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Home BUSINESSThe secret of Finnish game industry success
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Sun, 09 Mar, 2014 12:02:06 AM
FTimes-Xinhua Report, March 9
Girl plays Supercelll's Hay Day game on the iPad. Photo – Lehtikuva.
The father is struggling to defend his castle in Clash of Clans and the two girls are busy in managing their farms in Hay Day, while the mother is preparing dinner for them.
The life footage is caught from an ordinary Finnish family in a common Friday evening.
"We are also fans of Rovio's Angry Birds, the game we have been fond of since 2010," said Daniel, the father of the family. "Now our interests turned more to the Supercell games, which are novel and more attractive."
Although Finland is undergoing an economic recession, the Finnish game industry has witnessed dramatic growth in recent years and become phenomenally popular, both within the Nordic country and beyond the borders.
The secret behind the success has sparked curiosity among industrial observers.
Angry Bird. Press Release Photo.
Following the decline of Nokia, Finland again attracts worldwide attention for being home of such top downloaded Apps, such as Supercell's game products Clash of Clans and Hay Day, and Rovio's Angry Birds.
The Finnish game industry consists of more than 200 companies so far, according to Tekes, the Finnish Funding Agency for Technology and Innovation.
More than half of the game companies were established during last couple of years. A significant part of them develop mobile games, which are applicable to almost all existing platforms.
According to Neogames, the umbrella organization of the Finnish Game cluster, the annual growth rate in the Finnish game industry was 39.5 percent from 2004 to 2013, and the total value of the industry in 2013 was up to 2.21 billion euros (3 billion U.S. dollars).
"The global nature of game business and small size of the domestic market mean that the game industry is now a key component in Finland's exports and economy, with 90 percent of the production exported," said the organization.
Rovio has been the first Finnish company to succeed in building a global entertainment brand, and its revenue increased by nearly 100 times from 1.6 million euros in 2009 to 152.2 million euros in 2012.
Finnish game company Supercell CEO Ilkka Paananen and Creative Director Mikko Kodisoja. Photo – Lehtikuva.
Supercell made huge spikes in its revenue in 2013. A report by Finnish Broadcasting Company YLE said Supercell's revenue surged by over 860 percent from 78 million euros in 2012 to 672 million euros in 2013.
The two companies won the Internationalization Award of Finland, granted by Finnish President, respectively in 2012 and 2013, for their excellent accomplishments in developing internationalization of Finland.
The success of the Finnish game industry is grounded in high level education in the field. Neogames said that most of Finnish education institutions, including universities, universities of applied sciences and vocational colleges, offer game related education.
Finnish innovation system adds to the favorable environment for startups. In addition to a highly educated workforce, public research and development funding is readily available. The Finnish government spent more than 135 million euros on startups in 2012.
Both Rovio and Supercell have been financially supported by Tekes. "Supercell would not exist without Tekes," said Ilkka Paananen, CEO of Supercell. Tekes launched its "Skene - Games Refueled (2012-2015)" program specially for the game industry in 2012, aiming to make Finland a game and entertainment industry center of international significance.
By the end of 2015, the total funding will amount to 70 million euros, of which the share from Tekes is about 30 million euros.
Market orientation is also considered one of the key factors leading to the success of the Finnish game industry.
Its development has been closely in line with the trend of mobile communication technologies and strongly oriented to the future, and therefore meet the market demand well.
"The secret of success of Angry Birds is not from technological innovation, but from the design with the idea of 'returning to original simplicity', properly seizing the audience's psychological needs, and perfectly applying the product development and marketing elements, such as the unique 'interactive marketing'," Mikael Hed, CEO of Rovio, told Xinhua.
Rovio is considered a good example for other ambitious Finnish startups. As Paananen said, "The success of Rovio has been a huge source of inspiration for all Finnish gaming companies."
Some professionals even believed that the decline of Nokia brought opportunities to the growth of the game industry.
During the period when Nokia dominated the global mobile industry, there were a number of Finnish companies developing games specifically for the Nokia mobile phones. After the decline of the giant, many of Nokia's outgoing engineers started to reemploy themselves in developing mobile phone games. For example, the four founders of Turku
city-based game company Rumilus Design were all from Nokia.
After all the achievements, it is believed the emerging industry still has a range of potential in the future. Tekes predicts that the turnover of the Finnish game industry will multiply by 2020 if the growth continues at the same rate.
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