The Nordic gaming industry

Kent Thorén & Annu Kotiranta et al. wrote about the Nordic video games industry relating the changes that occurred and how the industry started to follow the global trend of producing video games. They claim that” with the division of hardware and software, the provision of rewritable software and the dissemination and democratization of personal computers in the late 1980s and early 1990s, new ventures to produce video games in the Nordic region has originated. Some of these companies have managed to survive in the long term, in contrast to all of the previous companies, which have only succeeded in producing a small number of games at best”.

They also have underlined the fact that a change was actually occurring following the early global development of technology “In the early 1990s the Nordic studios mostly created games for home computers. This gradually changed, possibly because the release of globally successful games, and increasing publisher attention, made a wider range of platforms reachable”. Sweden and Denmark were initially the leading Nordic

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countries in terms of game production, followed by the Norwegian industry who is still very small compared to the mentioned leaders, however it has managed to produce some internationally popular acclaimed games. In the early 2000s, Finnish companies had some notable success with personal computers and console games. A presentation prepared in 2016 by Samuli Syvähuoko from (SisuGame Ventures) and KooPee Hiltunen from (Neogames) gives a comparative overview of the sector in the Nordic countries in terms of business revenues, employment (See figure 19).

Figure 19. Games Industry in the Nordic regions (Source: Neogames and SisuGame Ventures, 2014)

In this chart it is important to note that the position of Finland as a leader in the industry is made clear with a revenue twice higher (2.6 billion Euros) than the second in list namely Sweden (1.2 billion Euros) even though Sweden employ one thousand more workers (See figure 20).

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Figure 20. Games industry in the Nordic regions (Source: Neogames and SisuGame Ventures, 2014)

Consequently, it is interesting to note that the video gaming industry index per capita confirms the trend and shows Finland dominating the market largely in front of other neighbouring Nordic countries with a 0,47-index compared to 0.12 and 0.21 per capita index for respectively Sweden and Iceland. (See figure 21).

Figure 21. Games industry per capita index (Source: Neogames and SisuGame Ventures, 2014)

In conclusion, it is important to note that according to the three above figures, Finland ranks first in almost all categories (revenues, employees, companies) grounding its position as a powerhouse and leader for the video game industry in the Nordics followed by Sweden and Denmark.

49 4.1.5 The video game industry in Finland

The great majority of game development companies in Finland are situated in the south region more particularly in the capital Helsinki and in the Espoo region, some Finnish compagnies were established in the late nineties however many of them were founded after the year 2000. It can be observed that the Finnish game industry began to really take off and get international attention with Rovio's Angry Birds game, launched in the year 2009. However, the origin of mobile games in Finland is linked to the mobile company Nokia, which in 1997 integrated a simple “Snake” mobile game inspired by the 1976 arcade game “Blockade” into its phones that ended out being a staple of mobile games and ranked in the top 100 games of all time according to the famous Next generation magazine. Financial revenues have subsequently increased, notably due to the performance of the Supercell and Rovio mobile games. Alongside these giants, who are among the world leaders in the games sector, there is a multitude of other smaller companies that are entering the business. Despite the rapid growth of the sector, the video games industry remains a modest component of the Finnish national economy. The recent 2020 Neogame report, divides the history of the industry into the following periods that contributed to the rise of the Finnish video game industry as it is known today:

1979-1986: The beginning - From Finland to the international market.

1987-1995: Professionalism - From individual developers to game development.

1996-2000: First wave - The first success stories and mobile game studios.

2001-2004: The difficult years -Flying high after hitting rock bottom.

2005-2009: Moderate growth -The era of a mature market.

2010-2011: A system in turmoil -Balance of power revolutionised by mobile distribution.

2012-2016: The perfect storm- Free to play model.

2017-2019: The era of establishment.

2019-2020: Worldwide Covid-19 health crisis.

The timeline chart below (Figure 22) summaries the chronology of the gaming industry in Finland starting from its early stages in 1980 until the most recent years.

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Figure 22. Gaming history timeline (Source: Neogames Report, 2020)

In terms of chronological timeline, according to the Neogame report, the years 2017 and 2018 were years of stabilisation for the sector compared to the previous period between 2004 and 2016. This trend and stabilised situation have persisted in the year 2019 and 2020. In addition, regarding the game studios and developers according to the statistics, forty-eight new studios were created between 2017 and 2018 in Finland.

First of in 2017, the introduction of four game companies on the stock exchange represented a major event for the Finnish video game sector. More recently, the study shows that the Finnish gaming industry employs currently (three thousand six hundred) and more people (three thousand two hundred) in 2018 compared to (two thousand seven hundred fifty) in 2017 and (two thousand seven hundred fifty) in 2016. In addition, game studios hired more than five hundred new employees in 2019-2020. In 2018, the percentage of non-finish employees increased to 28% compared to 17% in 2016.

Another significant result is that in 2018, the number of new games published was around one hundred, instead of the two hundred games average per year the previous year. Only five of the thirty largest game studios in terms of revenue have launched a new game recently. Neogames study estimates that from 1995 to 2018, there were nearly six hundred video game studios, of which two hundred twenty were active in game development at the end of 2018 and only two hundred at the end of 2020. In 2014, also known as the peak year, there were two hundred sixty active studios across Finland. Since then, the number of active studios has decreased, mainly because competition and the chances of survival of a small studio are lower than before. The following graph, (Figure 23) shows the number of active studios between the year 2004 and 2020.

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Figure 23. Number of active studios 2004-2020 (Source: Neogames Report, 2020) Relating to geographical location of business activities, as it can be seen, (see Figure 24) the capital region slightly increased its share from 46% to 55% and the central region decreased from 21% at the end of 2018 to 20% at the end of 2020. It can also, be observed that the main centres of the gaming industry outside the capital region are Tampere, Oulu, Kajaani and Turku. In terms of economic and financial importance, the capital region remains well ahead of the other regions with 97% of the industry's turnover generated and 75% of employment.

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Figure 24. Locations of the compagnies across Finland (Source: Neogames Report, 2020)

Concerning the Finnish labour market, the proportion of women employed in these companies is just over 20% upward compared to 18% in 2016. In addition, the number of non-Finnish employees has increased from 18 to 27% of the total number of employees and in 2020, this number increased to 28%. The median number of people employed in the one hundred thirty-four companies surveyed in 2020 by Neogames was eight, and the average was twenty-five. Moreover, the number of people working in the Finnish gaming industry is, in general, quite small in relation to the sector's turnover this is due to the fact, that most studios develop mobile games, which are less resource-intensive than other platforms.

At the end of the year 2016, Neogames survey estimated that there were two thousand seven hundred fifty people working in the sector compared to two thousand five hundred at the end of 2014. By the end of 2018, this number jumped to three thousand two hundred employees and by the end of the year 2020, this number slightly increased to three thousand six hundred employees (See figure 25).

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Figure 25. Number of employed Finnish Game Industry 2004-2020 (Source:

Neogames Report, 2020)

In terms of financial results, the Finnish video game industry has performed well over the past decade (see Figure 26). The development of the results started in 2012 and continued until 2016. After that, a small decline can be noticed between 2017 and 2018. Despite this, the gaming industry is still generating more than 2 billion Euros per year.

In 2020, the gaming industry has managed to generate over 2,4 Billion Euros. By the end of 2020, there were forty-six studios with an annual turnover of more than 1 million Euros and the median turnover of a studio participating in this new survey was 360,000 Euros in 2020 compared to 135.000 Euros in the year 2018.

Figure 26. Turnover of the Finnish Game Industry 2004-2020 (Source: Neogames Report, 2020)

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In relation, to the network and available supports to the video gaming industry (see table 4) that constitutes the best elements of the ecosystem in Finland, it is composed and represented by the following major institutions:

Table 4. Finland environmental organization system, (Newzoo, 2020)

Lastly, companies can apply for Business Finland funding to test business concept (see Figure 27), enable development, and provide a promotional and networking role.

Business Finland has therefore contributed to the financing of the Finnish gaming industry to an amount of more than one hundred thirty million Euros. Regarding funding

Non-profit