds franchise, Rovio looks poised, yet again, to post vastly improved annual results. Elsewhere, the Helsinki-based game developer Supercell has taken the world of mobile gaming by storm. Its hit games, Clash of Clans and Hay Day, are currently the top-grossing iPad games in 77 and 32 countries, respectively. Supercell was also recently named the Finnish game developer of the year at the annual DigiExpo exhibition.

“The industry is a bit polarised at the moment,” Korhonen acknowledges. “But the growth of new firms is definitely an indication of further expansion.”

Interestingly, the industry’s growth in not restricted to recreational gaming. In fact, one emerging, corner of the market set to enjoy healthy growth in future is in serious games. The demand for gamified applications [the introduction of game-design features in other sectors] and tailor-made games in education and elderly care, for example, is expected to increase substantially. “Games and playing are vital to people and culture,” Manninen says. “Games can challenge and reward you, and promote interaction with others. In that light, we believe games will diversify and expand further.”

The popular educational iPad app, Wild Chords, designed by Helsinki-based music gaming company Ovelin provides a fitting example. “It’s a game that teaches you how to play the guitar – not one of those guitar controllers,” Manninen explains. “The division [between real-life and games] is blurring.”

Let alone Shadow Cities, a location-based MMORPG (massively multi-player online role-playing game) which transforms your neighbourhood into a backdrop for a perennial struggle between two clans of (techno)mages. The ground-breaking gaming experience, available on the App Store, has been touted as “the future of mobile gaming” by the New York Times and has established its Helsinki-based developer, Grey Area, as one of the world’s most conspicuous game studios.

Tekes at the core

Tekes remains one of the key drivers of the industry in Finland and launched its Skene – Games Refueled programme last year to encourage the development of budding game studios. The programme represents the agency’s third venture into the industry, which first began to show signs of its global potential in the late 1990s, Korhonen reveals.

Over the past decade, the recipients of Tekes’ subsidies include Remedy, the creator of the acclaimed Max Payne and Alan Wake franchises, and RedLynx, the studio behind the Xbox Live Arcade hit, Trials Evolution.

The early success stories revealed the industry’s unrefined potential, but one also should not understate the role of Nokia, its competence in programming and understanding of the mobile platform, Korhonen stresses.

LudoCraft has also contributed to Tekes’ programmes, as both partners and participants. According to Manninen, the benefits offered by Tekes’ programmes have recently improved substantially, as Tekes officials develop a genuine interest in, and understanding of, the games industry. “The subsidies are typically quite a small part of the total effort but foster the developer’s confidence.”

No lone wolves in Nordic skies

LudoCraft is one of today’s most promising Finnish game studios. In December, its lauded aerial multi-player battle, AirBuccaneers, became the first Finnish-crafted game to be hand-picked by fans for release on Steam, the world’s largest digital games distribution platform. “For an independent studio, getting your product on Steam can be tricky,” says Manninen. “It’s such an exclusive distribution channel.”

AirBuccaneers was voted by the Steam community in the Steam Greenlight System, where fledgling developers vie for the gamers’ approval. “That is pretty much the best feedback a developer can get.”

An outline of the extravagant game, which pits Finnish buccaneers against Swedish Vikings on lumbering blimps, was drafted already in 2003, when LudoCraft was still a research unit at the University of Oulu. The actual 18-month development process, however, did not begin until 2011. The game was eventually launched on 5 December, a roughly year after the first alpha versions were put out, the LudoCraft CEO recalls.

Although it was granted a Tekes subvention, the roughly one million euro endeavour was financed primarily with the sales of tailor-made applications. “It is our largest production to date. It is also the first multi-player game that genuinely requires team play. Of course, there is an abundance of co-op games, but most of them still condone the lone wolves.”

Despite an intriguing premise, the unique concept may present challenges for sales and marketing, Manninen recognises. “We enjoy creating new gaming concepts, because we believe gamers – as well as the gaming culture – are maturing and developing, and will demand gaming experiences that are a touch different. The commercial potential may also yet to come.”

Meanwhile, tens of thousands of gamers prey the Scandinavian skies, captivated and fascinated by the odd reference to Kalevala and Scandinavian mythology.

INFO

 

  • The Finnish games industry’s overall turnover is €250 million.
  • According to the National Funding Agency for Technology and Innovation Tekes, there are 150 local gaming companies, 40% of which were founded between 2009 and 2012.
  • Projections show a ten-fold increase in annual turnover, to €1.5 billion, as well as a notable increase in jobs, by the end of the decade.

 

Mobile prowess

Naturally, most game studios are eager to embark on the triumphant road paved by Finland’s leading games developers. After a year when the Angry Birds clung stubbornly onto the top slot on App Store’s top paid apps list and Rovio was consequently granted an Internationalisation Award of the President of Finland, many seem to believe that Finns have discovered the secret behind hit games.

“That’s a question they keep throwing at Ilkka Paananen [the CEO at Supercell],” Manninen chuckles. “Sometimes he says it’s the drinking water, sometimes it’s the four seasons.”

In particular, Finnish game studios have embraced – and thrived on – the mobile platform. Korhonen attributes the success essentially to two factors: “First, the production costs of mobile games are restricted. The other reason is, naturally, that there is an abundance of mobile know-how. Surely, that is reflected in the orientation of the firms.”

“You must be able to understand and foretell changes in the market and in gamer behaviour, to grasp the possibilities of new technologies, console generations and the relevant global trends,” Korhonen continues, identifying the agility needed in such a constantly evolving landscape. “The Finnish companies are first and foremost agile teams of experts.”

In a similar vein, the success of a particular game hinges on a number of factors, which range from timing and luck, to design and production. “Both Clash of Clans and Hay Day are savvy designs, also from a commercial viewpoint,” Manninen states. “Yet, they have obviously been produced on the games’ terms; the process was not governed by economic arguments. There is also a lot you can’t quite put your finger on.”

Despite the swarms of talented game developers in Finland, fierce domestic rivalries remain rare. Instead, game studios collaborate closely and encourage one another by sharing resources and experiences. “Rovio and Supercell attend the same events, challenge one another and share knowledge and experiences. Lately, also employees seem to transfer from one firm to another, ensuring that competences are passed on to others.”

A game for workers

A shortage of labour force – particularly of game enthusiasts with a commercial orientation – is cited as a potential deterrent to the growth of the industry in Finland. “Sales is the greatest bottleneck,” concedes Manninen. “If only we could train or recruit guys who understand sales, the market and productisation. We would hire half-a-dozen in an instant. We could do with a few Peter [Westerbacka] clones.”

In order to sustain the current growth rate, the Finnish games industry will require 150-200 new workers every year. Although study programmes have been launched across the country, game studios, particularly in the Helsinki region, struggle to find skilled labour force, and – as a result – recruit increasingly from abroad.

“Conversion training is another possibility,” reminds Korhonen, suggesting that the redundancies at Nokia may in fact alleviate the labour shortage. “At least in theory, the situation looks quite good. However, whether the skills correspond is another story. There are bags of potential.”

Korhonen therefore calls for more investments in conversion training and the education system, in general, in order to optimise the education machine. “Thereon, we can mull over new study programmes. The demand is not only for programmers and technology experts, but commercial professionals of the games industry.”

“If you were a top-notch programmer at Nokia and have some sort of interface with games, you can become a top-notch programmer in the games sector,” Manninen believes.

If all goes according to plan at LudoCraft, in a few years the game studio will employ “a few hundred” personnel, instead of the current 30. “That’s the dream, but days go by crawling in trenches, like in other game firms,” Manninen concludes.

Bridge over troubled times

Of course, not every former Nokia employee pursues a career in gaming – nor is the fate of the national economy solely dependent on the burgeoning industry. Some explore entirely new horizons. Earlier this year, Helsingin Sanomat reported of former Nokia Research Center employee Antti Rönkkö, who, after being laid off by the mobile phone maker in 2012, fulfilled his lifelong dream and founded Rönkkö Watches, an artisan shop devoted to crafting exclusive, hand-made watches.

Others venture not so far from their roots. A group of former Nokia employees involved in the development of MeeGo, the operating system of Nokia smartphones until the company hopped onto the Windows bandwagon in 2011, have established the boutique smartphone firm, Jolla. Its anticipated devices feature the unique MeeGo-based Sailfish platform and are expected to hit the shelves some time this year.

Jolla is also among the most-recognised sprouts of Nokia’s incubator programme, Bridge, unveiled in 2011, as the repercussions of the strategic shift on personnel began to dawn. Since its launch, Nokia Bridge has granted seed funding to over 300 start-ups, established by one to four former Nokia employees.

The incubator programme has begot, for example, Tellyo, a social platform to enhance your television experience; Sports Tracker, a health and fitness app that turns your smartphone into a GPS sports computer; and TreLab, a Tampere-based firm developing a next-generation wireless measurement solution.

In fact, Finland is swarming with promising start-ups that utilise the country’s programming capacity. The crowd-sourcing platform for news photos and videos, Scoopshot, strives to revolutionise the way media outlets and freelance photographers interact. Elsewhere, Tinkercad offers sophisticated 3D-modelling on your browser, while Sumopaint promises a more intuitive image processing experience.

While the high-tech sector may dominate the list of the most recognised Finnish start-ups, there is more beyond. BT Wood, for example, responds to the soaring demand for more ecological building solutions by developing and marketing innovative wood treatment chemicals. Magisso contrives award-winning functional home products that renounce the imperfections of more traditional designs. They may not bask in the media limelight as the most auspicious start-ups of the games industry do, but their emergence is nonetheless an indication of the same enterprise – a feature underlying all success stories, past or present.

Aleksi Teivainen