The document discusses how digital games are drivers of business and innovation in Europe. It summarizes that the digital games industry employs over 17,000 professionals across 12 European countries. Digital games are highlighted as an economic, cultural, and innovation driver. They spur technological advances in areas like hardware, networking, and new business models. The games industry has experienced a shift to digital distribution and online games. However, game development remains risky with only 5% of games profitable. Political support is needed to help small game studios scale and access digital markets through tools, standards, and flexible regulation.

1. DIGITAL GAMES
drivers of business and innovation
Future Internet Enterprise Systems (FInES) Cluster Meeting
Brussels, 15.3.2012
Jari-Pekka Kaleva, project manager / policy analyst, EGDF
www.egdf.eu | jari-pekka.kaleva@egdf.eu

2. THROUGH more than in that employ over
EGDF 17000
YOU CAN
600 12
game studios European game industry
REACH countries professionals
UK, AT, DE, FR, DK, FI, NO, BE, NL, LU, ES, IT
Policy
EGDF IS A development Dissemination Elaboration
TRADE- participates proc- disseminates elaborates game
ASSOCIATION esses developing the best developers’
policy recommen- practices, new mutual positions
(SME) THAT dations that sup- standards, r&d, (technology,
FOCUSES ON port game devel- new tools etc. content)
opers
Jari-Pekka Kaleva
Project manager / Policy analyst
www.egdf.eu / jari-pekka.kaleva@egdf.eu

3. Digital games are the key for
European consumer Internet of the future
spending on games (€m)
• Game industry recently experienced digital
shift => media distribution went online
• New Opportunity for Europe => game
markets are not any more controlled by non-
European players
• Paradigms of digital growth are significantly
different than in the market space of non-
virtual goods => Games link networks and
users
• concept of leverage is a myth => Small,
content driven tech companies can provide
relevant solutions and can grow very quickly
• But still game development is risky, only
5% of the games are profitable and highly
Source: © IHS Screen Digest, 2011 supported in other world regions
Jari-Pekka Kaleva
Project manager / Policy analyst
www.egdf.eu / jari-pekka.kaleva@egdf.eu

4. Its possible: Size of leading online games
studios in Europe
Bigpoint Gameforge Ankama Jagex Sulake
(DE) (DE) (FR) (GB) (FI)
Founded 2001 2003 2001 2001 2000
Employees about about 450 about 460 about about
700 375 270
Turnover € 140 Over 100 40 million 40 million 56,2
million million (2010) (2010) million
(2010) (2009) (2010)
Registered 194 200 million 30 million 170 210
users million million million
Source: ICO Partners 2011
Jari-Pekka Kaleva
Project manager / Policy analyst
www.egdf.eu / jari-pekka.kaleva@egdf.eu

5. Digital games are
– an economic driver
The video games market is the most
dynamic entertainment market with a
huge growth potential and a natural
ability to overcome cultural and linguistic
barriers
– a cultural driver
Video games are played by young and
old, male and female alike, and are now
recognized as cultural
– an innovation driver
Video games engender new business
models, create innovative content and
germinate unique services that are
driving groundbreaking technological
discoveries leading the way for many
other sectors
Jari-Pekka Kaleva
Project manager / Policy analyst
www.egdf.eu / jari-pekka.kaleva@egdf.eu

6. Digital games are drivers of
– technological innovation
Computer hardware (e.g. microchips),
network technology, artificial
intelligence, augmented reality etc.
– content and service innovation
New story telling methods, new co-
creation methods, machine translation
etc.
– business innovation
New business models (e.g. “free-to
play”), virtual currencies, digital
payment methods, crowd funding and
crowd investment.
=> Games have a strong spill-over
effect on hardware, networks, the
business-models and interface of
digital services (gamificatition)
Jari-Pekka Kaleva
Project manager / Policy analyst
www.egdf.eu / jari-pekka.kaleva@egdf.eu

7. viral
innovation
model
Jari-Pekka Kaleva
Project manager / Policy analyst
www.egdf.eu / jari-pekka.kaleva@egdf.eu

8. Minecraft
- 23 200 000 downloads
- 5 100 000 paid downloads
- more than 30 000 000€
revenue since 2009
Jari-Pekka Kaleva
Project manager / Policy analyst
www.egdf.eu / jari-pekka.kaleva@egdf.eu

9. Iron Sky
- 1 200 000€ crowd funding/invesment
- 6 300 000€ traditional funding
Jari-Pekka Kaleva
Project manager / Policy analyst
www.egdf.eu / jari-pekka.kaleva@egdf.eu

10. • So we need to support
Consumer spending on – viral innovation by
entertainment media (€m) • tools for user and/or procedural
created content as well as for
user-developer communciaton
(e.g. CNG project)
• Middleware standards
• Automated tools for creating
content (Procedural content
creation)
– access to digital markets by
• Internet technologies for game
promotion like data mining,
reference and web publicity
technologies
• Content driven approaches to
network technology
• Compilers for making
multiplatform games
Source: • Multiplatform delivery
© IHS Screen Digest, 2011
Jari-Pekka Kaleva
Project manager / Policy analyst
www.egdf.eu / jari-pekka.kaleva@egdf.eu

11. • And we need focus our efforts to face technical
challenges:
Networked distribution technologies
Internet of things
Artificial Intelligence Service robotics
High‐Performance Computing
Scalability
Mobile personal computers Digital cinema technologies
Trust, privacy, integrity, security, identification, accountability, IP, copyright
etcetera
=> All these will have an effect on business models!
Jari-Pekka Kaleva
Project manager / Policy analyst
www.egdf.eu / jari-pekka.kaleva@egdf.eu

12. • political support is essential
– Support systems need to – Regulation needs to be flexible
updated for the digital era • Europe must not unintentionally
• real innovations have to be give advantage to competing
identified behind the formal quality digital economies by over- or
of applications, funding structures under-regulating its own markets
have to be simplified; • Net-neutrality is essential for
• Games as a specific ‘model’ digital service markets
category; • No forced standards for payment
• Support for many small projects systems, the field must be kept
instead of few big ones; a open for innovation
threshold, for example, by placing
the maximum EU contribution per
project to about five million Euro;
• a SME-quota, at least 50% of the
funding has to go to SMEs;
• No strings like specific test-beds
(PPP), algorithms or libraries
Jari-Pekka Kaleva
Project manager / Policy analyst
www.egdf.eu / jari-pekka.kaleva@egdf.eu

13. THANK YOU
For any further questions please do not hesitate to
sent an email to jari‐pekka.kaleva@egdf.eu