Cluster Fun

There are game developers in Ankara, Turkey? Cape Town, South Africa? Costa Rica?!

Videogames grace every continent; we know this. Different platforms, genres and tastes may dominate a given country or region, but games in general are pretty much everywhere. Yet, with the ubiquity of game playing, it’s odd that so many of us see game development in a different context. With high barriers to entry, most people assume commercial game development primarily takes place in geographic hubs like California or Japan, with only a few outliers to back them up. But it’s not really that way anymore. Just as games are everywhere, so too are game-makers.

The recent Global Game Jam played an important role in busting apart the prevailing notions of who makes games and where they make them. Organized by the International Game Developers Association’s (IGDA) Education Special Interest Group (EdSIG), over 1,600 participants spread across 54 locations in 23 countries (including Ankara, Cape Town and Costa Rica), took up the challenge of creating a game within 48 hours. The jam-ness of the endeavor was striking enough, with 360 unique playable games produced before the timer hit zero. But it was the global nature of the event that truly impressed. It proved that talented teams and individuals all over the world are creating games – and gave them a way for their work to reach a global audience.

Urban economist Richard Florida has been studying the effect of location on our lives, especially in relation to creative industries. His latest book, Who’s Your City?: How the Creative Economy Is Making Where to Live the Most Important Decision of Your Life, posits that choosing a home city is one of the most critical decisions a person can make. There’s obviously a lot of data and research that go into his theories and rankings, not least of which includes factors relevant to creative industries – idiosyncratic criteria like number of art galleries, used book shops and organic produce stands; or prevalence of a bohemian lifestyle, a certain political persuasion and so on.

Can the same be said for games? Or more specifically, for game development? Could a studio’s home base matter as much as its coding prowess? Did Rockstar’s Scottish headquarters affect the creation of the Grand Theft Auto series – a franchise that, by the way, most gamers assume was made in America? And why are so many MMOG developers based in Austin? Why so many sports games from Vancouver? Platformers from Japan? Casual games from New York? Narratively ponderous adventures from France? Technical showcases from the U.K.? Bleakly nihilist shooters from Ukraine?

Some degree of regional specialization may be a natural response to the cost-of-entry problem noted above. But there’s a contradicting truism: Today, games can be made anywhere. Some computers, a net connection and pizza are all that’s needed to transmute talent into game development greatness. Yet despite that freedom, we don’t see this on the scale you’d assume.

Or, more specifically, on the scale that regional governments hope for. While some governments still don’t get it, many are actively working to grow their local development sector. (Korea recently announced a US$200 million investment in the sector over the next four years.) A highly educated workforce producing mostly exported products with a relatively low ecological footprint is an economic development intervention no-brainer. Yet many of today’s largest hubs have had no such helping hand.

So what’s the recipe? Why do industry clusters form? What levers can we pull to nudge the ecosystem forward and catalyze healthy evolution?

Some obvious ingredients are things like access to talent, funding and feeder/helper industries (think movies or aerospace or tool vendors). Government aid programs like production tax credits or workforce training aids also help. And in recent years, success in cluster development efforts has often come from a partnership – sometimes formal, sometimes more organic – between industry, academia and government. Each provides inputs and outputs, each bears some of the costs and each shares in the rewards of growth and progress. In the best cases, this engenders a virtuous cycle that intrinsically motivates each party to play their role in the ecosystem.

One example is a group of studios working with a local university on a game programming degree. Some of those students will be hired by the studios, making for an increased employment and tax base for the government. The government provides R&D tax credits to stimulate cutting edge development and foster global competitiveness. The studios win publishing deals and hire more students, then train their workforce with the help of government subsidies. The university sets up an incubator with government and industry funding to focus on generating new IP. And … you get the idea.

In that totally random example, no single ingredient makes the difference. Each bit plays its part, and similarly good stuff could occur even if you shook it all up and re-rolled the dice. Industry advocates who press for a magic bullet, a single missing ingredient to solve everything, are neglecting the big picture. There are no simple solutions when it comes to growing and evolving an ecosystem.

We actually know very little about the economic interplay between organizations within these industry hotbeds. Conversely, if we look at the world of visual arts (paintings, galleries, etc.), the picture grows more clear. We know artists flock to megatropolises like New York and Paris, often living in specialized sub-communities with other artists. Low-rent loft space serves as a place to create and show work. In turn, this loft party circuit enables artists to “spy” on one another, assessing new techniques and ideas. Galleries typically spring up in close proximity to facilitate the discovery of new talent. And collectors appreciate the ability to shop around easily. These factors are the centripetal force that pulls a creative ecosystem together.

In short, clustering in the world of visual arts has both an economic and artistic imperative. At first glance, it’s hard to see the similarities with game development, especially given the global nature of game consumption. But if we cut the end-user out of the equation and focus on the internal industry side of things, we begin to gain insight into why clusters evolve.

For starters, there are real, hard transaction costs for developers and publishers to do business. If a developer can fly to Los Angeles and see a dozen publishers in one week, their deal prospecting costs are dramatically reduced. Even more so if the studio is based in L.A. and it’s a taxi ride instead of a flight. The same is true for publishers working with the holders of licensed intellectual property (movies, books, comics, etc) – it’s much easier to do your one-stop IP shopping in Hollywood.

Similar transaction costs come into play for talent, both from the employer and worker perspectives. As noted above, access to talent is a key factor for the establishment and growth of studios – no talent, no games. It is critical for studios to have easy access to a pool of talent – both internally (e.g., poached from other nearby studios) and externally (students or veterans from related sectors). Interviewing and importing talent from abroad is an extremely costly proposition.

Costs to the worker are critical as well. If a programmer can live in a city rich in development studios, he or she can move from job to job with relative ease should the need arise. The personal risks are far greater if he or she needs to move cross-country to a city where there is only one viable employer. Even labor laws come into play: Employment in a region such as California, known to have very worker-friendly labor laws, is preferable to a region famous for the brutality of its non-compete clauses. Just looking at recent layoffs, the ability of a region to re-absorb talent is critical – especially from the workers’ perspective.

Finally, a community of local professionals is important for its own sake, with major clusters often supporting vibrant informal networks for peers to exchange ideas – and gossip. Such communities provide an important aspect of personal and professional development. A city devoid of such opportunities becomes more risky and less appealing to workers.

These are just a few ingredients, and we’ve only begun to explore the complex interactions that create an ecosystem, or cluster, of this kind. It requires a nuanced and holistic approach to understanding the dynamics of such communities. It’s not as simple as getting government hand-outs.

Ultimately, success can come from anywhere, even Costa Rica. But you can be sure, there’s a higher probability of success in a cluster region. The good news is that if you don’t have one, you just might be able to grow your own!

Jason Della Rocca is the soon-to-be ex-Executive Director of the International Game Developers Association (opinions expressed do not necessarily represent the IGDA). Jason blogs from clusters around the world via RealityPanic.com.