The Romanian gaming industry reached EUR 200 million last year and it still growing. As the pandemic crisis unveiled, gaming companies around the world found that people turn to entertainment during the time spent in homes and tend to spend more on games. Business Review talked to Catalin Butnariu, Head of Corporate Development at Amber, the biggest independent gaming company in Romania, to find out more about the industry.
Business Review: The isolation period has been beneficial for gaming, with many finding games a good way to spend time. How did this feel for those inside the gaming industry?
Catalin Butnariu: In general, and worldwide, large publishers have suffered the least. The games that had very high sales during this period are generally the games best known to the public. Smaller development studios were more affected. One of their main sources of contacts and possible investments was events, fairs and conferences, which helped them access business deals and new partners and investors for their games.
Was Amber’s activity affected by the Work-from-Home system?
The entire Amber team has been working from home since March and things will not change until conditions become safe for returning to the office. We have successfully adapted the work processes where necessary, the relationship with our partners is very good, we have delivered quality work throughout this period and all our business lines (Full Game Development, Live Operations, Design, Art, QA, etc. ) continued to grow. In terms of developing original games, the Scorpius team, the studio we merged with earlier this year, is working on a new concept for PCs and consoles.
Amber recently opened a studio in Mexico. How did the communication worked during the restrictions and is it working now (since Mexico is only now hit badly by the coronavirus spread)?
As in all places where we choose to open a studio, we make sure that there we find the right people to coordinate local activities. Unfortunately, our colleagues in Guadalajara could not enjoy the new headquarters too much because, like all of us, they had to work from home. The opening in Mexico proved to be a good move, it allowed us to continue to grow the workforce at an accelerated pace, we have already reached a team of over 50 professionals covering all production disciplines. From the point of view of collaboration between studios, the team from Mexico works together with the teams from Bucharest on two mobile games of casual type, having responsibilities in creating graphic elements, but also on programming and testing.
What about the offices and studios in Romania?
As in Mexico, things are working at normal capacity. Moreover, for all our offices, we are looking for talent. Because we have started to dedicate ourselves to development on PCs and consoles, we are looking for Console Game Testers, Art Directors, PC / Console Game Producers or PC / Console Programmers, among many other open positions. The studio in Botosani is looking for junior testers and in Mexico we need specialists in the area of 2D art, 3D animation and production.
How will the turnover figures look like (revenue, profit, etc.) this year? Are you affected in any way by COVID-19?
Amber had a consistent growth of the business in 2019 and it will continue in an accelerated way this year, with over 30 percent. In 2019, the turnover amounted to RON 57.85 million (USD 13.65 million – an 80 percent increase compared to 2018) and the company’s profit margin was 12 percent. The engine of this growth was the focus on full game development services, revenues in this segment being 300 percent higher than the previous year.
From which part of the world do you have the most customers (given that China is now no. 1 in the world)?
A significant part of our customers (and, implicitly, revenues) comes from North America (a market similar in size to China) and Western Europe.
How is the “fight” between console or PC games versus smartphone evolving and how do you think it will evolve in the future?
Mobile gaming will reaffirm in 2020 its position as an industry-leading platform and locomotive for its growth. According to an annual study by Newzoo, the gaming market will reach almost USD 160 billion in 2020 (more than the film and music industry combined), and half of this market (48 percent, to be precise) will be represented by mobile gaming. In the spring, a series of sales records were broken, culminating in the reporting of 1.2 billion mobile game downloads in the second week of April. Users downloaded 30 percent more mobile games in April than in January.
For the future, I believe that the mobile market will continue to grow. On consoles, in the short and medium term we will continue to grow, fueled by the new generation of hardware consoles. In the longer term it becomes more difficult to predict. Maybe virtual and augmented reality will finally catch on, which will fuel PC / console gaming. In any case, what matters in the end is the systematic growth of the gaming industry, which shows no signs of slowing down, even in difficult times, like the one we are in.
As president of the Association of Video Game Developers in Romania, how important is the gaming industry for our country and how important could it become?
The video game development industry in Romania is currently at a very important point. It operates in the industry over 100 studios where over 6,000 professionals work. Private formal education initiatives or courses taught by higher education institutions (masters or colleges) are increasingly active in recent years, trying to provide young people with a basis for a potential career in this industry.
These and many other reasons give us hope that the next 5 years in which the industry will demonstrate its potential, not only in terms of economic value (local industry generated a turnover of over USD 200 million last year) but also creative, to produces original titles of great international impact.
But for that to happen, it also needs state support. The country we often refer to is Poland, which has a real country brand, The Witcher 3, a game that has enjoyed enormous international success and, to give a newer example, the game This War of Mine will be introduced from the next school year in the high school curriculum. All these successes have also happened with the help of the state, which offers various schemes to help and stimulate the sector. Last but not least, investors should focus more and more on this sector, and it is gratifying to see that in Romania we are starting to see interest from them, lately.