EXECUTIVE SUMMARY
This survey serves to highlight the digital games industry in southern Sweden and is published by Game City on an annual basis. By conducting a thorough survey of all active games companies and organizations in Skåne and Blekinge, the two southernmost provinces of Sweden, Game City aim to present raw data and analysis that can be used to track developments in the games industry in the region. The data in the survey is based on key figures from annual reports for FY 2014, as well as a survey that was answered by a number of companies in the region in the fall of 2015.
HIGHLIGHTS
- The survey has identified 55 organizations that are active within digital game development in southern Sweden. Data has been compiled from annual reports from 41 of the companies for FY 2014.
- FY 2014 these 39 companies had a combined turnover of SEK 919 million.
- The majority of the companies are profitable and report a combined profit of SEK 341.1 million for FY 2014.
- As of October 2015 there are an estimated total of 692 people involved in game development in the region.
- The industry continues to expand rapidly, with a 56.8% increase in turnover between 2013 and 2014, and with a CAGR (Compound Annual Growth Rate) of 36.9% 2011-2014.
KEY FIGURES
Unless stated otherwise, the data in presented below is based on key figures collected from publicly available annual reports of companies that are active within the field of game development in southern Sweden. The report covers annual reports from the period of April 2014 to March 2015.
COMPANIES
A total of 55 organizations have been identified. 43 of these are limited liability companies (aktiebolag) registered in southern Sweden, 11 are sole proprietorships (enskild firma) or similar and one has an office in the region but is registered elsewhere (King). 38 of the companies have been founded since 2010.
Key figures have been collected from annual reports from 35 of the limited liability companies. The rest are either sole proprietorships or too young to have data available for the period surveyed. In those cases the companies have been asked to provide figures themselves, and four sole proprietorships have chosen to share their figures. In the case of King who is operating in the region but is not registered here, approximations for the turnover and profit of the Malmö office have been made based on the average turnover and profit per employee of King as a whole. This approximation may differ from the actual turnover and profit of King’s Malmö operations.
All in all that means data for the relevant period has been collected from 41 of the active 55 organizations in the region.
The survey only includes companies that have been verified as being active and operating within the field of game development. There may be additional companies in the region that have not been included in the survey.
TURNOVER & PROFIT
The Swedish games industry continues its rapid growth and had a combined turnover of nearly SEK 9 billion in 2014, a 35% increase from the year before, according to the Swedish Games Industry Game Developer Index.
In southern Sweden, the industry has grown 56.8% in the past year, in large part thanks to the presence of King’s Malmö studio. The surveyed companies had a total turnover of SEK 919 million in FY 2014, compared to last year’s SEK 586.2 million. King’s Malmö studio alone represents more than half of this with an approximated turnover of SEK 535.4 million SEK in 2014, up from an approximated SEK 246.2 million in 2013*.
*The approximation was done by multiplying King’s turnover per employee for FY 2014 with the number of employees of King’s Malmö studio over the same period.
INDUSTRY TURNOVER 2011-2014
(in millions of SEK)
INDUSTRY PROFITS 2011-2014
(in millions of SEK)
LARGEST TURNOVER 2014
| Organization | Turnover |
|---|---|
| King (Malmö studio) | 535 456 |
| Ubisoft Massive | 224 759 |
| Mediocre | 32 052 |
| Illusion Labs | 27 738 |
| Tarsier Studios | 26 583 |
(in thousands of SEK)
In second place are Ubisoft Massive who have continued to grow rapidly and are up over 18% since since 2013. In third place we have two-man studio Mediocre who are up a whopping 137,33% since 2013, ending up at SEK 32 million. In fourth place, with a turnover of SEK 27.7 million, Illusion Labs have just managed to pass Tarsier Studios who end up in fifth place with SEK 26.5 million.
LARGEST GROWTH 2013-2014
| Organization | Growth |
|---|---|
| Station Interactive | 241,24% |
| Mediocre | 137,33% |
| King (Malmö studio) | 117,45% |
| Binary Peak | 46,77% |
| Illusion Labs | 27,19% |
The growth is based on the company’s net turnover. The companies need to have had a turnover of at least SEK 200 000 the previous year to be factored in.
Station Interactive tops the growth list this time as they come into their own after breaking off from Tarsier Studios in mid 2013. Mediocre makes an impressive leap, in large part thanks to their mobile game success Smash Hit. King has more than doubled their approximated turnover in Malmö since 2013, and both Binary Peak and Illusion Labs keep growing rapidly.
LOCATION
Of the total 55 identified organizations, 34 are based in Malmö, 11 in Karlshamn and six in Helsingborg. The remaining four are based in Lund, Kristianstad, Ronneby and Karlskrona respectively. For a list of all the companies, see the Game City Directory.
LOCATION BY CITY
Malmö combines excellent connections to Sweden and the rest of the world with talented people, diversity, established innovation support functions and the opportunity to expand your network. The culture in Malmö is described as open and inviting and people share a strong belief in the future of the city. Malmö has been ranked as the world’s 4th most innovative city by the OECD and is becoming an impressive startup hub.
Karlshamn continues to complement Malmö. Here can be found a beautiful, family-friendly town with cheaper accommodation and close proximity to nature and the countryside. In addition, Blekinge Institute of Technology (BTH) provides a game education in town, which means a steady stream of new talent. With the incubator GamePort and events like Game Concept Challenge, young developers get the opportunity to try their wings and start a business in a safe environment. This becomes particularly clear when looking at the number of startups in the town.
REGION MAP
CATEGORY
The vast majority of the companies in the region are developers, but there are also some service providers, technology providers, sub contractors, consultants, a publisher and an investment firm.
BUSINESS BY CATEGORY
WORKFORCE
EMPLOYEES
The official record from 2014, found in the companies’ annual reports, shows that a total of 519 people were employed by the 41 surveyed companies on average in FY 2014, an increase of 14.6% since 2013.
According to the data provided by 34 companies in the October 2015 survey, they employed 623 people in Skåne and Blekinge. Looking at previous data from the remaining companies the total adds up to an estimated 692 people currently involved in game development in the region. In the cases where companies have chosen not to share their current employee numbers, the data has been retrieved from their latest annual report and may therefore differ slightly from today’s numbers. The estimated total does not account for the companies from which there is no data available, so the actual total is likely higher.
The data found in annual reports does not necessarily include founders and owners who are working for a company, as well as others who are not employed in a legal sense. Also, there are a number of companies where current public data is not available. Thus, a direct comparison of the annual report data and the survey data would not be entirely accurate. However, it is safe to say that the data from the survey indicates a sharp increase in the amount of employees over FY 2014.
NUMBER OF EMPLOYEES 2010-2015
*Employees for 2015 is based on data from the survey and not on annual reports and should be seen as a prognosis.
TOP EMPLOYERS 2015
| Organization | Employees |
|---|---|
| Ubisoft Massive | 390 |
| King (Malmö studio) | 80 |
| Tarsier Studios | 38 |
| Star Vault | 16 |
| Illusion Labs | 12 |
EQUALITY AND DIVERSITY
It is apparent that the games industry is relying heavily on international talent. In a recent diversity and equality survey done by Game City, the top three employers, who together account for roughly three quarters of the total employees in the region, stated that 32% of their employees were internationals. As of October 2015, an impressive 39 nationalities were represented in the games industry in the region.
NATIONALITIES
 |  |  |  |  |  |
| Argentina | Australia | Austria | Belarus | Brazil | Bulgaria |
 |  |  |  |  |  |
| Canada | China | Croatia | Denmark | Finland | France |
 |  |  |  |  |  |
| Germany | Hungary | Iran | Ireland | Italy | Latvia |
 |  |  |  |  |  |
| Lithuania | Mexico | Netherlands | New Zealand | Pakistan | Philippines |
 |  |  |  |  |  |
| Poland | Portugal | Romania | Russia | Serbia | Slovakia |
 |  |  |  |  |  |
| South Africa | Sweden | Switzerland | Thailand | Turkey | Ukraine |
 |  |  | |||
| UK | USA | Uzbekistan |
The number of women in the Swedish games industry is increasing steadily. According to the Swedish Games Industry Game Developer Index 18% of the workforce were women in 2014, up from to 16% in 2013.
According to the annual report data from 2014, 14% of the workforce were women, which is below the national average. In the October 2015 survey the number of women amounted to 16,3%, a clear indication that is increasing here as well.
GENDER DISTRIBUTION
The games industry is in large part driven by young talent. 18% of the workforce in the region are 26 years old or younger, 22% were 26 years or younger when they began their employment and 25% are on their first full time employment ever.
FUTURE
GROWTH
The clear majority of the 34 companies in the October 2015 survey expect their turnover to increase in the coming year, and almost half are planning to hire additional staff in the same period.
When asked which competencies that are the most important for their continued growth, it was made clear that programming is the most sought after competence. In shared second place with an equal amount of votes were business development like networking and sales, and marketing/community management. In shared third place were art, design and production/management/leadership roles.
- Programming
- Business development & marketing
- Art, design & production
When asked about the greatest challenge for continued growth most companies said that the lack of available funding is the main thing holding the back, followed by business development and competence in second place and marketing in third place. Four companies replied that they were not interested in growing.
- Funding
- Business development & Competence
- Marketing & Community
EXPANSION PLANS
Do you expect your turnover to increase or decrease during the current financial year?
RECRUITMENT PLANS
Are you planning to hire more people in the coming 12 months?
FUNDING
With funding being the biggest challenge for continued growth for most of the companies, the October 2015 survey went on to ask some follow up questions.
When asked if they were open to taking in venture capital for shares in their company as a way of securing funding, half of the companies said no.
When asked to select which types of funding that they were interested in 14 of the 34 companies replied that they were not interested in any of the available funding options.
FUNDING INTEREST
Which types of funding are you interested in/looking for?
VENTURE CAPITAL
Are you open to taking in venture capital for shares in your company?
PUBLIC FUNDING
Have you ever applied for public funding from the Nordic Game Program, Creative Europe or similar?
CONCLUSION
It is clear that the games industry in Skåne and Blekinge continues to have an exciting and promising future ahead of it. While still a young and relatively small industry in the region, it is growing rapidly both on the financial side with increased revenue and profits, as well as on the human side with more people as well as increasing equality of diversity.
The near future will bring major releases from some of the established developers, like the long anticipated The Division from Ubisoft Massive and Hunger from Tarsier Studios, their first release based on their own IP. Two-man studios like Mediocre and Simogo continue to thrive, with multiple successful projects behind them and new markets opening up, for example with Simogo’s Year Walk just being published in Japan by Nintendo.
The potential for continued growth can be considered very good, with most companies having plans to expand their business in one way or another. The lack of available capital and investors who understand the industry is holding some of them back, but it is also worth noting that taking on external capital in order to grow, or even growing in itself, is not necessarily something all game developers are striving towards. In fact, several of the successful companies have no intention of growing, but rather to simply continue doing what they do best: make great games.
In a way this sums up an inherent contrast within the games industry, and for those on the outside looking in. The games industry is a financial wonder like few others, but at the same time its progress is often made possible by people who are not driven by the financial side of things. For many, the most important capital in the games industry seem to be the passion for games in itself, although the need for actual funding is still holding back potential success stories that might otherwise never see the light of day.
Even with funding there is still the matter of finding and attracting the right talent, which remains the second biggest challenge. What is becoming more apparent is the increased need for business development and marketing services. Perhaps these are areas where other industries can find interfaces with the game development world, providing services and competence they have in surplus, which in turn have been lacking in the games industry.
The games industry in southern Sweden is still in its early years, and when looking at headcount it’s still quite small. However, with the wide variety of companies, projects and markets represented in the region, together with the talent has attracted and will continue to attract, Southern Sweden has the potential of becoming one of most prominent regions for game development in Europe.
METHOD
This survey has been conducted in several steps. Firstly the list of companies active in game development in Skåne and Blekinge that was created for last years survey was complemented with new organizations, as well as organizations that were missed last time. This was done by compiling information from various sources, including the Swedish Games Industry Game Developer Index. and by searching the company database at allabolag.se for all companies listed as being involved with game development.
All companies were then verified to be active and operating within the games industry. Data on turnover, profit and number of employees was gathered by reading publicly available annual reports. In some cases data was found or complemented using allabolag.se.
A questionnaire containing questions regarding their current state of things, such as employees, youth, diversity, funding and challenges was also created. This questionnaire was then sent to all companies on the verified list. Of the 55 organizations identified, 34 completed the questionnaire.
Data was acquired and survey performed in September-November 2015, after which this report was created to encompass the results of the survey. The report in its entirety was created in house by Game City, with research being performed by an independent contractor.
There may be additional companies active within game development that have not been identified using this method, and thus were not included in the survey.
The reason the data from previous years differs from the data presented in last year’s survey is because the method has changed slightly. Firstly, the period covered has changed to encompass annual reports from April to March, where as it previously was gathered earlier and focused on reports from Jan-Dec. The reason for this change is because it is more representative of the fiscal years of the companies in the region. The history has been updated to represent this change, which means the history in last year’s report differs from this year’s. The history has also been updated to account for organizations that have been identified as of this year, but which have been active for longer than that.
Also, previous surveys has not accounted for King’s presence in the region, since their Malmö studio was not a separate company registered in the region. In order to get a more accurate representation of the scope of the games industry in the region, an approximation of their operations has been made. The same method will be applied to any similar operations in future surveys.