[Cross-posted from my own blog.]

As you may have read, the Scottish Affairs Committee visited Scotland yesterday to investigate the games industry. Despite some of the coverage bordering on the hysterical, I don’t believe the Scottish games industry is in crisis. I don’t believe there are any “panicked” companies about to up sticks and move wholesale to another country.

The Scottish games industry is in transition.

Companies have been trying to move away from the “traditional” model of the industry, where a publisher funds the development of a game. This is a Good Thing. Companies like Cobra and Digital Goldfish have had success on iPhone with their own and licensed titles, Tag and Dynamo have recently received commissions from Channel 4 for public service games.

As much as we’d like it to be otherwise, not everything tried has been successful. Denki took a different funding model for Quarrel, but the lack of a distribution route for a unique experience was an insurmountable obstacle. And Realtime Worlds took on a couple of projects of massive scope and scale, that haven’t panned out the way anyone would have liked (understatement).

Aside from that, this year Ruffian launched Crackdown 2, Proper released a Final Fight reboot for Capcom and the downloadable content for Crackdown 2, Cohort have a Move launch title, Firebrand have the best selling Wii racing game behind Mario Kart, and Digital Goldfish were just included in the Guardian’s Tech 100 list for the second year running. Dare to be Digital and ProtoPlay were once again huge successes. Amongst the universities, Abertay are managing a £5m prototyping fund, Glasgow Caledonian continue to do great research and host the Scottish Game Jam, and West of Scotland are also conducting useful research. Ready Up and Square Go are terrific online games magazines. There are a number of companies doing great work and having success in niche markets and/or “unglamorous” platforms - who knows what paths they will take in the future.

But let’s be clear - we’ve stumbled this year for one critical reason. We’re failing to make money.

Perhaps some of you reading that think I’m being crass in saying that. I’ve paraphrased Walt Disney on this before and I’m sure I’ll do it again in the future:

"We don’t make games to make money; we make money so we can make more games."

That’s all there is to it; but right now we are lacking it. It’s obviously the key to creating a sustainable games industry, which is part of what is needed to have a strong Scottish sector.

The Scottish games industry is in transition, and it’s not something that can be solved overnight.

The public sector, government and media are going to have to adjust their expectations, though, because the new measures of success are not going to be job creation and new company registrations. The new measures will be based on wealth creation, rights ownership and social contribution.

The public sector can certainly provide support, whether through project funding, skills development, improving the country’s infrastructure or perhaps even tax breaks. The mainstream press could try being cheerleaders for the industry, though they’ll need the industry to talk to them in order to do that.

But this transition was started by the industry itself, and I believe it will be completed by the industry itself. It won’t happen overnight, it won’t happen without a few more stumbles, and it sure as hell won’t be easy, but the ambition is there. The belief is there.

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Comment by Dr John Sutherland on October 3, 2010 at 10:02
I find the principal trouble with involving the Public Sector is that we end up facing in different directions. The PS intends to spend its money on social reconstruction and renewal projects, but often ends up misfocussed and spending it on itself and its friends. Walt was right, paraphrased: we - in the games industry - make games to make money to make games, but often end up misfocussed by our over-enthusiasm.

I do believe (see previous blog) this is a critical moment for Scottish games creation. To paraphrase the FM, nowhere is it written that Scotland will have a games industry: we have to make it ourselves.

I hope Dave and Colin bounce back from the RTW crash. Experience is a hard master, but we all need to hear their take for the benefit of the rest of us. I, for one, still hold them in awe for what they tried to do. Perhaps someone in the media could help us understand better by creating a TV programme or movie on the Scottish games industry?! Facebook meets Trainspotting ...
Comment by David Thomson on September 20, 2010 at 23:12
I agree, it definitely seems as though there's a mindset problem in all of this. That won't be solved overnight or by the public sector.

I'd be interested in discussing your approach for music, to see exactly what overlap there is with games.
Comment by Colin Jack on September 20, 2010 at 17:13
Games, music, film, TV all creating digital content, all suffering supplychain problems. There is a common theme here, and we should not wait for someone else to come up with a solution.
I have one approach that has a legitimate public sector element, and I have been touting it for a few years, but no-one is interested because it is based on a revolutionary approach rather than an evolutionary one.
We don't seem to want to stand out from the crowd, even if, in the case of music, the production costs and risks are low.
Comment by David Thomson on September 16, 2010 at 11:07
On Crackdown 2, the general consensus from reviewers was that there wasn't enough new stuff built on the original. I'm not familiar enough with either game to say if that's true or not, but for that core segment of the market, there's a clear correlation between review scores and sales figures. It is a completely different type of game to World of Warcraft though, so although back story may be part of it I don't think it's the full reason.

New distribution models can help, and creating our own products is definitely the way to go, but the real problem is that we suffer from a lack of commercial skills - particularly marketing and product management. Games isn't alone in that; the general tech sector in Scotland suffers there too, and they recognise it (and have recent launched a new strategy to address it).

You can expect me to be talking a lot more about this in the coming weeks and months :-)
Comment by Carole Dunlop on September 16, 2010 at 10:21
[LIKE]<= !
Comment by Nicola Sinclair on September 15, 2010 at 10:57
Really interesting post David and I agree about all the ridiculous hand-wringing from the media. What they manage to do with stories like that is make it sound as if the gaming industry in Scotland is specifically failing, and not that games companies across the world face similar challenges.

My boyfriend is majorly into gaming and said the other day that he thinks Crackdown failed because it didn't have a strong enough back story ('lore' he calls it) compared to other MMOs like Warcraft. It struck me that games like that have to be more and more like movies in terms of storylines etc, so they're faced with spending millions and waiting years on end to release their product into an enormously competitive market. At the other end of the scale is the faster turnaround apps but they don't return the big bucks. What a challenging industry to operate in.

Do you think that new distribution models like online downloads will help by reducing production overheads?

I totally agree that creating their own IP is the way to go. Channel 4 has certainly recognised that and is gearing its investments to support the industry that way, for example with its new deal with Tag Games.

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