Some Good Signs Loom for Game Industry in Early 2010, AIAS President Says

The new game Baynotta “has sold well for Sega,” and Darksiders “has done very well for THQ,” Olin said. “I think there’s some concern that there’s a shortage of hardware in the pipeline right now for Sony and Nintendo,” he told us, referring to the PS3 and Wii. January sales “might have been a little bit stronger had there been more product availability,” he said. (See the separate report in this issue.) “It seems that consumer demand is certainly there.” But the month’s sales were expected to be down from January 2008, which was especially strong, he said.

Game industry members are “sort of holding their breath and looking forward to what happens with BioShock 2” from Take-Two Interactive, released early this month, in terms of sales, Olin said. The first BioShock game was a big hit for that publisher. The industry is also going to gauge how Dante’s Inferno from Electronic Arts does, he said. That game also was released early this month. “I don’t think that anyone was expecting Dante’s Inferno necessarily to be a 20 million unit phenomenon, but at the same time people are looking at it and seeing how it moves,” Olin said.

The game industry still is being impacted by the overall economy, Olin said. He predicted 2010 game sales will be “flat to a little bit down” from 2009, but “we'll probably see increases in units” sold and the quality of creative content “will be better than last year.” It’s been widely reported that the game release slate for the first half of this year is especially strong. “There are some phenomenal games being released in the second half of the year” also, Olin said.

Olin predicted we'll see “more short, more value-priced forms of entertainment” on the connected consoles “because consumers want it.” Digital revenue will become an increasingly important part of game companies’ businesses, but we “still have a long way to go” because many consumers have not downloaded any games yet, he said. That creates “a great market opportunity for us,” he said. While not every game maker will set aside entire studios for digital product, like THQ recently did (CED Feb 4 p3), Olin predicted some will set aside development teams specifically focusing on such games.

After many job losses in 2009, some development studios are “in production” on games now and “are actively hiring,” Olin said. “There are probably 12 studios that have games that are in final contract negotiation or they're weighing their offers and opportunities, and I think as these signatures get put on paper that you'll see an uptick in hiring on the small-mid studio level, which is good.” The core game studios run by major publishers including Electronic Arts and Sony Computer Entertainment are less likely to be hiring many people this year, he said. “I think that people are looking to be as efficient as possible within game production, which is ultimately just good business.” But, he said, “Valuable people and valuable assets will get redeployed at other studios. That’s what happens at companies in other areas of the entertainment industry, too.” There continues to be many new jobs available in Montreal’s game industry because of tax credits and the government there, in general, has “made it very easy for” immigrants to get visas to work there, he said. California laws, on the other hand, have made it difficult for some game companies to do business despite the huge game industry that exists there and large pool of available talent, he said. “Chicago seems to be growing” its game industry and “there seems to be some vibrancy on the East Coast between Boston and New York, but not at the level where all of a sudden there’s a net 10,000 new game jobs being created,” he said.

Social game developer Zynga Game Network “seems to be hiring across the board,” Olin said, noting that company recently opened an office in southern California. Zynga has “over 200 job openings right now,” a spokeswoman said Friday. The company started 2009 with “just under 200 employees and today we have over 600, full time,” she said. “By June, we anticipate perhaps around 800-900 full-time employees at Zynga.” The new Zynga Los Angeles office in Marina del Rey “will be very much like our Zynga East office in Baltimore, where it will be a studio for our new games,” she said. The company is “looking to expand and scale our talent as we grow,” she said. The San Francisco-based company selected L.A. for the new office “because of the talent in both interactive entertainment” and the Internet there, “which is essential for social games,” the spokeswoman said. Zynga, best-known for Facebook games including FarmVille and Mafia Wars, claims to have 60 million daily active users and hit 100 million unique visitors per month in November. Digital Sky Technologies made a major investment in Zynga late last year, buying about $180 million worth of Zynga securities -- some of which was to “be used to fuel Zynga’s growth,” Zynga said.

Zynga Chief Game Designer Brian Reynolds is slated to speak at D.I.C.E. Thursday. Other speakers this week will include keynotes by Disney Interactive Media Group President Stephen Wadsworth on Wednesday and Activision Blizzard CEO Robert Kotick on Thursday.

D.I.C.E. attendance will be about the same as last year, capped at about 700 people, Olin said. “We've sold out effectively.” The goal is to again keep attendance relatively low to maintain D.I.C.E.’s intimate feel, he said. About 1,000 people are again expected to attend the Interactive Achievement Awards at D.I.C.E., to be on Thursday, he said.