Games as a Business (2021) by TechSavvy.Media

Games as a Business

04-07 The Danish Powered by TechSavvy Gaming Industry

10-13 Art or Cash?

20-22 The Gaming Business in an Overlooked Moneymaker

32-35 The Gaming Industry is 1 Experiencing a Gold Rush

About: Games as a Business Dig for gold on a far-away planet as a beer-drinking dwarf with your friends. Surf the subway or jetpack above it. Puzzle your way through an industrial, dystopian fantasy. Or kill as a sneaky, bald hitman. Games are home to endless worlds with endless hours of entertainment. At the same time, it’s big business. In this first edition of “Games as a Business”, we invite you to take a dive into the Danish gaming industry. Here, you will meet industry veterans and -experts discussing the opportunities and challenges right now. The entrepreneur, businessmen and investors trying to boost the growth. And of course the wealth of amazingly awesome Danish studios we all love. Enjoy!

Partners We would like to thank the following partners, sponsors and advertisers for making “Games as a Business 2021” possible:

“Games as a Business” is produced by TechSavvy Media. Editor in Chief: Sebastian Kjær Journalists: Sebastian Kjær and Anna Bernsen Jakobsen Frontpage illustration: Mads Ellegård Skovbakke Layout: Vratislav Pecka Published by TechSavvy Media. Contact: sales@techsavvy.media

Games as a Business 2021

Table of content 04-07

The Danish Chamber of Commerce: The Gaming Industry is Experiencing a Growth Spurt That Needs Supporting

From Ecosystem to Ecosystem: SYBO Wants To See the Danish Gaming-Scene Grow

10-13

Are Games Art or Cold Cash? There are few parallels between the animated and highly-artistic computer game Vokabulantis and the hyper-commercial mobile games developed by Umami Games. But both game companies think that business and artistic ambitions can be united through video games.

14-16

Game Studios Need Hits. But High Quality Does Not Necessarily Guarantee a Spot on the Hit Lists

17 18-19 20-22

Aarhus-native Gaming Startup Wants to Solve Gaming’s Social Problem

Thanks to Astralis, Parents Now Approve of Esport

The Gaming Business Is an Overlooked Moneymaker: The Politicians Have Been Dragging Their Feet Another wave of successful gaming companies has been coming out of Denmark in recent years. Yet from a political point of view, there is still no vision or strategy for the industry and, according to experts, that is a problem. “All Those Companies Making Really Great Games Are All in Copenhagen?”

24-25

In Norddjurs, the Gaming Industry Is a Position of Strength for the Entire Municipality

26-27

Games Is Not Just For Games: New Subgenres Are Emerging

28-29

Danish Private Investment Funds Eye Potential Investments in the Gaming Industry

30-31

Nordisk Games: Investing in Games is a Long-Term Business

32-35

The Gaming Industry is Experiencing a Gold Rush. But Danish Investors Are Not Digging The gaming industry is growing rapidly and its global potential makes for unique opportunities to cash in on. Despite this, Danish investors still refrain from investing in the industry.

6 Successes from The Danish Games Industry

CineClash: Cinemas will be home to a new gaming format

38-39

The Danish Gaming Industry Is Riding a New Wave of Success. Will It Lead to an International Position of Strength This Time Around? The gaming industry is growing in Denmark and there are more reasons than ever to be optimistic. The potential is there, but will the industry ever become more than simply a good entrepreneurial story? Can it gain an international position of strength?

History time: A 19-year-old entrepreneur created Denmark’s first major bet on commercial computer games

The Danish Gaming Industry Is Riding a New Wave of Success Will It Lead to an International Position of Strength This Time Around? The gaming industry is growing in Denmark and there are more reasons than ever to be optimistic. The potential is there, but will the industry ever become more than simply a good entrepreneurial story? Can it gain an international position of strength?

Written by Sebastian Kjær

team of brooding, fearless, and beer-drinking dwarves with bushy beards are working for the cynical mining corporation Deep Rock Galactic. A job that consists of visiting planets to find gold and exotic resources like alien eggs, bismor, and magnite. Of course, to emerge from the mines alive, they have to shoot down throngs of aliens with advanced weapons. Mining in space is big business. And the Deep Rock Galactic, where it all takes place, has also become big business for the studio behind it, Ghost Ship Games. “Playing as a hardcore dwarf, who will never give up, has a certain appeal to it. So we ended up writing a short pitch, which sounded something like this: ‘wouldn’t it be cool to play as four dwarves who mine for gold in space?’,” explains Søren Lundgaard, CEO and co-founder of Ghost Ship Games. Just four years ago, Lundgaard and five

other veterans from the Danish gaming industry got together and to develop Deep Rock Galactic. Today, the game comes in at number 50 on the list of the best-reviewed games on Steam amongst 50.000 titles. It is nominated for the prestigious Bafta Award in the Multiplayer category and so far has sold more than two million copies. In other words, the six veterans have shown how far a truly great game can come, even though the developers are from a small studio. “This is why developing games today is so amazing. When we entered the industry, we had to develop the game engine as well. This equates to filmmakers having to build their own cameras and lights. However, today we can download Unity or Unreal, there are a ton of tools to build with, and the game can easily be distributed to players all over the world,” Lundgaard says.

Søren Lundgaard CEO and co-founder, Ghost Ship Games

Jesper Krogh Kristiansen Games Consultant, Vision Denmark

Games as a Business 2021

Deep Rock Galactic has been described as a mix of Minecraft and Left 4 Dead. You play a gold-digging space dwarf with big guns, and in collaboration with up to three players, you explore mines on distant planets. As in Minecraft the landscape - the mines - is manipulated by the dwarves’ pickaxes, weapons, and power tools. And like Left 4 Dead the next swarm of enemies is never far off.

The Danish gaming industry is booming Ghost Shop Games is a new beacon of hope in a new generation of Danish game developers. And they are not the only new success story. Recently, the Danish Producers’ Association published a report taking stock of the entertainment industry in 2019. The report is clear:

“2019 has been the best year for the gaming industry ever and we have indications that 2020 has been even better. It is an industry in progress, and the leap is even greater when it comes to exports,” says Jesper Krogh Kristensen from Vision Denmark, a cluster organisation for the digital, visual industry in Denmark.

With a turnover of 1,3 billion DKK, the game developers are closing in on movies and tv, which in 2019 had a turnover of 1,7 billion DKK and 1,8 billion respectively. Looking at exports, movies and TV contributed 716 million DKK to the balance of payments, while the gaming industry alone exported 924 million DKK.

The latest numbers from 2019 Globally, the gaming industry is expecting a growth of 20 per cent in 2020 - which has been helped along by the pandemic and several lockdowns. Kristensen expects similar numbers in the Danish gaming industry when the numbers for 2020 are in. “Anecdotally there are a number of successes: We know that Ghost Ship Games sold two million copies of their latest game in 2020, Tactile Games doubled their turnover from 200 to 400 million DKK in 2019, and the veterans from IO Interactive are also doing really well. They earned back the costs of developing their newest Hitman game within the first week it went on sale,” Kristensen says. The Nordic neighbours are still ahead With global hits such as Hitman and IO Interactive, the mobile game Subway Surfers from Kiloo and Sybo, and artistically-driven Limbo and Inside from Playdead, Danish game developers have already made their mark on the international gaming scene. Now, a new generation of Danish game developers is about to make their entry onstage. Looking at Denmark’s Scandinavian neighbours, there is still plenty of room to grow further within the Danish borders. In 2019, the Swedish gaming industry had

Number of companies

1797

1691 1355

Number of FTEs

1319

929

847

Turnover in DKK million

924 659

581

Export in DKK million

580

275

273 135

120

Film

142

Games

Interactive

Growth in the Games category over time 1319 1000

990

924 847

905 774

822

494

516

524

116

141

142

2016

2017

2018

2019

706 500

1145

Number of companies Turnover in DKK million FTEs Export in DKK million

Note: The numbers are from the game studios alone. If supporting industries like development tools and others were also included, the numbers would be quite different. Danish-founded company Unity was listed on the stock exchange in 2020 at a market value of 172 billion DKK , corresponding to 28 billion USD. In comparison, Danske Bank has a market value of 100 billion DKK .

a turnover of 17 billion DKK, while Finland had a turnover of 15,6 billion DKK in 2018. But in Aarhus Filmby, the home of the Ideas Lab incubator targeted towards young game developers, a new generation are emerging, ready to take the industry further - even if the competition is international and tough.

“We have a strong belief, that we have a future here and that we have time yet to jump on that train. There is already a huge demand for employees in the industry, and my inbox tells me that there is an interest in finding the next Danish golden goose. The international investors are also showing an interest,” says Christian Nyhus

Games as a Business 2021

Andreasen, head of incubation at Aarhus Filmby. An international position of strength — but not by chance There are many indications that the Danish gaming industry soon will surpass film and television in size - if it has not already happened. With regards to exports, gaming is already far ahead. And with a new litter of gaming talents emerging, the potential for a truly international position of strength is set. There are, however, a few rough edges that the industry would like to see perfected. One thing is the lack of talent. A large quantity of the talent is already brought in from abroad. This is not necessarily to hire the best in their fields, but because the talent cannot be found locally. Investments are another challenge. Only a few public growth- and support initiatives are aimed at the gaming industry, and investments from private investors, especially at the seed and preseed stage, have always been a delicate matter for game studios. But investments are paramount if other studios are to be as successful as Ghost Ship Games. “We had several opportunities to receive investments due to our experience. But it is also a rarity that six experienced people have an ambitious game that they have the ability to make and just lack money. Fortunately, we had secured a runway for development for the first six months. Without it, it would probably have fallen apart,” Lundgaard says. If the conditions for the gaming industry are to be improved, it requires political recognition of, and support for, the industry. The politicians praise the game studios publicly, but that does not translate into financial support. Instead, the gaming industry falls between the cracks, lying between business and culture, becoming a subgenre of film and television production without its own dedicated strategy. At the moment, this is not the most important consideration at Ghost Ship Games. The studio grows relentlessly, is nominated for prizes, and has so far sold for 300 million DKK . With a major update to the game planned this fall, the game studio is still growing. “The first three months of 2021 have been the best months ever for us. So we’ll just keep going,” Lundgaard says.

Hitman

Subway Surfers

Inside

Deep Rock Galactic is one of the latest success games from Denmark, and it stands on a strong foundation built by other successful games like Hitman, Inside and Subway Surfers.

Sponsored: This articles is made in cooperation with Dansk Erhverv

The Danish Chamber of Commerce: The Gaming Industry is Experiencing a Growth Spurt That Needs Supporting The gaming industry and esports are experiencing rapid growth in Denmark at the moment. This success is spilling over into other industries, and if the opportunity is properly backed, it can become a global position of strength.

he gaming industry is larger today than both the film and music industries globally, and with a further 20 per cent increase during the Covid-19 pandemic, the industry now represents a $155 billion market worldwide. “It is important to bring it to light. Today, many still consider the gaming industry as a niche market, but there are several billion users globally,” says Jasmina Pless, Chief Consultant for Entrepreneurship Policy at the Danish Chamber of Commerce. The industry is also flourishing in Denmark, which has already supplied world-leading companies to the industry. These include IO Interactive, which is behind the bestselling game Hitman, and the software company Unity, which was founded in Denmark and has experienced such success that the company is today defined as a “unicorn”: a tech company with a valuation of over a billion dollars. Esport in the established business world In recent years, the gaming industry has gained a fast-growing little brother in the form of esports, which has attracted millions of viewers and is still growing rapidly - with Denmark at the forefront of that growth. Danish players are at the top of some of the major games - Dota2, League of Legends and Fifa. The Danish teams Astralis

and Heroic currently claim second and third place in the world rankings in Counter-Strike. Every year, the Danish company BLAST holds one of the world’s largJasmina Pless est tournaments Chief Consultant for with 500,000 fans Entrepreneurship Policy at the watching from all Danish Chamber of over the world. This Commerce in itself creates a good branding opportunity for Denmark, but also gives the established business community new opportunities. “YouSee, for example, uses gaming as a recruitment tool to find great IT talents. They do this, among other things, by using gaming as a perk, by making gaming facilities available and creating space for a culture where gaming is seen as a positive contribution to their work,” says Jasmina Pless. Similarly, Copenhagen Capacity has used BLAST to attract international IT talents to Danish companies, and the IT company NNIT is recruiting gamers for their Cyber Defence Department. “Many of the skills that gamers gain by being part of a team in Counter-Strike for example, are relevant in a cybersecurity department. Here you also have to think fast, and work as a team against a com-

mon enemy, which sits on the other side of the screen,” says Jasmina Pless. A position of strength which requires support Astralis has not only helped in making esports mainstream in Denmark. They have also actively helped reverse the unfortunate image of esports by emphasizing that exercise and a healthy lifestyle are crucial to being able to perform at a professional level. In this way, gaming and esports are well on their way to becoming not only a play-at-home hobby for enthusiasts - but also an industry that creates growth far beyond its own domain. “The established business community also benefits from new technologies that are evolving in the gaming industry. VR and AR technologies, which are known from Pokemon Go, amongst others, are used today in the construction and architecture industries. Unity’s technology, which was created to develop games, has made it possible to walk around a large construction site with AR glasses and ‘see’ the finished building and its components through the glasses,” says Jasmina Pless, who continues: “With the phenomenal growth in esports and gaming, there is now a huge potential for Denmark to grasp with both hands. But a leading position in gaming requires the support of Danish politicians to secure funding for the development of the industry as a whole.”

Games as a Business 2021

Sponsored: This articles is made in cooperation with SYBO

From Ecosystem to Ecosystem: Sybo Wants To See the Danish Gaming-Scene Grow things up and help them hit the ground running. We take that with a lot of pride, but also humility,” Gredal Nørvig says.

Mathias Gredal Nørvig CEO of Sybo

Sybo was born in the Danish gaming community. After becoming an international developer with huge financial success, they are now doing their best to give back to the community. Sybo started out as a humble indie studio trying to make ends meet just a decade ago. They bounced ideas back and forth with the rest of the Danish games-community while trying to get their mobile game studio off of the ground. Then they released Subway Surfers and struck gold. With more than 3 billion downloads globally, the mobile game is the most downloaded over the past decade. Along the way, this has made Sybo a very profitable business, and that has not only brought benefits to Sybo alone. “When Sybo was founded, both founders wanted to make a successful studio. And the second they turned that corner they wanted to use their influence to help make others successful,” Mathias Gredal Nørvig, CEO of Sybo says. The Copenhagen-based gaming studio feels a responsibility toward the ecosystem they came from. Not that long ago, they were the newcomers, and today they try to help other newcomers grow as well. ”We’re proud to be one of the beacons of the industry, and we take that badge with a lot of responsibility; we want to be the tide that lifts the other boats. We haven’t

been shy of using our influence, introductions, competencies or finances to help lift other studios,” Gredal Nørvig says. Investing in the ecosystem One of the more direct ways Sybo helps the Danish games ecosystem is through investments. “We have made one big, direct investment in Funday Factory in Aarhus, and several others in minor studios. At the same time, we invest indirectly through London Venture Partners, where we are partners, and they have, among other things, invested in the Danish studio BetaDwarf,” Gredal Nørvig explains. This doesn’t mean that Sybo was the reason the investment happened. BetaDwarf first and foremost got the investment because of the excellence of their studio, but the introduction made by Sybo was instrumental in making the two parties meet. Investors, as well as other industry veterans, trust Sybo, which allows Sybo to connect new Danish studios with giants like Apple, Google and Facebook. “We introduced Funday Factory to Snapchat and Apple Arcade. That was clearly an opportunity, and they have been able to seize it and execute on the opportunity. That’s not to say it wouldn’t have happened without our involvement, but as a trusted connector we have been able to speed

Banding toward politics However, boosting the business side of Danish newcomers isn’t the only item on Sybo’s agenda. They also want to make an impact on the Danish ecosystem in a broader sense. First and foremost, by signing up to Danish Producers’ Association. “We weren’t the first game studio, but we were the first of our size, which allowed us to speak about games as a business and the global ambitions of gaming with a louder voice,” Gredal Nørvig says. It’s been a long road to get politicians to talk about games as the rapidly growing global industry it is and convincing them that the industry is a viable career path with pension and security. Along the way, Sybo has been invited to join the Danish government’s Creative Growth Forum as the first game company, the Business Forum at the Municipality of Copenhagen and as part of the Business Leaders Association. Recently, Sybo co-initiated Vision Denmark, a new business cluster for the digital visual industries in Denmark, alongside Nordisk Film, Unity and existing NGO players. Since this foundation, Vision Denmark has recently been appointed as one of just 14 new, official business clusters in Denmark. “All those tiny wins for us are major steps forward for games as an industry in Denmark. And we are not alone anymore. Tactile Games has grown to become a huge company. IO Interactive is now a real player again. Funday Factory, BetaDwarf, Ghost Ship Games and Triband. We are actually a growing industry with more than 10 big companies that pay their employees a firm salary and contribute a lot in tax revenue,” Gredal Nørvig says.

Games as a Business 2021

Written by Sebastian Kjær

he limbs attached to a young woman in a red raincoat are neatly and painstakingly moved with a steady hand. Arms. Feet. Even the pigtails. A picture is taken. And then the small process that makes the doll come alive through stop motion starts all over. Karla, in the red raincoat, and her friend Kurt are the main characters in the video game Vokabulentis. An animated video game in the genre ‘puzzle platformer’ which uses stop motion to create the game’s animations. “There are three of us participating in the project. From the get-go, we decided that it was stop-motion or nothing. The format itself was chosen from the beginning,” says Esben Kjær Ravn, CEO and founder of the studio Kong Orange. It all began with an artistic idea back in 2015. Back then, talks between the game developer Esben Kjær Ravn, Johan Oettinger from the animation studio Wired Fly Animation and the artist Morten Søndergaard took place, with the discussion centring around creating a game that built on a poet’s linguistic treasure trove. Because the work of art took place in a fantasy realm and had to be both abstract, contain drama, and be accessible, a video game seemed like the obvious choice to make the vision a reality. After two years, the project is really starting to come alive. The three partners have managed to get by on small stipends while they perfected the technology. “We have created innovative technical solutions to integrate stop motion in the game. It is an existing technology, but it has not previously been used by other game developers. So we have the opportunity to create a dynamic game design, where the characters can move freely while maintaining proper stop-motion technique,” Ravn says. Most recently, Vokabulantis has raised money through a campaign on Kickstarter, which received words of praise from the Lord of the Rings actor Elijah Wood and the comedian Patton Oswalt. The 2000 backers are a testimony to the fact that art also has commercial appeal. Ravn is acutely aware that they have to have an income if they want to reach the finish line. “We learned the hard way with previous games that the excitement surround-

ing the game does not translate directly to dollars and cents. But it is great to know early on that we have that artistic expression and the ability to make people pay for it,” Ravn Says. Game developers are not common entrepreneurs At first, many game developers are driven by a love for video games and artistic ambitions on behalf of their craft. Making money comes second after the ambitions have been fulfilled. According to Karl Magnus Troedsson, a Swedish game veteran-turned-investor through the fund Loot Spawn, this is one of the key differences between the gaming industry and other tech startups. “Tech-startups try to solve a problem: We are a better bank for young people, we are last-mile delivery, whatever it is. They are trying to make our lives better, faster, and smarter. That’s not what game developers are doing. We entertain. We are much more attuned to Hollywood. And if you don’t know games, which is very hit-driven, how do you predict a hit?” Troedsson asks. He does not view game developers as financially driven entrepreneurs but as artistic creators. That does not necessarily mean that the urge to create art cannot be translated into good business. In fact, as an investor, Troedsson sees a huge financial potential in the industry. Game developers are driven by something else — for better or worse. “Maybe you wouldn’t find many tech startups that are truly passionate about solving a pizza delivery problem. It’s not their life goal. They do however see a business opportunity and they are financially driven. A lot of developers in the games industry are motivated by a creative passion, almost a need to get something off their chest, to actualize a vision which has been a mind bug of some kind,” Troedsson says.

Esben Kjær Ravn CEO and founder of the studio Kong Orange

Creativity meets millions of people The Danish studio Umami Games is a good example of the fact that game development can originate from a commercial viewpoint. When the three founders opened the studio, which focuses on mobile games, two years ago, it was with the ambition of building a great business.

“It is really hard to make money from publishing mobile games. Because of this fact, it was important to me to find co-founders who were as passionate as myself about games — but they also had to agree to make the business commercial, and that we would have to grow bigger than King (the Swedish studio behind Candy Crush employing 200 people),” says Riley Andersen, CEO and co-founder of Umami Games. Instead of creating innovative game mechanisms or animation techniques, Umami Games innovated the development pipeline. This means that in the last two years the studio has released 30 mobile games in the genre ‘hyper-casual.’ Of these 30 games, 10 were quickly discarded again. The rest have received a lukewarm response. But one game, ABC Runner, became a hit with more than six million downloads. It is all about speed. Fast development and fast testing quickly decide if a game has commercial potential. Today, Umami Games develops a prototype and tests it on an audience within a few days. The game will only be optimised and fully developed if the users show enough interest. “We get an idea that we turn into a prototype. Then we test it via paid marketing with the right users on Facebook. After two weeks we know if we will scale the game or not,” Andersen says. When the business model is built on ad-based games, it is not enough to have millions of users - the users also have to be profitable after spending money on marketing. This means that if it costs one DKK to get the user to download and play the game via paid ads, then it has to be good enough for the player to hang around and watch enough ads, to earn back 2-3 DKK. “Working this way is great because there is so much creativity and concept development that we quickly get to test the game on the right players. This way we also get to be more experimental because we quickly figure out if it is something the market wants,” Andersen says. She does not think that a commercial focus and creativity are necessarily at odds with one another. Yet when the earning-per-player is measured in a few Danish kroner, it is necessary to have millions of players before the game is a success. “We try seriously to combine creativity and data, seeking to embrace both parts

to prove that we can create really fun and creative games and earn money at the same time,” Andersen says. Business and art hand-in-hand Umami Games and Vokabulantis are on opposite spectrums of the gaming industry. However, both companies believe that business and art should go hand-in-hand. The funds, stipends, and state aid available in Denmark are not enough to cover an ambitious project. But for Ravn from Vokabulantis, which was largely launched with softfunding, he sees no contradiction between art and financial focus. “Unlike all of our competing arts, we are forced to justify the business potential in what we do. But it is also not the antithesis of art that there should be an

Karl Magnus Troedsson Game Veteran and investor, LootSpawn.Capital

Games as a Business 2021

For Vokabulantis, stop motion is both an artistic choice and a sales argument: “The process itself has quite a lot of marketing value for us. Just the fact that we hand-animate it means that some players attach a completely different emotional value to the project because they think that we deliver something extra,” Esben Kjær Ravn says.

Riley Andersen CEO and co-founder of Umami Games

audience. The balancing act is to make something you are happy with as a work of art, but which is also profitable. It is basically a condition that if you want to develop a game, you have to outline the business potential first,” Ravn says. Even though Vokabulantis’ starting point is artistic, the developers also have to incorporate retention, price, playing time, and other such business-driven parameters into their work of art. Likewise, Umami Games incorporates artistic aspects and creativity into their fast and innovative pipeline. “Why should one exclude the other? Why can you not be creative if you are commercial? It is exciting to be creative when you have to work around obstacles. We also see it as a creative challenge to make something that can entertain a lot

of players,” Andersen says. Even though the gaming industry is young, it has already proven that abstract and crazy universes - which never stood a chance in Hollywood - can easily break through commercially. “Think of Super Mario: A plumber jumping on turtles to save a princess. Nintendo is basically one long acid trip,” Ravn says and adds: “In the gaming industry, it’s possible to have free reign creatively while aiming for a large audience. It’s a challenge to combine the two, but it has proven possible again and again. And there are still many unexplored territories and unused potential. It is a young genre full of cowboys and cowgirls who are constantly balancing on the edge of what’s technologically possible.”

The Gaming Industry Is Driven by Hits But High Quality Does Not Necessarily Guarantee a Spot on the Hit Lists With the right release, gaming entrepreneurs can achieve worldwide, commercial stardom overnight. Everyone can publish their game for the world to buy. But creating the best game does not necessarily equate to financial success. Written by Sebastian Kjær

or five guys studying Medialogy at Aalborg University, becoming game developers started as a boyhood dream. But through a university project in 2013, that dream took off unexpectedly. “We developed a game as a university project and put it on the internet through our website. The night before we had to hand in the project, we saw that videos and reviews were starting to appear - the game demo actually ended up with 10.000 downloads,” remembers Philip Hundevad Nymann, one of the five founding members of the game studio Tunnel Vision Games. The demo led to an invitation to a game exhibition in Amsterdam, where the five friends won the prize for Most Innovative Game - ahead of several professional developers. But before taking advantage of the momentum, they had to finish their studies. When

they went all-in on developing the game in the summer of 2016 and founded the game studio Tunnel Vision Games, they hadn’t anticipated that it would not take one year to finish the game as they had thought. Instead, it took 3,5 years. After their game, Lightmatter, did eventually hit the market it received good reviews and the developers were proud of the result. More copies were sold than “there are inhabitants of Aalborg”, the third-largest city in Denmark, totalling over 200.000 copies. But the big break never came. So the five friends closed the studio.

Philip Hundevad Nymann Tunnel Vision Games

Many are trying to break through Because video games are essentially digital, they are easy to distribute. Global platforms like Steam, AppStore, and Google Play have made it easy for small teams to publish their games the same way the large, established studios do.

Games as a Business 2021

”Lightmatter” from Tunnel Vision Games is a light-based first-person puzzle game based on the simple idea: light is life and shadow kills.

Because of this, even small studios can hit a big break, if they create a popular game. Suddenly the possibilities are endless, and the earnings can be enormous. But that also means tough competition. “The biggest challenge is to survive making the first game. When you have survived that, you have experience and knowledge, and you will have some earnings from the first game which can boost game number two. The gaming industry is driven by hits, and many do not make it far. But if you make a hit game, you have advantages in the form of creating growth fast. And then the sky’s the limit,” says Jesper Krogh Kristensen from Vision Denmark, a cluster organisation for the gaming industry. Good games are not certain hits In terms of downloads, the biggest hit of the past decade came from Denmark:

Subway Surfers. The game, which was created in collaboration between the studios Sybo and Kiloo, hit three billion downloads last year. This makes it the most downloaded game in the 2010s. When the game came out in 2012 it went viral, and it has been one of the most downloaded games ever since. But according to Kristian Nordahl, COO at Kiloo, a lot has happened in the gaming industry since Subway Surfers came out. “The number of games that are released every day will probably surprise most people. We are talking 750-1.000 games released every day, seven days a week. So when you publish your game today, you are just one among many. Some of the amazing games published today don’t achieve financial success, because it is not necessarily the best games that top the charts - it’s the games that are the best at marketing themselves,” Nordahl says.

Almost one in five apps on Apple’s AppStore are games. This makes games the second-largest app category, and the category is still growing. Even when it comes to games played on a PC, which are typically more expensive to develop, the amount of games is huge: On Steam alone, there are more than 50.000 games available. This enormous competition has changed the rules for how to succeed in the gaming industry. That includes studios like Kiloo, who already has a hit in their portfolio. “We do not have a recipe for success every time. We can make a game, which, in our opinion, is a good game, but that does not mean it becomes profitable,” Nordahl says. Today, it takes more than creating a good game to achieve success; distribution strategies and marketing parameters are crucial for the game to stand out. “When Subway Surfers came out in 2012, user acquisition was not a thing you spent time on. Being featured in one of the stores came with a lot of free traffic, which had a self-reinforcing effect. Back then, it was almost exclusively about making a great game that caught on. That does not apply in the same way today. Of course, you still have to create a great game, but you have to back it by user acquisition to become successful,” Nordahl says. The small studios cannot make it on their own According to data from game analytics company Newszoo, six giants were responsible for half of the turnover in the gaming industry in 2018: Tencent, Sony, Microsoft, Apple, Activision Blizzard, and Alphabet. Still, new megahits are coming out of unknown studios regularly. The Swedish studio Iron Gate’s 2021 title Valheim is proof of that: In the span of six weeks, from February to March this year, Iron Gates sold six million pc games, priced at DKK 125. Even though the Swedish studio developed the game, they had help from the publisher Coffee Stain Studios. And, according to Tunnel Vision Games, a publisher like that is vital to success. Even though the Aalborg-native’s studio did not achieve the same impact as Iron Gate’s Valheim, Nymann gives huge credit to their publisher Aspyr for selling more than 200,000 copies of their game Lightmatter. “It is a lot harder to make it big without a publisher, because of the sheer

number of games out there. The biggest issue in the industry is getting discovered. Finding the hidden gem is difficult because everyone is fighting for attention,” Nymann says. A closed studio is not a failure Even though the sale of Lightmatter was not big enough to keep Tunnel Vision Games going, Nymann does not think of the game as a failure. Actually, quite the opposite: The developers are proud of the result. On average, 1.700 users have rated it 9 out of 10 stars on Steam. What’s more, the game is nominated in six categories at this year’s Spilprisen - with one of the categories being ‘Game of the Year.’

“We did not make a bad product. On the contrary, the game is really good. We achieved what we set out to do — and a lot more. We made a game that we are extremely proud of, and which achieved success on the market. It just was not big enough to produce financial stability,” Nymann says. Maybe the game’s appeal was not broad enough. Maybe the timing was off. Maybe the distribution strategy should have been different. “But we’ll take so many positive things with us. Being able to say ‘here and no further,’ and finish with a smile on your face, is a huge redemption,” Nymann says.

Games as a Business 2021

Sponsored: This articles is made in cooperation with Digital Devotion

Aarhus-native Gaming Startup Wants to Solve Gaming’s Social Problem They don’t disclose many details about their unreleased title yet. What is certain, however, is that through recent mega-hits like Fall Guys and Among Us, both of which exude cosiness over fast-paced action, Digital Devotion Games is tapping into a growing trend in the market.

The game studio was founded in 2019 and has since bootstrapped their way to where they are now. The company recently received an investment from Accelerace, which has given the company enough capital to grow the team from five to eight people, in order to complete their first game.

Online games are competitive and can often turn out to be an unpleasant experience for the players. A game development company from Aarhus has set their sights on this: Digital Devotion Games’ mission is to make it fun for groups of friends to hang out while gaming. Today, the most popular online games all have an element of competition and, when combined with the adrenaline-pumping action, players can quickly lose their temper with one another. This frequently creates a harsh tone between players, with the biggest online games like League of Legends, Counter-Strike, and Dota2 all known for having notoriously toxic communities - “N00b, go play Tetris!” Mikkel Søgaard knows this challenge all too well. While deciding upon education and jobs in the gaming industry, Søgaard always knew that he wanted to start his own business at some stage. Therefore, it was obvious to him when the time came that his company should be a game studio, so he could create a game that would solve this problem of aggressive, or angry gamers. His vision: to create a game where a chilled atmosphere is paramount and where groups of friends can hang out while playing - regardless of whether they are beginners or hardcore gamers. “The issue comes from a rather personal place: I have used games as my primary social space for most of my life, as many others do today. But the older I have gotten, the harder it became to have

a good social experience in the gaming world with friends. Competitive games have taken over the gaming market, and that does not create positive social togetherness,” says Søgaard, founder and director of Digital Devotion Games. Today, if you are trying to find a more relaxed and social alternative to the big titles, you will often encounter casual games that do not appeal to the more hardcore gamers in your group of friends. That is why gamers often end up playing the more competitive games after a few hours in a casual setting - despite their negative social consequences. “The games on the market that focus on socialising have been designed around short play sessions and superficial gameplay. Because of this, they function primarily as ‘social fast food’ rather than meaningful social entertainment,” Søgaard says. The mission is the key Digital Devotion Games has had to mix existing game genres and invent completely new ways of operating to achieve the kind of game they wanted. The developers call the new genre “Adventure Party Game,” and they explain that it should feel like being in an amusement park with friends. “How do we create friction-free scenarios while playing, where it’s not about winning but about having fun together? That issue is not just the foundation of our game, but the foundation of our company,” Søgaard says.

Problems are investable Digital Devotion Games started out by focusing on a problem in the gaming community. Then they began examining how that problem could be solved via the game. This has not only created a different development process but also made the studio interesting for potential investors. This is saying something in an industry where early investments are notoriously hard to come by. “Our process, where we are building a company while developing a game, has turned out to be quite valuable. We actually hit on something. The fact that we have a problem we want to solve, and that we are actually tracking data and have different segments of the market that we are looking at, has given us a boost,” Søgaard says. Out of 200 applicants from a range of industries, Digital Devotion Games was one of just 16 startups that made it all the way through the accelerator program Beyond Beta by Accelerace. This feat led to Accelerace’s first-ever investment in a game developer. “They have a dedicated and skilled team, who have an incredible amount of knowledge of their specific segment. They have a clear vision for what the future of gaming should look like, and their studio is built on a vision and not just one game. This is pulling them in a direction which is more like a common venture capital investment,” says Michael Rohde Böwadt, Business Accelerator & Investment Manager at Accelerace.

Digital Devotion Games has not yet released its social game. If you want to test the game before its release you can sign up for their newsletter right here: www.digitaldevotion.io

In Denmark, esports is largely synonymous with Astralis and Counter-Strike as well as eSuperlige and Fifa. But we also have international mega-stars in other games; Rasmus “Caps” Winther is among the very best in the world in ‘League of Legends’, and Dota2 star Johan ‘N0tail’ Sundstein won a prize worth 7 million USD, making him the esportsstar who has earned the most competition money in the world - across any game.

Thanks to Astralis, Parents Now Approve of Esport As an industry, esports is growing rapidly. In Denmark, the Astralis stars are considered national heroes, not least thanks to the organisation behind the team that made Counter-Strike mainstream.

Steen Laursen Director of communications at Astralis

Written by Sebastian Kjær

ot many years ago, most people would have disapproved of the words sport and video games being used in the same sentence. Video games were played by overweight guys who sat in their mom’s basement gaming and eating chips. Playing video games could not in any way be compared to noble sporting disciplines such as football. Today, however, it is not uncommon that the Danish Counter-Strike stars are mentioned in the news. Not as a curiosity, but next to the latest results from

the national football team. And that has everything to do with the esports organisation Astralis, and their pursuit in making Counter-Strike: Global Offensive (CS:GO) popular. “The popularity of esports is based on the work of a lot of enthusiasts over the span of many, many years. Up until 2016, there would only have been a few, if any, who had invested in an organisation whose goal was to target the general public in a mainstream entertainment industry. It was primarily for gamers, with gamers as the target audience,”

says Steen Laursen, director of communications at Astralis. He explains that the organisation behind Astralis was created based upon the ambition of making the game popular with a wider audience. Since then, the Danish CS:GO team, Astralis, has become the most successful in the world. Because Denmark is a small country, this is something the Danes celebrate as if it was an Olympic medal in curling. But the organisation behind has also put a lot of work into figuring out how to build a media portfolio and

Games as a Business 2021

Looking at the total number of hours watched, the Astralis CS:GO team comes in at second place globally, with 42,8 million hours of gameplay watched in 2020, according to the memo from the Danish Chamber of Commerce. The memo also shows that the total turnover for Danish esports is estimated to be 306 million DKK in 2019 — in comparison, the gaming industry had a turnover of 1,3 billion DKK . But Astralis is not just a poster boy for a healthy esports industry in Denmark. The organisation has created a sense of national pride around the team’s CS:GO stars. Danish politicians have responded to this with a separate strategy for esports, which was published in 2019. “The government wants to create good conditions for entrepreneurs and companies to take advantage of the many opportunities in esports, which is a source of both increased growth, entrepreneurship and employment,” the strategy states. It is followed up by 10 million DKK over a period of three years to strengthen Denmark’s position as a sporting nation.

a live show around esports, which appeals widely - among other things by bringing in experienced professionals from the entertainment, media, sports, and concert industries. It’s this process that has put Denmark on the global esports map. “We have ended up being among the most significant in the Nordic region, Europe, and the world, because we were the first organisation behind a team in the West to really appeal to the general public. Today, 60 percent of Counter-Strike viewers have never played the

game themselves. I think we can be proud that we, and the Danish esports industry, have changed the world a little bit,” Laursens says. The fast-growing little brother According to a memo from the Danish Chamber of Commerce, esports will grow globally by 70 percent and reach 10 billion DKK by 2024, while the number of viewers is expected to reach half a billion by 2022. Compared to the gaming industry’s global turnover of USD 155 billion, esports is still a small industry.

A new perception of gaming The Danish success has in turn made esports a school subject taught in primary school and high school. Local communities and associations want esports clubs and, as mentioned earlier, esports has gotten its own political strategy. In a broad sense, Astralis has removed the taboo surrounding gaming and made esports an acceptable career dream, in the same way playing football professionally is. “When we talk to foreign media, we often talk about a healthier lifestyle in esports — we are a global role model. It was a strategic decision to help broaden the acceptance of these boys and girls; who they are and can do,” Laursen says. Although esports and the gaming industry are both based on computer games, there are not many other parallels between the two industries. The gaming industry is not necessarily growing just because more people are watching esports - but perhaps the gaming industry can benefit from the lobbying work for better conditions which the esports industry has laid the groundwork for?

The Gaming Industry Is an Overlooked Moneymaker:

“The Politicians Have Been Dragging Their Feet” Another wave of successful gaming companies has been coming out of Denmark in recent years. Yet from a political point of view, there is still no vision or strategy for the industry and, according to experts, that is a problem. Written by Sebastian Kjær

reativity is blossoming in the old industrial quarter of Aarhus’ southern harbour. Filmby Aarhus, a creative business district with more than 100 movie, media and game companies, calls this area home. One part of Filmby Aarhus is dedicated to the Ideas Lab incubator, where game developers work alongside movie makers, VR pioneers and other digital entrepreneurs - all aspiring to create the next big thing.

The director of the incubator, Christian Nyhus Andreasen, explains that the incubator is working towards creating better terms and structures for the gaming industry. What’s more, he thinks it’s a shame that the sheer number of successes from the Danish games industry hasn’t yet convinced politicians to back the industry - a necessity if the industry is to gain an even stronger position globally. “It has not been recognised that this is an industry that requires investments.

Christian Nyhus Andreasen Head of Incubator, Filmby Aarhus

Games as a Business 2021

The industry is not successful because we have some magical creativity in Denmark, and many believe that the politicians have been dragging their feet. They have looked at the industry and said: You’re doing well on your own. But there is definitely potential for more, much more,” Nyhus says. However, the Danish games industry is actually doing well - both in terms of revenue and export, which is growing year-over-year. With a background in Sybo, as well as an advisor for multiple Finnish, German and French game companies and investors, Nyhus has seen big differences in how serious the gaming industry is perceived in different countries; is the industry culture, tech or both? If you ask him, he sees great potential for the industry - both cultural and commercial. “We certainly believe that we have a future here and that we can get the wheels rolling in Denmark. This is also why we invest in gaming at Filmbyen - otherwise, we would stick to movies,” Christian Nyhus says. Overshadowed by films, tv, and theatre The 223 state-subsidized theaters in Denmark receive DKK 1.2 billion in support annually. Last year, the Danish Film Institute supported the development, production, and dissemination of feature films with DKK 221 million. Yet for digital games, there was just DKK 12 million in financial support. According to Jesper Krogh Kristiansen from Vision Denmark, a business cluster for the digital visual industry in Denmark, this clearly indicates that there is a lack of strategy and vision for the gaming industry in Denmark. “It almost seems irresponsible culturally. Recent figures from media research shows that Danes spend more time on digital games than print media. It, therefore, seems insane that there is so little attention on it in relation to making sure that there are some specifically Danish offers, and to ensure that there are some quality offers with a Danish theme,” says Jesper Krogh Kristiansen, Games Consultant at Vision Denmark. However, he doesn’t believe that games should solely become art projects funded by the state. A vision for the industry as a whole could also be based on the sector as

the commercial industry it also is, and include plans for export initiatives, development of new talent through the education system, or better financing opportunities. Regardless, it baffles him that politicians don’t seem to have thought about how they want to ensure the next generation of Danish games successes - despite their admiration for success stories like IO Interactive, Unity and Sybo. Denmark’s Nordic neighbours are the frontrunners Even without tremendous financial support or a dedicated strategy for the area, the gaming industry has steadily grown into an industry worth DKK billions. The industry even punches above its weight on the international arena. Yet continuous success calls for action, believes Christian Nyhus from Ideas Lab . “It is clear right now that the countries around us are setting up initiatives where the public sector finances parts of their game development. We have not gotten to that point in Denmark at all,” he says. In Germany, for example, the “German Games Fund” has been launched, which supports the industry with €50M annually. Because the gaming industry is growing explosively, the German tax authorities expect to get €90 million back in additional tax revenue. At the same time, it is expected that the focus on the industry will lead to an additional €400M in investment from, amongst others, private investors annually. The gaming industry on a local scale While the politicians have no overall plan for the gaming industry, several municipalities have seen potential locally. In Norddjurs Municipality, gaming is viewed as a growth potential supported both strategically and financially. Game development can create growth in itself, but it can also support existing businesses, drive education and ultimately be part of an alternative settlement strategy for newcomers. The same applies to Viborg Municipality, where animation is in the spotlight. Here, the focus is on building a strategy that leads to growth. And in Aarhus Municipality, a few lines about computer games have recently been added to the municipality’s cultural and business strategies, which pleases Christian Nyhus.

The incubator Ideas Lab houses 10-12 companies at any given time. A third of the office space is reserved for gaming entrepreneurs.

“It is something new that we managed to insert in the business strategy for Aarhus Municipality. There are not many concrete initiatives in the strategy yet, but now it is at least something that we will talk about tangibly,” Christian Nyhus says. The message from the industry: Take a stand! Neither Vision Denmark nor Aarhus Filmby has plans or demands that the politicians should budget a few million Danish kroner for. To them, it is more

important that the politicians take a stand with regards to the industry and its potential. The industry should seize the initiative because right now the Danish gaming industry is experiencing a new upturn. “There is still a wave we can ride even if we missed the first and second wave of successful game developers. We have to create better conditions for companies to establish and grow themselves in Denmark. We should have begun working on that a long time ago, but late is better than never,” says Christian Nyhus.

Games as a Business 2021

Sponsored: This articles is made in cooperation with CopCap

“All Those Companies Making Really Great Games Are All in Copenhagen?”

Julian Gosiengfiao Lead Game Designer, Sybo

A career as a Game Designer has led Julian Gosiengfiao to Copenhagen by pure chance. But the number of professional opportunities, as well as quality of life in the region, might make him stick around for a while. Today, Julian Gosiengfiao is working as a lead Game Designer for an upcoming (and still super-secret) game from SYBO in Copenhagen. Yet before he joined the company back in December, the Hong Konger didn’t plan to move to Denmark. “My spouse and I were looking for a change, but Copenhagen and SYBO weren’t really on the radar. SYBO reached out to me, I had a couple of ex-colleagues who ended up with SYBO, and their impressions were very positive. They are highly regarded as being artistically-driven, and it’s nice to see a company where artistry plays a leading role in why their games are so successful. I saw it as a place where I could go and grow my skillset while working with people I really respect,” Gosiengfiao explains. Before swapping his job in Barcelona for one in Copenhagen, he had never been to Denmark. After a few months, he’s thrilled with the Danish capital - both because he isn’t a big fan of sweltering heat, but also because of all the talent he has already met in the games industry here. “There is a really nice, local games community. SYBO, Playdead, IO Interactive – all companies that are experts at what they do and make games people play around the world. As someone coming from the

outside, I never made the connection: All those companies making really great games are all in Copenhagen? I feel lucky to hang out with these guys while making games,” Gosiengfiao says. We need foreign talent Julian Gosiengfiao is far from the only foreigner in the Danish games industry. As a burgeoning international industry, most of the major studios have a high percentage of foreigners. “There is a need for foreign talent - both because the talent pool locally is not large enough, but also to attract the most talented people from all over the world. This is necessary if you want to compete in the tough gaming industry,” says Merete Sandager, Senior Talent Attraction Manager at Copenhagen Capacity. Copenhagen Capacity is working towards making Greater Copenhagen visible as an attractive career destination and has worked actively to connect international talent with the Danish gaming industry. “We have several talented game studios that makes it attractive for the talents to work here. But one of the things that also makes it attractive to come here is precisely our different approach to both work and private life, such as work/life balance, work culture, employee development, teamwork, etc., which differs from what they have been used to,” Sandager says. A painless move Despite the reputation of being soft-spoken and introverted, Julian Gosiengfiao

has found the Danes to be open and friendly. This has been particularly helpful when moving to a different country with a spouse. “It is hard setting up because you feel like you’re giving up your whole life. When you’re moving for a job you have a network to tap into, but in some places it’s really hard for my spouse. But - as much as it can be – it’s been made very painless to move here. We have never had that anywhere else,” Gosiengfiao says. Through a “Spouse Care Program,” they have found it easy to find and hang out with other couples, who have also relocated to Copenhagen. This has also proved to be a great outlet for the strange experiences which come with arriving in a new country - like the lack of curtains and lamps in their new apartment. Despite the curiosities, Gosiengfiao is not dismissive of staying in Denmark for a while: “I don’t know how long we’re going to be in Copenhagen. But I think it’s a great place to start a family.” GREATER COPENHAGEN CAREER PORTAL •

•

Greater Copenhagen Career Portal is a service that lists jobs at companies in the Greater Copenhagen region especially suited for international candidates. It functions as a matchmaking service that facilitates contact between companies in Greater Copenhagen and qualified international candidates interested in pursuing a career in Greater Copenhagen. There are currently 171 jobs opening in the games industry, which you can find them here: https://careers.greatercph. com/gamedev If you are considering a job in Greater Copenhagen, sign up for our GameDevTalent Pool and get career news directly in your inbox. Sign up at https://careers.greatercph.com/talentpool-game-development It’s free for a company to sign up for a company profile at the Greater Copenhagen Career Portal. Sign up here or contact Merete Sandager at msa@copcap.com to learn more.

Sponsored: This articles is made in cooperation with Norddjurs

In Norddjurs, the Gaming Industry Is a Position of Strength for the Entire Municipality They are seriously betting on the gaming industry in Norddjurs Municipality. Not only as an engine for growth for the region, but also as a contributor towards education, settlement, and as a means of supporting the rest of the business community.

ot many people thought about education in 3D graphics and computer animation in 2004. But they did in Grenaa, a town located at the very tip of the Jutland peninsula’s nose. Ever since then, the venture has grown to include a 3D College, a Game College, and an educational course as a Computer Game Scientist. All these ventures are supported by the municipality’s investment in gaming. “It is not something we have invented ourselves within the municipality. It builds on site-bound resources; there are some innovative people at Viden Djurs (one of the local educational hubs) who have developed something exciting - and they have involved the rest of us,” says Jan Petersen, mayor of Norddjurs Municipality. Today, these educational courses are the links in a chain with the entrepreneurial environment of Game Hub Denmark at the end - collectively called “The Game Mile” in Grenaa. Even though it started with Viden Djurs, the municipality has played an active role in developing and investing in the gaming industry. “We are in this together. At the municipality, we have to get our hands dirty by

setting the framework, and make targeted investments that make it successful,” Petersen says, and adds that the municipality has, among other things, contributed to establishing housing for the college students, converting an old factory building into gaming environment and directly supporting several initiatives financially. Unlike other business clusters, the gaming cluster in Norddjurs Municipality not only intends to benefit the gaming industry and create new jobs. The cluster organisation will also be a partner when it comes to the youth environment in Grenaa, settlement strategy, and the established business community in the local area. “The Game Mile” At the town’s “Game Mile” young people can start their vocational education. Graduate high school. Study at university. And finally end up in the Game Hub at the end of the road as an entrepreneur - all focused on the gaming industry. “It is not difficult to make a high school course targeting the gaming industry. The difficult part is creating the ecosystem we have here in Grenaa,” says Søren Hoffman

Jan Petersen Mayor of Norddjurs Municipality

Mette Lindhardt Chairman of Erhverv Grenaa

Hansen, Head of Innovation at Viden Djurs. He continues: “What we have actually succeeded in doing, here in Norddjurs Municipality, is creating a complete ecosystem within education and entrepreneurship, which is completely unique. There is no doubt that Game Hub, in particular, would never have become a reality if we had not had a really excellent partner and sponsor in the form of Norddjurs Municipality and the Central Jutland Region.” Specifically, the path from education to entrepreneurship has created 47 new CVR numbers (the unique registration code associated with specific businesses in Denmark) in Norddjurs - including Ahoot Media, which develops educational games, and Sirenix, which makes software for other game developers. “We have come into this world to help younger generations succeed in the gaming industry, and I do not think it would have been this easy if we had been somewhere else in the country. Here we have actually succeeded in creating a common vision of gaming as a position of strength. And it’s more than just celebratory speeches: It’s a concept which actually

Games as a Business 2021

municipality provide access to new skills that have not been on offer to the same extent before. This means even more value for Norddjurs Municipality if the skills can be linked to the established companies in the area. “There is some entrepreneurial potential, but there are also talents and skills, especially in IT, that this established industry can benefit from pushing into other industries. It is already something that is used constructively - for example for marketing or developing apps in collaboration with these young people,” says Mette Lindhardt, who is chairman of Erhverv Grenaa. Just as in the rest of the country, large parts of the established business community in Norddjurs Municipality are facing digitization. How comprehensive this digitization is, depends on which company you are talking about. But the need is there, and with the gaming cluster’s presence in the area, the availability of digital skills has increased. “I see an even greater potential than what is being redeemed at the moment. More attention must be paid to the benefits that can be gained from collaborating with these newly developed skills - the fact that the municipality has this gaming cluster brings advantages which other companies can benefit from,” Lindhardt says.

translates into something concrete in the real world: Game Hub,” Hansen says. While it would be great for the gaming cluster if one of the entrepreneurs created a hit like the team behind Hitman — IO Interactive, with 200 employees — less would be a success too. If it can provide a continuous growth of small and medium-sized companies, it is also a success, especially in light of what the venture can otherwise contribute towards the municipality. Education and business have to work together With a sustained rate of growth potential, the gaming cluster is growing larger every year. But how large it ends up being - and how long it will take - is difficult to predict. “It’s a long, tough stretch. I think it means a lot that we have a strong tradi-

tion for education within the municipality and can see the whole picture, because it creates a new talent pool in the municipality,” says Else Søjmark, who is chairman of the business and labor market committee in the municipality. Both gaming and education are part of the municipality’s political business strategy, and for Søjmark, the two go hand-in-hand. “It is about both entrepreneurship and talent development. And we are both good at recruiting students for our educational courses - primarily from outside the municipality - and at retaining and anchoring them in some of these exciting environments,” says Søjmark. The potential is huge for the existing business community The many new educational offers in the

A “Cold Hawaii” for gamers Today, between 250 and 300 young people move to Norddjurs Municipality every year to attend one of the many educational courses within gaming. This fact pleases the mayor because it provides an opportunity to showcase all that the municipality has to offer. “I compare it to Cold Hawaii on the West Coast of Jutland: Instead of imitating everyone else, we need to find out where we are particularly skilled and what can make us attractive to outsiders,” Petersen says. With their strategy for the gaming industry in place, Norddjurs Municipality is well on its way to proving what a long and tough road of growth can result in. “There is an economic and political risk, which, of course, must be commensurate with the value we end up with. But it is not an employment project. It is an innovation project for the whole municipality, in a very interesting niche,” Petersen says.

The Gaming Industry Is Not Just for Games:

New Subgenres Are Emerging A single video game initiated the growth of an enormous, worldwide industry during the span of just a few decades. Now, entrepreneurs are creating businesses by inventing new subgenres, which are taking gaming technologies and mechanics to new heights. Written by Sebastian Kjær

he gaming industry was started by a single game in a university in the US back in 1962, when a group of young engineers created the game Spacewar. A simple game by today’s standards, which primarily consists of a bunch of white dots moving on a black screen. Yet this simple game, where two players have to move their spaceships and shoot at each other, has grown into a global industry. Even though the game is recognised as the first of its kind, one of its inventors later disclosed that it was not written in the stars that video games would be born at exactly that moment in time. “If I hadn’t done it, someone would’ve done something equally exciting, if not better, in the next six months. I just happened to get there first,” Steve Russel, one of the inventors of Spacewar, later stated. One game became a global mega-industry. And that industry has always been driven by innovative entrepreneurs, who continually tested the boundaries of what was technological possible - and along the way invented a myriad of new genres, subgenres, and business models.

A Danish Netflix for gamers If esport is a game development subgenre, GamerzClass is a subgenre to the subgenre. The company offers training in esports, which the players use to better the game. Even though it existsa niche within a niche, the potential for growth is huge. In the last two years, the company has gained thousands of subscribers and has grown to 20 employees working full time in a basement in the Copenhagen borough Nørrebro. Both Danish and international venture funds see the potential and have invested millions of Danish Kroner in the company. “It is going well and we have even gotten bigger during the pandemic. We have a hard time imagining a world without a Netflix for gaming content. So that is what we aim to be,” says Victor Folmann, CEO and co-founder of GamerzClass. Most recently, the startup has gotten an insight into how they might appeal to the general public by collaborating with telephone provider 3, which offered their customers access to GamerzClass in addition to their phone subscription. Their ambitions for user growth are also massive: by the end of 2021, GamerzClass

Games as a Business 2021

For Rokoko, gaming is their fastest growing segment, both in the form of studios that buy a motion capture suit from the Danish startup, but also because Rokoko has created a “Motion Library”, where game developers can buy movements that they can use in their game without difficulty.

expects to have at least 100.000 subscribers, and by 2024 that number should have grown to over one million. A benefit for game developers GamerzClass is positioned somewhere between gaming, EdTech, and entertainment. But the potential for experiencing a new growth spurt is first and foremost created by large game publishers. Otherwise, companies like GamerzClass would not have a curriculum to teach. “The gaming industry develops games and we create educational content. We are basically building our business on a game. Game developers are good at getting people hooked, so a lot of people already have a problem: They want to get better at the game. But they are not being cared for enough by the developers, so we are stepping in by offering structured lessons,” Folmann says. However, the relationship goes both ways: The developers also benefit from GamerzClass’ new service. “When the players get better it will keep them playing for a longer time, so we are actually giving each other a boost. An interesting thing we experience is

that some are still subscribed to GamerzClass even after they have stopped playing the game. They like being part of the community surrounding the game,” Folmann says. The gaming industry is taking over other sectors The Danish startup Rokoko has developed a suit that can record and capture motion. Initially, it was primarily targeted at movie-makers, but the gaming industry is now Rokoko’s fastest-growing market, as it enables much easier character animation for games. “Parallels can be drawn from the gaming industry to a lot of other industries. Hollywood already uses gaming engines from Unreal and Unity for large chunks of their production, and we see a lot of other hybrids where tools from the gaming industry are combined with our suit in a wealth of industries. The divide between how you make games, movies and other 3D-applications is getting smaller and smaller,” says Jakob Balslev, CEO and co-founder of Rokoko. More Hollywood movies are depending

on computer animations. But Hollywood is also spilling across into the gaming industry. The actor Eric Jacobus became famous for providing motion footage for the main character Kratos, in the video game ‘God of War’. According to Balslev, it is just a taste of how tools from the gaming industry, such as Rokoko’s, are well on their way to making their entrance in all sorts of other industries. “Architecture, design, safety, health, the car industry, fitness, sports - we have people writing to us from all sorts of industries who want to use our technology, even though we primarily market ourselves to the entertainment industry. And in most places, it is game developers who have to solve the task,” Balslev says. Recently, Rokoko sold a suit to the car manufacturer Tesla, who will be using it to simulate human movement in the digital environment where they are developing their cars. “This way, innovation from the gaming industry has an impact which transcends everything. I think the lines are getting increasingly blurred,” Balslev says.

Danish Private Investment Funds Eye Potential Investments in the Gaming Industry The Danish gaming industry has lacked dedicated investors since the closing of Capnova. But the industry is changing again, and Bumble Ventures and Accelerace wan to cash in on the potential. Written by Sebastian Kjær

he Danish gaming industry has produced a number of large and extremely profitable companies in the past decades. Yet the number of Danish investors who specialise in the industry is easily overlooked. That may be about to change. Since Bumble Ventures was founded in September 2019, the fund has invested in five startups, four of which are gaming-related: Astralis, GamerzClass, Hiber from Sweden, and, most recently, Grid from Germany. This is not because they see themselves as a gaming fund, but because the progress the industry has experienced during the pandemic has made it an exciting sector to invest in. “We are a generalist fund. We have no particular themes, industries, or markets that we invest in. But there is no doubt that 2020 has been a good year for the gaming industry, at the same time we have a strong approach to the gaming space because of the Better Collective founders, who also co-founded the fund,” says Carsten Gjørtler Salling, Investment Manager at Bumble Ventures. Shovels and pickaxes Even though Bumble Ventures has opened up to gaming, so far the fund has only invested in esport and platforms and not classic game studios. And that is not by coincidence. “We have a few opinions about what

is particularly interesting within the gaming space, and also what we are not so interested in - and these are traditional game studios. There are a lot of those out there, but we do not feel that we are the right ones to assess them. We are generalists, and it is difficult for us to find the successes among the many who try,” says Salling. Having said this, the fund would like to be exposed to the rapid growth that the industry is experiencing, while maintaining a risk profile they can handle. Therefore, Bumble Ventures focuses more on the infrastructure around the gaming industry. This is comparable to Gamerzclass, which sells esports classes, and Hiber, which is a platform where players can develop games themselves. “Instead of investing in the gold mines, we invest in shovels and pickaxes. It is difficult to know which mine will strike gold, but they all need picks and shovels,” explains Salling, who leaves the door open for change at some point in the future: “It’s definitely an issue of risk, and our self-knowledge is that there are others who are better at selecting the right game studios. But there are many investment opportunities in game studios, and there are also some that we go ahead with because it looks exciting. So at some point, it may well be that we invest in a traditional studio. We have just not gotten the appetite for it yet.”

Carsten Gjørtler Salling Investment Manager at Bumble Ventures

Michael Rohde Böwadt Business Accelerator & Investment Manager at Accelerace

Games as a Business 2021

New business models make it recognisable Accelerace also recently completed its first investment in the gaming industry — a very early investment in the game studio Digital Devotion Games. The fact that this game studio became a part of Accelerace’s accelerator program was not down to chance - it was a conscious decision to take a greater interest in the industry. “There are not a lot of game developers who view themselves as startups, but Digital Devotion Games do just that. That mindset appeals to me. And the market is growing and fast becoming ripe for the taking. It is not just for children, everybody is gaming. It’s this factor which brings about change in the market,” says Michael Rohde Böwadt, Business Accelerator & Investment Manager at Accelerace. The fact that the gaming industry has found new business models has been crucial for Accelerace. Today, games no longer have to be stand-alone purchases like movies. They can also be built as “Games as a Service” (GaaS), which borrows from the “Software as a Service” model that investors around the world cannot get enough of. “We have previously not invested in games, as the business model has not suited our strategy. With the shift to the Games as a Service model, we see that

Q&A: Vækstfonden’s relationship with the gaming industry

ue to a simplification of the business support system, the innovation environment Capnova, which focused on games, was closed down, and the investment money was put into Vækstfonden. Vækstfonden has supported companies like Blast, Rokoko, and Unity and provided loans for the more classic game development companies. But they also have a broader take on startups when compared to Capnova. We asked Erik Balck Sørensen, who is responsible for direct investments at Vækstfonden, how he sees the relationship between the state-owned fund and the gaming industry. What is your role as investor when it comes to the gaming industry? “At Vækstfonden, we want to help drive innovation and new technologies. Here, the gaming industry is interesting because there is potential to build a Danish position of strength. We have many creative companies that need capital for scaling, and we have Danish capital partners who focus on gaming investments. Here, Vækstfonden wants to be the piece that can help finish the financing puzzle.” What specific opportunities and risks are connected to the gaming industry?

the potential is different and potentially larger, and we, therefore expect that we will invest further in GaaS studios in the future,” Böwadt says. If game developers manage to incorpo-

And: Are there any factors that limit your opportunities as an investor? “We have a talent pool and good education in Denmark, which gives us special opportunities to create a position of strength in this area. Unity Technologies, Kiloo / Sybo, IO Interactive, Tactile Games and several others are obvious examples of companies that have managed to put Denmark on the world map in this area.” The industry specifically lacks more risk capital for early-stage investments. Is this a demand that you also experience? “What the companies need depends on the stage they are at. Early-stage financing can be one of several ways to go, but we also have several gaming companies in our portfolio that have received financing through loans. We always talk to the companies about the different options.” In your opinion, have you done enough to take the baton from Capnova after their closure? “At Vækstfonden, we help develop many different technologies and companies. And of course, we also keep an eye on gaming. There are many opportunities for the gaming industry for financing through Vækstfonden, and fortunately, we also have many skilled partners. This way we can help support the many exciting companies together.”

rate that kind of thinking into their business model early on, he also thinks they will have an easier time speaking the language of venture funds - and thereby attracting more investments.

Sponsored: This articles is made in cooperation with Nordisk Games

Nordisk Games: Investing in Games is a Long-Term Business With more than 1 billion DKK invested, Nordisk Games is betting big on the European games industry. And with their long-term approach, they might as well try to make a positive impact along the way.

ordisk Games has only existed for five years. But when the century-old entertainment company Nordisk Film decided to bet on the games industry back in 2016, they did so in a big way. Today they have invested well over 1 billion DKK in 9 games studios - and their ambitions don’t end there. “We are not investors trying to make a quick profit. We are not investing in order to sell as fast as possible with a factor x. Nor are we aiming to buy whole companies outright - we are aiming to buy between 20 and 40 per cent and help studios grow from there. If later on in our relationship the situation for the owners and Nordisk is right, we are happy to increase our ownership. But the key difference we bring is a focus on investing for the long term,” explains Markus Windelen, partner and director of operations in Nordisk Games. Windelen recently joined Nordisk Games after spending 25 years in the industry across several game developers and publishers. His affection for games and the industry combined with Nordisk’s unique approach is the reason he decided to join the team. “As an investment vehicle, we’re a very different animal, so to speak. Much of this stems from the fact that our ultimate mother company is Egmont, which is a foundation. A significant portion of Egmont’s earnings gets donated to children charities in Denmark and Norway, with the plan to hopefully extend this to Sweden soon. The rest

of our profits are reinvested into the Egmont group rather than producing value for some shareholders,” Windelen says. He adds: “We are commercially driven, because our commercial success is the basis for our charity work, and this also forms the basis for the growth of our own business. This is a completely different approach to other games investors.” Success through active support Nordisk Games have invested in well-established studios across Europe like Avalanche Studios Group, Star Stable Entertainment, MercurySteam and Supermassive Games. They want to take an active role in helping these studios to grow as a business and help improve their chances of creating successful games and games IP. “There is no such thing as a secret sauce where you jump from one success to the next. But you can add research, know-how, best practices, and authenticity to minimize the number of pitfalls,” Markus Windelen says. Support comes in the shape of individual collaboration plans and active work in the studios’ board. Leadership programs, data services and an ‘Executive Club’ alongside business development with platform holders and publishers are among the support services that Nordisk Games offer. Their latest initiative is the creation of a Games User Research Lab in Copenhagen, where partner companies can test new and existing game content. “Expansive Worlds just launched a new

Markus Windelen Partner and director of operations in Nordisk Games

Games as a Business 2021

DLC (Downloadable Content) for their very successful game ‘theHunter: Call of the Wild’, where the player can purchase a hunting dog. Before launch, it was heavily tested in our internal lab through multiple iterations, where users provided feedback to the developers. Expansive Worlds could fine-tune the DLC before it was launched. And it became one of their best DLC ever in terms of user reviews. I’m not saying that this is only because of the research lab, but I’m sure that putting the DLC through its paces in the research lab helped them make valuable product decisions based on data,” said Windelen. Nordisk Games is currently looking into similar shared labs to increase the studios’ ability to make decisions based on data, analytics and market research. “Game development is still 100 per cent driven by the developer, but we aim to offer infrastructure and additional insights they might not have considered,” says Windelen. Changing the industry Investing with a long-term view allows Nordisk Games to have ambitions on the studios’ behalf as well as the industry as a whole. For that reason, Nordisk Games is also the initiator of broader industry schemes, like ‘PlayCreateGreen’, a climate handbook for game companies, by game companies. “As fun and entertaining as games can be, all digital entertainment comes with a hefty climate footprint. By sharing best practices we can learn to reduce that, and we want to take responsibility for making that happen,” says Windelen. Similarly, Nordisk Games is also trying to steer the male-dominated industry towards greater diversity. There is a long way to go yet, and Nordisk Games is not an exception from the current imbalance. But they want to be involved and active in this field, as they believe it’s the right direction for the industry to go in, as well as a sensible business decision. “The world is diverse and the game industry is producing entertainment for a diverse audience. In order to be good at that, we need to ensure that the creators who are coming up with ideas come from a diverse background as well. It’s a selfish mission with a good purpose; You should be clever enough to embrace it in order to do good business,” says Windelen.

Predicting the Next Smash Hit It is incredibly hard - borderline impossible actually - to predict the next smash hit in the games industry. Yet with that in mind, Nordisk Games have 3 pieces of advice for anyone thinking of investing in games: Look at the studio - not “just” the game: When investing, Nordisk Games is not solely looking at the games or existing IP the studio has already launched. They look at the studio, the team behind it and their culture. The games are an output of the inner workings, vision and ambition of the studio. Success is built by people: In contrast to other tech startups, it can be very hard to rely on financial KPIs and previous traction in the games industry. For that reason, Nordisk Games looks instead at the key people in the studio. Who are the founders and the executive team? What are their ambitions? What did they do in the past - not in terms of degrees, but what funky development-mistakes did they make and what lessons did they learn from them? If they did make some mistakes and

survived, it’s a great indicator they won’t make them again. If that is combined with a good understanding of creative processes, production methodology, the ecosystem of game making, publishing and market, then the right ingredients are all there. The 80-20 Rule: Even for seasoned games investors, it’s impossible to strike gold with every game. The success rate in game development is small. Actually, most games don’t sell that well. For every one outlier success you see, 99 product releases fail. In general, the 80-20 rule applies - 20% of the new product releases are successful and need to carry the 80% that aren’t. Successful outliers are born by thinking completely out-of-the-box. That has to come from thoroughly passionate and creatively inspired developers, combined with similarly crazy financial investors, who trust the creative vision of the development team and actively support it. Only then will you get a chance at an outlier effect.

he story of the game developer BetaDwarf is the quintessential startup fairytale. A band of game developers illegally moves into an unused space at a university, where they live until they are kicked out. It takes a Kickstarter campaign and a huge loan for the developers to finish their game. Fortunately, they lived happily ever after, as the game ‘Forced’ was a commercial success. The band of game developers succeeded without any help from investors. “To be honest, we never considered pursuing investments. Simply because we didn’t know it was a possibility. Back then the game developers figured it out themselves or went to a publisher. Nobody had investors,” says Steffen Kabbelgaard, CEO og co-founder of BetaDwarf. Today, the company is working on its third game, has 40 employees, and landed two investment rounds led by London Venture Partners and Makers Fund totalling DKK 49 million. “A lot has happened in the industry in the past 10 years. It was quite difficult raising money 10 years ago, but after small teams began creating big businesses, venture funds started paying attention,” Kabbelgaard says, and adds that BetaDwarf’s investments are dedicated to growth: “We have been profitable, but with the investors on board we are scaling up and

taking greater risks - and betting that our new thing will be huge.” Investments are booming - but not for early-stage studios Sale tags with price points in the millions and listings on the stock exchange are no longer rarities in the gaming industry. Most recently, Roblox went public at a valuation of just over DKK 230 billion. (38 billion USD). It comes as no surprise then, that 2020 set a new record when it comes to investments in the gaming industry. According to GamesIndustry, 13.2 billion USD was invested globally (just over 80 billion DKK) - a massive increase of 77 per cent compared to 2019. The vast majority of the investments are allocated to game studios that already have one or more successful games on the market. This way, the biggest risk - the first game - is taken out of the equation for the investors. This was also the experience at BetaDwarf, who was not contacted by investors until after their first game had become a success. The founder believes that it can be significantly harder to attract investors at an early stage. “The big challenge is that investors only invest money at an early stage if the person behind has a solid background and some experience. People coming out of

Steffen Kabbelgaard CEO og co-founder of BetaDwarf

Games as a Business 2021

Riot, Epic, and so on can easily raise money. But if you come straight from university, and this is your very first game, then the biggest hurdle is to build trust without experience,” Kabbelgaard says. The Danish food chain is broken “The lack of funding for new game developers is a continuous challenge. The market is growing, and the quantity of amazing, Danish successes is palpable, but for some reason, there are not many dedicated gaming investors in Denmark,” says Jesper Krogh Kristensen, Games Consultant at Vision Denmark, a business cluster for the visual industries in Denmark. Where other tech startups are rapidly developing a primitive version of their software that they can begin selling, games are expense-heavy from the get-go. The game must be more or less finished before it can be sold, and that can take years, which is why an early investment can be crucial.

The innovation environment Capnova had a long-term focus and provided many of the early investments that helped new studios make their first game. Among the major successes are Sybo, Triband, Playdead, and, the latest, Ghostship. Yet a political decision a few years ago saw a pooling of the state’s startup investments into Innovationsfonden and Vækstfonden, which also spelled the end for Capnova. And that has left a gap in the investor chain. “When the game studios reach a certain size, the funding problem is not that significant. If the studio has already published its first success, it can obtain foreign investments. But the food chain is currently broken; smart capital, like that from Capnova, is missing. The intention was that Innovationsfonden and Vækstfonden should pick up the slack, but their investment strategies have been unclear, which has led to significantly fewer investments in game studios, when compared to Capnova,” Kristensen says.

Copenhagen MatchUp •

Copenhagen MatchUp is an event targeted at the gaming industry, where national and international investors and publishers get the chance to meet the Danish gaming industry in a matchmaking format. The event is organised by Vision Denmark and the Danish Producer’s Association.

•

For several years, the event has attracted a large number of foreign investors to Denmark, with several investments in Danish game developers as a result. Vision Denmark hopes more private investors in Denmark will find interest in the industry and its’ opportunities.

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Copenhagen MatchUp 2021 has 80 participating games companies from Denmark and 85 investors and publishers.

Loot Spawn: More relevant to investors than ever After 20 years in the industry, including a stint as the VP General Manager and CEO for Swedish game developer Dice and with several stints at major game developer Electronic Arts, Swedish gaming veteran Karl Magnus Troedsson decided to become a business angel five years ago.

With the fund Loot Spawn, he is focused solely on the gaming industry. “I’m not an investment banker - I’m a game-maker turned investor. That’s important to point out,” he says with a laugh, after listing his favorite games and movies from the 80s and 90s. So far, he has actively invested in 14 companies - including Danish ‘Framebunker’ and ‘Geometric Interactive’ which he still follows as closely as he can. But Troedsson understands why it can be difficult for investors from other industries to assess risk and ultimately invest in gaming companies. “Tech-startups try to solve a problem: We are a better bank for young people, we are last-mile delivery, whatever their value proposition is. They are trying to make our lives better, faster, and smarter. That’s not what game developers are doing. We entertain. We are much more attuned to Hollywood. And if you don’t know games, which is a very hit-driven industry, how do you predict a hit?” Troedsson asks. He believes that game developers are often more passionate about their games than a tech startup is about delivering pizzas efficiently. It is more about business, while for game developers it is a life goal to produce games.

Games as a Business 2021

“In the games industry – if one dares to say this — we have had a bad reputation for not being a real industry. Some of that can be tied back to exactly this: How can this be a real job when you are starving for the art?” Troedsson says. Although there is still a long way to go, he believes that the industry has progressed a long way towards becoming more business-oriented. At the same time, demand for games has exploded - from both consumers and tech giants, who are ready to pay the price - whatever it may be. This makes the market increasingly interesting as an investor. “There are a lot of exit scenarios for the game studios. Here’s just one scenario: There is almost a platform war going on. All the big companies see subscription as the future, so everyone is building a platform: The Netflix of games. In that kind of climate, game companies can be successful with a medium hit, because it gets picked up by the platform holders. And that means less risk in my opinion,” Troedsson says. BetaDwarf: An investor keeps the company afloat From the game developers’ point of view, Kabbelgaard from BetaDwarf also believes that the possibility of getting an investor involved today is better than ever before.

For his game studio, it has been the right decision to partner with big business in the form of a couple of venture funds. “Getting an investor involved creates completely different opportunities. It has resulted in peace of mind when it comes to planning for the future. Before that, it was like this: We will run out of money in six months. It is just survival, and that makes it hard to bet

on something, that can really make a difference,” he says. BetaDwarf has not only contributed with capital, but also with business development. “We are insanely excited about investors now. It solves the problem of capital, but it has clearly also accelerated our learning curve and networking skills,” Kabbelgaard says.

Sponsored: This articles is made in cooperation with CineClash

CineClash: Cinemas will play host to a new gaming format Hollywood blockbusters will soon be replaced with a new game format, which the Danish company Cinemataztic is currently developing in collaboration with the game studio Bolverk. Their ambition is for a hundred or more players to compete against one another at the same time, with tournaments played out on the big screen.

f you’ve been to the cinema within the last eight years, there’s a high chance you will have come across one of the interactive BioSpil games from Cinemataztic: a seven-minute, interactive advert on the screen, which encourages cinema-goers to compete against each other for prizes of fizzy drinks or popcorn. This interactive format has been so successful that it has now been exported to a large number of countries. Cinemataztic is now preparing to introduce a new game format targeted at the cinema, in collaboration with the game studio Bolverk. They call this format CineClash, which for the first time ever will place the game as the main attraction for cinema-goers. “We have succeeded in digitizing the commercials, and now we are looking at a digital transformation of the cinema medium itself. Cinemas have long demanded a format aimed at GenZ, and CineClash is a really good match that will be able to use everything that the cinemas are world champions in - audio, image and light - to create a completely unique gaming experience,” says Mikkel Hagedorn, CEO of Cinemataztic. A brand new social gaming format Today, games live on apps, consoles and computers. The CineClash format will seek to redefine that, by introducing an entirely new channel, giving gaming companies the opportunity to develop and distribute games tailor-made for the big screen, while the cinemas themselves will have the opportunity to host live, multiplayer tournaments at their venue.

Using their smartphone as the controller, the format will allow up to 100 players to compete against each other simultaneously, from the comfort of their cinema seats. It’s a concept that presents a new challenge for developers, as well as offering new opportunities. The fact that each game takes place within the same physical setting means that new dynamics can find their way into the games such as one section of the particpants at the cinema competing against the other. “It is really exciting to help create a completely new game format and distribution channel for the gaming industry, and at the same time it is a huge challenge to make a game that can be played by so many players at once,” Bo Bennekov, CEO of Bolverk games, says.

Global ambitions Bolverk Games is developing the first game in the CineClash format, and it won’t be long until the first version of the game will be tested in a real cinema. “We want to create a new gaming genre, where young people are physically together when they play, giving a completely new kind of gaming experience. At the same time, we want CineClash to become a new income stream for both cinemas and game developers,” Hagedorn says. CineClash will be distributed through the BioSpil platform, which is already out in Finland, Norway, Estonia, Germany, Spain and Australia. Cinemataztic is currently looking for both investors and partners who can help make this new game format a global success.

Games as a Business 2021

6 Successes from The Danish Games Industry Newcomers like Ghost Ship Games, Triband, Tactile Games, Funday Factory, and Rokoko are currently showing what rapid growth looks like in the Danish games industry. However, successful games companies are nothing new in a Danish context. With the help from Vision Denmark we’ve collected seven of the biggest successes in the diverse industry for you right here:

IO-Interactive - The First Triple-A Maker

Unity - An Office Suite for Developers

GameAnalytics - Business Drive for the Developers

Founded: 1998 Number of employees: 200

Founded: 2004 Number of employees: 3400

Founded: 2010 Number of employees: 40

Just before the millennium, a seven-man development team joined forces with film studio Nordisk Film to launch IO Interactive: The first Danish developer of so-called Tripple A games with huge development and marketing budgets. Their first game called “Hitman: Codename 47” was an immediate success, and for more than 20 years the Hitman franchise has been a household name in the games industry. The studio has developed other games as well, but never as successful as Hitman.

Unity started as a games studio, which launched its first game called GooBall back in 2005. The game was a commercial failure, but the founders saw potential in the software they had developed in order to create the game.

If you run a website, you’re probably using Google Analytics or a similar tool to track and understand your users’ behaviour. Up until 2010, game developers didn’t have this opportunity to the same extent, but the startup GameAnalytics set out to change that.

Over the years, ownership of the studio has moved back and forth, but the bald hitman is still doing well. So far, he has appeared in eight games as well as a Hollywood movie based on the game franchise.

Steelseries - Gear for the Gamers

For that reason, they changed the company’s focus and started building a software suite aimed at game developers, which should help democratize game development. Today, they have succeeded to such an extent that their business model has become de facto standard in the industry, and Unity is the go-to tool for the majority of game developers. With a recent public offering valuing Unity at 26 billion dollars it’s one of the market leaders globally.

Playdead - The Speilberg of Indie Games

With the companies real-time monitor, they allow game developers to track users, sessions and playtime. Knowledge that allows developers to optimize the game experience and ultimately improve monetization. GameAnalytics was sold to Mobvista for a “three digit million amount” in 2015 and moved its headquarters to London.

SYBO/Kiloo - The Mobile Smash Hit

Founded: 2001 Number of employees: 330

Founded: 2006 Number of employees: 50

Founded: 2010/2000 Number of employees: 200

When Steelseries was founded back in 2001, computer gear wasn’t really aimed at gamers. Yet, Jacob Wolff-Petersen - an avid entrepreneur and Counter-Strike player - saw potential in the niche.

The studio Playdead was founded in 2006, but it took four years to finish their first title Limbo. However, when the small team launched their game, the gritty puzzle platformer was an instant indie hit. With millions of copies sold, the art-driven game developed by just eight employees and a handful of freelancers proved very viably as a business. As such, they have been part of paving the way for a new generation of smaller studios to become profitable almost overnight.

The game studio Kiloo has developed games since 2000, but when they teamed up with the younger studio Sybo back in 2012 and released the mobile game Subway Surfers, they struck gold.

Even though it took another seven years to finish their next game, Inside, the hyper-polished follow-up has been equally successful to its predecessor. Which has cemented Playdead as one of the world premium indie studios.

Both studios has released new titles since Subway Surfers without the same success. Sybo and Kiloo have however been instrumental in fertilizing the Danish games ecosystem for a new, successful generation to thrive.

The first product was a glass mouse pad called Icemat, which should help the pros perform better in competitive games. Since then, Steelseries has added a wealth of gaming equipment - but always aimed at the gamers. By catering exclusively to gamers, Steelseries has grown exponentially alongside the esports scene, which means the companies revenues has reached the billion kroner mark.

Since then, the game has been downloaded more than 3 billion times making it the most downloaded game ever. Almost 10 years in, the mobile game still shows its longevity - making both studios wildly profitable along the way.

How a 19-year-old entrepreneur created Denmark’s first major hit with commercial computer games By pure chance, Keld Jensen and the company Kele Line ended up as Denmark’s first major hit with commercial computer games in the mid-80s. The ambitions were big, but the gamble was to end with a bang. Written by Sebastian Kjær

s a mere 16-year-old, Keld Jensen ventured into the infant IT industry for the first time in the mid-80s. Together with an older companion, he began parallel importing home computers from the UK through the company Kele Line. However, the company wouldn’t gain national recognition until a few years later, when his business partner Leo had stepped down, and Keld changed direction to focus on developing the first commercial game studio in Denmark. “We were one of the first - if not the first - to seriously try to make computer games in Denmark. I had looked a lot at the UK, which was far ahead of us, and thought that we can damn well do that in Denmark as well. When you are 19 years old, common sense is not so

common, so we started doing it without knowing anything about the industry,” says Keld Jensen today with a laugh. The start-up capital came from his mother, who guaranteed a loan of 300,000 kroner. Next came a large office, which was rented in Slangerup, to the north of Copenhagen, where Keld hails from, and young programmers and designers were hired to start developing the games. “It was actually started on a young boy’s dream of making computer games. Looking back, it was incredibly naive, but also a bit amazing. And we actually did really well. Until we closed,” Keld Jensen says. The first gaming rockstars With the location in place, the young team threw itself at their great ambition:

Games as a Business 2021

Keld Jensen

As the founder of Kele Line, Keld Jensen helped make the first large, commercial venture into computer games a reality in Denmark. The studio managed to release four games before closing with a bang after just one and a half years. Since 1988, Keld Jensen has not been involved in computer games. However, he remained in the IT industry for a number of years - including at IBM and Toshiba before going all-in on a career as a Negotiation Consultant. Today, his business helps both organizations and governments with negotiation. He is also a lecturer on the subject, a professor at universities in Denmark, the USA, Belgium and the Baltics and the author of 24 books on negotiation. Most recently, Keld has been included in the prestigious Global Gurus Top 30 and has received recognition of his work with a number of awards in Denmark and internationally.

to develop games in Denmark on a commercial scale. Even though it was still in the early days of computers in mid-1986, it was already a challenge to develop games for several platforms. Back then, they were just called Amiga, Amstrad and Commodore instead of Xbox, Playstation and PC. “We were teams of 2-3 men - or boys really - who spent 4-6 months developing each game. We were between 16-19-years-old, all about the same age as me, and we just had fun doing it. No one had a formal education and many still went to school at the same time. But the programmers were brilliant, in fact, I would say that they were of international quality,” Keld Jensen says. During 1986 and 1987, the team succeeded in publishing four games from Denmark’s first commercial game studio - one of which had music produced by the world-renowned electronic artist Jean-Michel Jarre. Although this didn’t make the studio an overnight global success, it did garner significant interest from the public, and game development became a national affair, which found its way to the front pages of the major morning newspapers. “I actually think the product we delivered was okay. It was far from the best, but also far from the worst. It was certainly good enough to sell. And we

actually became big names in Denmark and the UK, and I think they the Danish had a national feeling about our success because we wanted to compete with the British,” Keld Jensen remembers.

was something that could be exported. But if they had said yes to it, it could have meant that we had one of the world’s largest software houses in Denmark today.”

You can’t export software!? The UK were first-movers when it came to computer games, and when the newly-founded Kele Line didn’t have the strength to distribute its games, they found a publisher there. In these pre-internet days, this partner had physical copies of the games sent out on floppy disks to gamers all over Europe. And for Kele Line, it was a great model, right up until the distributor went bankrupt. “They owed us a fortune when they went bankrupt. So we had to close, as a result of that. I really think we were on our way to becoming something big if we had not fallen over the doorstep,” Keld Jensen says. Shortly before the bankruptcy, the young entrepreneur had been foresighted enough to visit the Export Credit Council to secure his exports. But they were not ready for software at the time. “They said; you can’t export software - it has to be machines or something physical,” Keld Jensen remembers, laughing, before he continues: “I still find it funny today, that at the time people did not think that software

The bankrupt beacon Today, Keld Jensen laughs at the experiences he had 35 years ago. But at the time, there was not much fun to be had in the aftermath of the bankruptcy. Keld Jensen was declared the villain by the media. And while it was true that several of the employees did not get their pay, the story that he himself had run off with the money was not true. Instead of ending up with his pockets full, he was forced to move back into the childhood home and began repaying a large debt. Although the gaming adventure came with a big bill, and Keld Jensen has never since touched computer games professionally, he does not regret the journey. “Had the agreement with the distributor worked, I think it could have become a big deal. Was it hard? Yes! Was it hard afterwards? Yes! But it was super cool to be part of. And I think, we became a platform for others to believe that games could actually be done well in Denmark. We were probably the lighthouse that helped to create a lot of attention around computer games,” Keld Jensen says.

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Games as a Business 2021