If a recent spate of hiring is any indication, Vancouver's video and computer game industry seems to be well on its way to recovery from the 2008 recession.
"The overall market for video games is very positive," said Howard Donaldson, president of DigiBC.
But it's a very different landscape in 2012 than it was in 2008, when the industry went through a major contraction. The game publishing sector is morphing in response to a major shift in the way people play games. More people are playing more games – they're just doing it in new ways, on new devices, which is challenging the traditional console game sector to change with the times.
Thanks largely to Xbox Live, more console game players are playing online, and more are also now downloading their games, rather than buying optical discs from retailers, like EB Games. Moreover, many of those traditional console games – which can cost up to $70 – can now be played on an iPad, with apps costing in the $5 to $7 range.
That move to more online play promises to do to game retailers what Netflix did to Blockbuster and is fundamentally changing the business model for console game publishers, like Electronic Arts Canada (EA).
"We're definitely moving to online and mobile fast," Donaldson said. "We're going to digital distribution, so yeah, I would say EBs and those kinds of stores are at risk."
The growth in mobile and social gaming has brought new players to the scene in the form of women, who traditionally did not play console games but who now play games on Facebook and smartphones in growing numbers.
But it has brought new players to the scene in more ways than one. It is also bringing new players to the Vancouver game industry.
DeNA, a Japanese mobile game developer, has opened a new studio in Vancouver, and another big name player from Japan – GREE– is looking to development deals here, Donaldson said. And earlier this year, Seattle's Z2Live – another social-mobile game developer and publisher – bought Vancouver's Big Sandwich Games.
"We have a large talent pool," Donaldson said. "There's film, animation, and then you take the video game sector and the broader digital media sector. That attracts a lot of people up to this area."
Indeed, Canada is now considered the third biggest player in the world of game development, behind the U.S. and Japan. Vancouver's game sector constitutes a considerable chunk of the local high tech GDP.
With 1,200 employees, EA is the fifth largest of the top 100 high tech companies in Metro Vancouver. Other local game makers on the list include Radical Entertainment, Slant Six Games, United Front Games and Next Level Games Inc.
The growth of mobile and social gaming is challenging traditional console game makers, but that's not necessarily a bad thing, said EA spokesman Colin Macrae.
"Obviously it brings new people into the industry," he said. "The stereotypical gamer 10 years ago [was] a 22-year-old male in his basement, in an offline, non-connected space with his friends or by himself. Today, my wife plays Scrabble on her iPhone constantly. She qualifies as a gamer now."
You can get the Scrabble app for your iPhone for free, or $1.99 for a premium version. Both are made by EA.
EA's principal franchise – FIFA Soccer – is also now available in apps for the iPhone and iPad, selling for $4.99. The console version of the same game retails for $59.99.
Fortunately, for developers like EA, it appears that – for most gamers – tablet or smartphone play only augments and extends the playing experience – it can't replace console game play. If you are a FIFA Soccer fan, you'll likely buy the console game andthe iPad app, not just one or the other.
The new Wii U console, which is to be released later this year, is a good example of the console-mobile synergy that is evolving. It will feature a controller with a built-in screen, which will allow the player to continue playing on the controller, even after he has walked away from – or turned off – the TV.
"This is a really interesting time for video games because the Wii U is coming out, and there's some talk about Microsoft's new consol," said Douglas Tronsgard, CEO of Next Level Games.
"It's exciting for game developers because we can push the limits."
In the wake of 2008, game publishers cut their product slates in half, focusing their efforts on sequels and big blockbuster titles. Many local game developers resorted to layoffs.
"The market's better now, but it's definitely a big blockbuster market," Donaldson said. "Gaming is expected to grow at an average rate of 8% over the next five years. Even console is going to grow, but it's not going to grow as fast as mobile and online."
"It has become much more of a hit-driven business," Macrae confirmed. "In our case, the FIFAs, the Need for Speed, the Battlefields – the top intellectual properties – take up a larger portion of the market than they did in previous years.
"In terms of the number of titles that EA makes, we make dramatically fewer games than we did several years ago, because we're focused on big brands and leveraging those entertainment properties across multiple different platforms."
EA was among the local companies that resorted to layoffs after 2008. The company, which employs 1,200 people locally, is now hiring again, even as EA lays off staff in some of its other divisions. Some of the new positions it plans to fill are not in the traditional game development, but in the area of online support.
Gone are the days when a developer knocked off a new game and moved onto the next. Now, when a game ships, developers continue to work on refinements and new downloads, much of it related to online play.
"The days of ship it and forget it are gone," Macrae said. "It's not the end, it's the start. You're basically now selling a service. Because the landscape is changing in our industry, there are new skillsets we need to bring in as well." •
