New York is losing out to rival cities like Seattle, San Francisco, Los Angeles, Austin, Boston, Montreal and Vancouver in attracting companies that develop video games, a burgeoning industry that could easily play a larger role in the local economy, according to a new report [pdf] by a research organization that studies city issues.
The soaring popularity of home gaming systems like Nintendo’s Wii, Sony’s PlayStation and Microsoft’s Xbox has made the industry “an economic powerhouse” — one that New York would be well positioned to be part of, according to the report, by the Center for an Urban Future. But despite the concentration of creative talent and energy in the city — something vitally important to the film, media and publishing industries — the city has only “a modest-sized cluster” of video companies: about 30 game-development companies and another 55 involved in some aspect of video games, according to the report.
Software sales in the computer and video game industry reached $7.4 billion in 2006, nearly triple the same figure 10 years earlier, and the number of units sold exceeded 250 million, up from 74 million in 1996.
Altogether, the report estimates that the video game industry employs 1,200 people in New York City, a small fraction of the roughly 40,000 involved in game development and production in the United States.
Two large video game companies, Take-Two Interactive Software — which owns Rockstar Games, the maker of “Grand Theft Auto IV,” which is set in a city based on New York — and Atari, have their headquarters in New York City, “but most of their jobs here are in marketing, sales and other business fields rather than game development,” according to the report.
Larger media companies — like Viacom, MTV, VH1 and Nickelodeon — are also based in the city and expanding their involvement in video games, the report found.
The report quoted Jason Della Rocca, executive director of the International Game Developers Association, as saying, “New York is an interesting case because you would think it would be an ideal place for game development and creative workers. Surprisingly, there are fewer game studios as compared to the San Francisco Bay Area Seattle, Austin or even nearby Boston. While the game development community in New York is growing, it is still relatively small.”
The report offers a nuanced diagnosis of the problem. The city lacks both a major video-game development studio and “a critical mass of small and medium-sized game development firms.” While the city has many creative workers, it has relatively fewer programmers and engineers. The city’s universities “aren’t creating the pipeline of technical talent that video game companies need,” and the city’s Economic Development Corporation has not paid much attention to the industry. (The corporation did conduct an internal study of the video game industry in 2007 but concluded “that its small size didn’t merit investment,” according to the report.)
There is some good news. New York is home to a number of firms that make so-called casual games, one of the industry’s fastest growing segments. One of the best known is Gamelab, which is based in Chelsea and developer Diner Dash, a popular game about an executive who quits her job to run a diner. Among makers of lucrative console games, the report noted that one, Kaos Studios, a subsidiary of THQ, is also based in Chelsea and has grown to about 100 employees, from 15 to 2006.
The report ends by calling on the Bloomberg administration to do more to support the video game industry and on the city’s universities to expand their video game programs and build closer ties to the industry. It also calls for the creation of an online recruiting vehicle for the game industry.
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The importance of the gaming industry cannot be undervalued. Once seen as a niche market for the technologically capable, the gaming industry has grown. The initial audience, teenagers twenty years ago, has matured along with the game industry, while the following generations have clung on to the market as well.
— David M.In this time of transition for many media outlets (print magazines, newspaper, film and television production), the only changes in the video game industry have been expansion. This is because the internet has only served as a tool for video game companies, not a hinderer. If New York embraces video game developers, it will be one more industry that is staying strong within the city.
The mention of “casual games” is also important. These games, such as the aforementioned “Diner Dash” can lure in adults with free times on there hands. Even adults who work in offices can take part in these games. This industry is reaching out and hooking more people each day, it would be foolish for New York not to attempt to lure Video Game Developers.
Consider the launch of Grand Theft Auto 4, for the Xbox 360 and PlayStation 3 systems. In one week, the game made over 500,000,000 dollars. That makes it the biggest opening week for any form of entertainment. Ever. Bigger even, than the Pirates of the Caribbean, or Star Wars releases. This is one industry that shows no signs of dying.
Embracing the newest trends has always been New York’s trademark. Let’s not overlook this industry due to ignorance. I hope more and more developers come to New York and realize that it is a perfect place to find inspiration for games.
How about tax incentives for young upstart game companies? It’s all well and good for already established game developers to move offices to NY, but in today’s game market there is much more room for independent developers and NY should be encouraging them to set up in here. Canada has implemented tax breaks for game companies, and it’s resulted in a flood of developers flocking there. It’s gotten to the point where the UK is whining because so many game companies have gone there. Let’s get Silicon Aley whining that all the good games are being made in NY.
Games can be created now more easliy than ever. The cost is lower, the amount of staff needed is lower (some great recent games have been developed by only one or two people). The industry has finally opened up to the idea of smaller companies publishing games.
Every gaming console now allows developers to submit games to be sold through a download service (Wiiware on Nintendo, Playstation Store on the PS2, and XBox Live Arcade for Xbox). The cost of creating games is very low now, proprietary development kits which used to cost a ton have now been priced cheaper to encourage new developers with smaller teams, and with download services like the ones mentioned above and, most notable, the iphone app store, there is no physical manufacturing costs. If someone wants to make a game, they don’t have to make discs or boxes and there is no need to ship them and secure deals with retailers.
Also, more people are playing video games than before. The ‘nerd’ stigma is going away, thanks to the casual game market as well as things like Guitar Hero, which appeal to a wider audience. People like me, who came of age in the early 90’s, never stopped playing video games and the games themselves have grown up right alongside us. The whole ‘can games be art?’ question, I think, is finally moot with the release of games like Portal, Braid, and GTAIV. The art is in the gameplay, not the narrative, but it’s art regardless.
The gaming industry is now bigger than the movie industry, games are the one thing that have not been severely affected by recent economic downturns. All other forms of entertainment; movies, music, are tanking, but games keep going strong. California has a lock on the American movie industry, New York could be the Hollywood of games if they made incentives to developers.
The industry and the market are only getting bigger, but NY must realize that they need to attract not only established developers, but encourage small teams to make games in NY. The only way to do that is give them an incentive through tax breaks.
— cork