Very much so. The one constant in the games sector is evolution. New devices and new technologies appear on the market all the time. Those spur not only new types of content but new routes to market, new business models and entirely new audiences.
The entire games industry changed fundamentally in July 2008, because Apple launched the app store. All of a sudden, instead of it being necessary to lead a large team with millions of dollars up front, two guys in a back bedroom could sit together and knock a game out that would stand just as much chance of making money as something like Grand Theft Auto. The challenge that the games industry faces is that the industry as a whole is running to stay still. We are constantly pushed forward.
As Gregor White said, there are almost three distinct games industries. The one that everyone tends to think of is the console market: the X-Boxes, Playstations and Nintendos. However, that market accounts for a vanishingly small percentage of the industry in the UK and an even smaller percentage of the industry in Scotland. Most companies are now looking at the new opportunities and the new routes into market that have much lower barriers to entry and offer almost as many rewards, but it comes down to understanding the devices, the routes to market and the new business models.
The games industry is almost schizophrenic at the moment, because when games work they work incredibly well. For example, in the month that Grand Theft Auto V was launched last year, it made more money than the global music industry averages—it made $1 billion in three days. To date, it has made more money than “Avatar”, “Titanic” and the last two Harry Potter movies put together. Minecraft has revolutionised how families and children feel about video games, because there are no explosions, no head shots and no rescuing of princesses. It is instead about creativity; it is almost digital Lego.
However, those games are very much the exceptions, and a growing number of companies are trying to understand an increasingly saturated market and to find ways to innovate and to differentiate themselves from the hundreds of millions of creators that are out there in the world today.
The console market is almost a red herring—that is a given, in a way. According to our own research, about 94 per cent of the companies based in Scotland are doing casual, social, mobile and online games, which are still evolving incredibly rapidly. In 2012, Facebook was going to be the biggest platform for gaming in the world, but that did not happen, because one company managed to break it for everybody else.
For me, this comes back to a fundamental issue, which is that people get into the games industry—and, I suspect, into the rest of the creative industries—because they want to create. People get into the games industry because they want to make games. Running a company is a by-product of that. As a result, a number of people have succeeded despite not knowing a huge amount about business. They have made their business work over the past 10 or 15 years but are not innovating.
One of the things that we suffer from in comparison with Finland is a lack of business skills in the creative industries. We do not have too many people who are going out there saying, “You know what, maybe free to play is not an evil monster that will kill all games and mean that we die penniless and alone in a bus shelter.”
If that is the reality, how do we innovate? How do we make use of that and find ways to make it work for us? The international financiers and the venture capitalists are not coming into the United Kingdom as a whole and Scotland specifically because very few of the companies in my sector are investment ready, and they are very unlikely to be so in the near future.