The Development of the Swedish Game Industry - The Video Game Industry: Formation, Present State, and Future - page 127

game was unique within the Swedish industry because DICE was able to
keep the IP rights to the game. Publishing companies will demand the intel-
lectual rights to games in exchange for the investment. Very few Swedish
companies have had the fi nancial capacity to keep the rights in negotiations
with publishers. Ultimately this means that they lose the possibility for high
revenues in the future if a franchise becomes successful.
Owning the Battlefi eld franchise, DICE seems to have been launched
into a series of events leading up to a takeover. The American publisher
Electronic Arts (EA) had published Battlefi eld 1942 and started pursuing
DICE and the franchise. DICE was publicly traded and EA bought 19 per
cent of the shares in 2003. This must have made a takeover almost inevi-
table; EA holding shares must have limited the possibilities for DICE to sign
new deals or even cooperate with other publishers. In 2004 EA put a bid on
all the remaining shares in the company. Many of the minority owners did
not accept the bid. The Swedish Shareholders' Association, which repre-
sents many shareholders, recommended not accepting the bid. 5 They stated
that DICE was worth much more than the of ered bid. In the end, EA only
got 68 per cent of the shares, far from the 90 per cent required by Swedish
law for a takeover, and was not able to buy out the minority owners. EA
then used a loophole in the Swedish fusion regulation. To force a fusion
between two companies only two-thirds of the shares were required. This
was one of a couple of cases in the beginning of 2000 that led to changes
in the Swedish law concerning corporate fusions (Ds 2007:35). DICE went
through a fusion with an EA subsidiary in Sweden and was from 2005
entirely owed by EA.
THE APP FACTORY AND FINANCIAL CRISIS, 2005-PRESENT
The composition of the Swedish game industry has changed in recent years.
The number of companies has steadily increased, and in 2009 there are
about 110 game developing companies. Additionally roughly forty game
developing companies are sole proprietorships or general partnerships. The
composition of companies have changed, there are four larger companies
with over one hundred employees (Digital Illusions, Starbreeze, Massive
Entertainment, Avalanche Studios), but the majority are today very small
and have only a few employees.
After the decline in 2003-2004, the industry bounced back quickly ( Fig-
ure 7.2). The number of people working in the industry started to increase
again at a very high rate. The industry continued on an exponential growth
trajectory. The industry grew from the lowest point in 2003 with just over
450 employees to nearly fi fteen hundred people in 2008. Old companies
absorbed people from the liquidated companies and many new companies
emerged. A clear example of this would be the provincial town of Umeå;
there a whole cluster of companies arose from the ruins of Daydream, the