Irish video gaming industry offers major possibilities

A measure of the growth possibilities offered by the video games industry in Ireland was underlined in last week’s major acquisition by Dublin headquartered Keyword Studios of US-based VMC Consulting for $66m (€57m).

It follows a number of smaller takeovers earlier this year by the Leopardstown-based company, which recently raised approximately €85m through a 10% share issuance.

Founded in 1998, the company started out providing spoken-word audio services for game producers, but has expanded significantly over the years through a mix of organic growth and acquisition, and is now listed in London.

Working with many of industry’s major players — EA Sports, Konami and Ubisoft — Keyword’s latest acquisition makes the firm one of the biggest players in its field.

“While this fast-tracks Keyword to No 1 in functional testing from No 5, this deal also brings with it the company’s biggest integration lift to date,” says Davy analyst Joseph Quinn.

“Outsourcing within the $100bn-plus video game industry is growing, and developers are increasingly turning to outsourcing partners to achieve faster content delivery, driven by the pace of mobile and online game development. Keywords Studios, the largest provider of outsourced technical services to the industry, is the leading consolidator within this space.”

Keywords Studios have also been shortlisted in the Deloitte Technology Fast 50 Programme 2017. The company has studios in London, Barcelona, Milan, Rome, Tokyo, Singapore, Shanghai, New Delhi, Montreal, Seattle, Los Angeles and Rio de Janeiro, employing over 1,500.

“The government needs to realise video games are a serious business, and help prevent a brain drain by creating work for Irish graduates in the arts and tech and keep them at home. Ireland has a real chance to take advantage of this burgeoning business.

As it stands, there is no state funding for video games - an industry that seems like a perfect fit for Ireland,” said Galway native and Trinity College classical music graduate, Eimear Noone, who is currently a California-based composer of music scores for iconic games like Overwatch and World of Warcraft.

Investment tax relief schemes in the game design and development sector are needed to encourage more entrepreneurship and the creation of Irish jobs, according to Dr Liam Noonan, game design and development degree lecturer at Limerick Institute of Technology.

“This industry is no different to the movie or TV sector as it is creative and dynamic and risk-taking. We need to encourage investment in this innovative space.”

Ireland’s suitability as a location for the industry has been significantly enhanced by the arrival of Romero Games to Galway from the US in 2015. Owned by John and Brenda Romero, the company is an established industry heavyweight, creator of legendary games like Doom, Dangerous Dave, Quake and Wizardry.

Dr Aphra Kerr, senior lecturer in sociology at Maynooth University and author of Global Gaming: Production in the Digital Game Industry, says the situation in Ireland now is very different to 15 years ago.

“We’re seeing people with experience in game development abroad come back home to develop, and we also have students coming out of game courses with much greater opportunities than before. The industry has serious competition for technology talent in Ireland, with huge multinationals like Google and Facebook.”

However, much needs to be done to compete with the likes of Norway, Finland and Sweden, who have a long tradition of mobile development, she says, rather than “lumping gaming in with all the other companies”.

As a pointer for the video game industry’s potential future dominance of the entertainment sector, in 2013 Grand Theft Auto V made $800m worldwide in its first 24 hours - more than any single game, film or record in history. In the same year, global video games sales were $70bn, versus cinema’s $35bn.