The Development of the Swedish Game Industry - The Video Game Industry: Formation, Present State, and Future - page 132

The most striking aspect of the historic data collected from the Swedish
games developing industry is the lack of profi ts. The Swedish game indus-
try, as a whole, has not yielded any substantial profi ts and instead produced
large losses. These losses are not from a small number of companies; a large
proportion of the game companies have negative results and only a few
have ever shown any substantial profi ts.
In the case of Sweden, it seems like many game studios have histori-
cally been vulnerable in their relationship with the publishers. The Swedish
companies are relatively small and are operating in the international arena
with large multinational publishers. These international publishers have
information and resources far beyond that of any of the developers. The
fi nancial power means that most Swedish companies in the end will have
to give up the rights to the IPs and ultimately the control over the game
development. By owning the rights to the game the publishers control the
production and can choose to terminate the contract with the game devel-
opment studio. This can be problematic for the game developers especially
because they seem to be highly sensitive to changes. Many developing com-
panies do not seem to have any high degree of fi nancial stability, so losing
one contract can quickly lead to bankruptcy.
The low level of profi ts is in contrast to the media discourse surrounding
the game industry in Sweden. The industry has been portrayed as particu-
larly successful. These claims seem to be based on little evidence, and it
seems that the desire to believe in the industry has created somewhat of a
myth surrounding the “Swedish game wonder”.
To answer the question in the title of this chapter one must look past
media and avoid being blinded by the obvious success stories. The under-
standing of the game industry can benefi t from a more eclectic and dialectic
perspective. By looking at the industry from both the macro- and micro-
perspective a more complex picture seems to arise in the Swedish case.
From an economic macro-perspective this is a rather problematic indus-
try. A lot of capital, grants, employees, educations and other resources have
been allocated into game companies that have consequently not been able
to return any profi ts. From such a perspective it would be more preferable to
support a more robust and lucrative industry. By adding the fact that large
amounts of work often are put into game production (some companies rely
on or demand unpaid overtime; see Sandqvist, 170; Dyer-Witheford and de
Peuter 2009, 35-36), one must even wonder if game development is a low-
productive industry.
From a micro-perspective it is easy to fi nd true success stories. Some
of the game companies have developed large international game titles and
a few companies have had some economic success. Simultaneously, many
companies have tried, failed and started up again, and along the way mil-
lions of euros have disappeared. Investors, students and other individuals
thinking about entering the game industry should know that it is a risky
business and the chance of economic success is very small.