The Development of the Swedish Game Industry - The Video Game Industry: Formation, Present State, and Future - page 131

services of companies located anywhere globally—in Sweden, Ireland, the
U.S. or China. Phrased in another way, it becomes harder to clearly say
which games are developed by which company and in which country.
There are also some forces that work against a market-coordinated pro-
duction structure. One such force is the risk of losing control over techno-
logical development. Companies that work with really advanced products
can benefi t from not using middleware and depending on other companies
(Christensen and Raynor 2003).
DISCUSSION
The Swedish game developing industry has to a large degree followed a
classic industry life cycle (Porter 1980, 157-158). A pre-phase or develop-
ment phase started in the 1950s and lasted up until the end of the 1980s.
Games were created, but no real commercial activity was possible in the
Swedish context. An introduction phase lasted from the end of the 1980s
until the middle of the 1990s; a small number of companies ventured into
game developing and a Swedish industry formed. The industry entered a
growth phase from the second part of the 1990s, and the number of com-
panies increased rapidly. However, the growth has not been linear and the
industry was hit by the economic downturns around 2001 and 2008.
The Swedish game developing industry was from the very beginning
part of an international production system. Swedish game developers
have since the 1980s turned to the European arena. First, individuals
went abroad looking for employment in British companies when no indus-
try had emerged in Sweden. Swedish companies later turned to publishers
in Great Britain, France and Germany to get funding and distribution for
their game projects. Over time a few developers got contracts with Amer-
ica and in recent years even with Japanese publishers. Foreign compa-
nies have also over time bought Swedish studios. Today a couple of game
studios have foreign owners. The two largest studios are today owned
by two of the largest publishers in the world, DICE by EA and Massive
Entertainment by Ubisoft.
The production is also becoming increasingly and intricately connected
with the international production system. Software components are bought
and parts of the production are outsourced to companies globally. One of
the large “Swedish” productions can be based on a franchise owned by a
French publisher, with American and Irish technology and with a portion
of the graphical content produced in India.
Around 1,150 employees work with game development, and the indus-
try yields revenues of about €115,000 to the Swedish economy. The game
development industry is today not a major economic force within Swedish
society. If treated as a single fi rm the game industry would be comparable
to a medium-size company.