The gaming world is flat

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The gaming world is flat

The gaming world is flat

But you can tilt it in your direction

Dean Takahashi, lead writer for GamesBeatI have covered technology news for 25 years and games for 20 yearsVentureBeat: founded 11 years ago. 12 million readers a monthGamesBeat: Started 9 years ago when I joinedGamesBeat events: GamesBeat Summit in spring 2017; GamesBeat 2017 in fall 2017Web site: GamesBeat channel and subchannels for AR/VR, esports, PC gaming, and other game stories. We do reviews, news, and interviews.I wrote two books, Opening the Xbox (2002) and The Xbox 360 Uncloaked (2006)

The places Ive beenI have been lucky to talk to game developers about the economic growth of games in Helsinki, London, Marseilles, Shanghai, Tel Aviv, Los Angeles, San Francisco, Seattle, Dallas, New York, Montreal, Amsterdam, Berlin, Hamburg, and Las Vegas.This is my first trip to Japan in 24 yearsAll of that has taught me that the world is flat when it comes to making games. I borrowed that idea from best-selling author Thomas Friedman of the New York Times.Competition is global. And its a non-zero-sum game

My favorite game: The Last of Us

You can make a game anywhere

Siberian brothers employ 100 in Yakutsk; 30 million downloadsMyTona made 15 games, and their last one was a big hitNorth America, Europe, and Japan dominated PC/consoleMobile games can be made anywhereGlobalization has helped games spread everywhereCosts are shifting and so our audiencesWorkforces are educated

But strong regions tilt the odds in your favorSan Francisco, Los Angeles, Seattle, Tokyo, Vancouver, and Montreal are strongRegions have their advantages in history, culture, and costsRelated industries can help a region thrive, like the proximity to HollywoodScience fiction, tech, and gamesIt works best if you have a gaming hub. Example: Japan has strong hubs for gaming, while India is only emerging.

History is the strongest way to succeedSilicon Valley started in 1940sAtari and Homebrew Computer Club started in 1970sNintendo and Sega rise in Japan in 1980sDemo Scene in Helsinki started in 1990sId Software started in 1990s in Dallas3D animation software started in 1980s in Montreal

What are the ingredients?Strong technology sectorEntertainment industryGood universitiesFavorable business climateCultural engagementLeadershipSpecializationGovernment supportLegal protectionFinancial supportInternational talent

Silicon Valley vs BostonRegional Advantage: Culture and Competition in Silicon Valley and Route 128Silicon Valley won, as it embraced the horizontal business model, while Boston stayed with the older vertical model. Horizontal firms like Intel and Microsoft won the PC market, while vertical companies like Digital Equipment lost.Annalee Saxenians Regional Advantage book captured this storyThe platform owners hold the powerBay Area platforms: Oculus, Facebook, Google, Apple, IntelThe Bay Area has stronger venture capital investment

The U.S.Strong regions: San Francisco, Seattle, Los Angeles, New York, Dallas, Austin, BostonTop states: California, Texas, Washington, New York, Massachusetts1641 companies, 546 in California406 universities with full game programsSilicon Valley150,000 jobsJobs growing at four times the rate of the overall U.S. economy 2009-2012$94,747 average salary (source: The ESA)

The top 10 public game companies in 20141. Tencent2. Sony3. Microsoft4. EA5. Activision Blizzard6. Apple7. Google8. King9. Nintendo10. Ubisoft

Nothing stays the sameThe game business and its leaders are always changingBut games are always growing, topping $100 billion and reaching billionsSupercell with 200 employees is valued at $10 billionUbisoft with 10,000 employees is valued at $3.7 billion

The top 10 public game companies in 2015

1. Tencent2. Sony3. Activision Blizzard4. Microsoft5. Apple6. EA7. NetEase8. Google9. Bandai Namco10 Mixi

JapanLong history with Sony, Nintendo, and SegaStrong third-party companiesArcade industrySucceeded without a real HollywoodStrong gaming cultureInfluential throughout the world

CanadaGovernment helpBetter measurement472 active studios, 143 new since 2013$3 billion annual revenue, up 31% since 201320,400 game jobs in Canada; 36,500 equivalent full-time jobsMajor companies with Canadian studios: EA, Capcom, Ubisoft, Activision Blizzard, Microsoft, Nintendo, Sony, Disney, Warner Bros., Square Enix, Sega, and Bandai NamcoHome grown: BioWare (EA), Ludia, Behaviour, Relic EntertainmentCosts are 25% of U.S.1/10th the size of U.S., but 1/3 as many studios

New platformsVirtual realityAugmented realityMobileTelevisionToys to lifeEsports

Success story: Behaviour InteractiveStarted in 1992 in Montreal1996 Multimedia Interactive and Behaviour merged1999 Founder Remi Racine buys back, renames it A2M2008 Acquires Chiles Wanako Games2010 Renamed Behaviour Interactive2015 Fallout Shelter2016 Dead by Daylight, Warhammer 40,000: Eternal CrusadeIt started as an amoeba, and it has evolved and hit the next level in the food chain

ChinaUrging worldwide expansionStrong shows like ChinaJoyStrong in PC and mobile. Not much consoleBig push into VRFinancial power and geographic arbitrageTencent has bought stakes in Supercell, Actvision Blizzard, Riot Games, and EpicProblems with censorship, trade restrictions

Israel, Finland, and othersIsrael specialized in online gambling, social casino, marketing tech, mobileFinland specialized in mobileCanada is broad-based across Montreal, Vancouver, Edmonton, Quebec City, and TorontoTechnology, entertainment, and games inspire each otherHow do you become fast?How do you create a gaming culture? Finland has to export

Acquisitions and failuresRegions can sufferLayoffs affect places such as Boston, AustinGeopolitics matter in Israel, UkraineSilicon Valley has become too expensiveImmigration policies should be friendlyPolitical climate should be stable and welcomingSome companies in Canada failed, like Roadhouse and United Front Games. But Kabams Vancouver is driving enterprise valueMino Games decided to leave SF and move to Montreal

What is coming next?Emerging territories of AR, VR, toys-to-life, Internet of Things, drones, robotics, esports, retro and moreVR is strong in the U.S. and ChinaSilicon Valley is strong in AIMontreal and Toronto are strong in AIThe intersection of sci-fi, tech, and gamesWestworld

Game developer map

The game industry map that matters?San Francisco: Pokemon Go, Game of War, The Sims, Star Wars, Plants vs ZombiesLos Angeles: The Last of Us, Uncharted, Crash Bandicoot, Call of Duty, Diablo, Hearthstone, World of Warcraft, StarCraft, Overwatch, God of War, League of LegendsDallas: Doom, Quake, Age of EmpiresMontreal: Assassins Creed, Fallout Shelter, Deus ExEdmonton: Mass Effect, Dragon AgeVancouver: Need for Speed, Gears of WarMaryland: Civilization, Fallout, SkyrimNew York: Grand Theft Auto, Red Dead RedemptionSeattle: Halo, Half LifeTokyo: Final Fantasy, Pokemon, Kingdom Hearts, Sonic, Ico, Gran Turismo

Game industry map continuedOsaka: Resident Evil, Street FighterKyoto: Mario, Zelda, Wii Sports, Mario Kart, NintendogsHelsinki: Angry Birds, Clash of Clans, Clash RoyaleStockholm: Candy Crush Saga, Minecraft, BattlefieldMoscow/Honolulu: TetrisFlorida: Fifa, MaddenEngland: Tomb RaiderBoston: Rock BandSouth Korea: CrossFire

Reducing your risks as a game companyWhy multiple territories make senseWider talent poolsCultural expertiseDiversity worksNo one has a monopoly on good ideas

Games find a wayConclusionsYou cant just think about building a company. You have to build a region. And that region has to produce blockbusters.You can build a video game economy, but it takes timeCost isnt the only advantageA gaming hub needs veterans, fresh talent, a culture of fun, low costs, a critical mass of companies, and government supportIf games have this, they will take over the world

You have to take games seriously