When the great financial crisis of 2008 began to sweep through Europe, Spain was hit hard. Caught in a two-pronged assault of unsustainable GDP growth and the bursting housing bubble, Spain's economy tanked, forcing the country to take a €100 million loan from the European Stability Mechanism.
The problem had been brewing for some time. Since 2004, Spain had struggled against massive trade deficits, increasing debt and rising inflation, choking the growth of much of its industry. Indeed, the crisis is even perceived by some as ongoing, although many reckon it to have finally reaching a turning point last year. Nonetheless, against all of these odds, Spain's gaming industry has not only survived but flourished, establishing itself as one the emerging forces in newer platforms like mobile and VR. At the Gamelab Conference in Barcelona last month, we spoke to some of the local companies leading that growth to find out why.
"Since 2005, the year when we started Gamelab, the number of games companies in Spain has multiplied by a factor of 8x," said conference founder Ivan Fernández Lobo. "We are counting over 400 projects with an increasing quality and experience in the teams. The success of Commando's creator Pyro Studios in the 90s generated a first generation of talented game developers that today leads many of these projects.
"Studios like Digital Legends, Social Point and MercurySteam are taking the same role today, growing world class studios that will be key to build a mature and competitive sector in Spain, and attracting visibility and investments that will help not only their projects but also the rest of the smaller developments."
"Since 2005, the year when we started Gamelab, the number of games companies in Spain has multiplied by a factor of 8x"
Ivan Fernández Lobo
Gamelab has been a close partner with many local initiatives in the eleven years since its inception, pushing for government funding and helping to grow the influence of gaming at wider industry events like Barcelona's Mobile World Congress. Lobo acknowledges that it hasn't always been an easy journey.
"Our organisation has worked very closely with the Spanish and Catalonian governments to grow the local industry," he says. "We have built a social reputation for the sector, inspired academic initiatives, opened windows of visibility for Spanish companies and projects around the world, and pushed the increase of public support and the creation of the main Spanish games associations. This was difficult, especially the relation with the strong lobby of the local distribution sector, that until then was the only face of the industry. Now luckily the government recognises the difference between what is a market and the distributors interest, and the interest and potential of developing a sector that attracts investments and generates value and talent for the country."
Local studios tend to agree. Horacio Martos, co-founder and co-CEO of Social Point, says that bringing the world's industry to the city has a raft of potential benefits.
"We can perfectly understand the value trade fairs and events such as MWC and Gamelab can have for Barcelona, especially to generate market interest in the city and to position Barcelona as a place to business. For Social Point, mobile and gaming trade fairs allow us to meet business partners who come to Barcelona to exchange ideas, learnings and potential business opportunities. Also, we are able to host them in our offices allowing them to know us better and build trust. Finally, it is also an opportunity to talk to professionals who we might be interested in joining Social Point's talent."
"10 years ago it was very difficult to raise significant amounts for tech startups. In the last few years, we have seen a number of funding rounds greater than €5m"
With 280 employees at its Barcelona HQ, Social Point is one of the local scene's big players. Far from feeling threatened by the competition which local growth represents, Martos welcomes the plethora of local talent.
"In the last few years we have seen an increasing number of development companies being started, some growing and positioning themselves successfully in the market and also foreign companies establishing themselves and hiring local professionals for the growing number of studios. As a consequence, Barcelona especially, has consolidated its position as a world gaming hub.
"10 years ago it was very difficult to raise significant amounts for tech startups. In the last few years, we have seen a number of funding rounds greater than €5m. International investors, in many occasions led by top local VCs, have become comfortable in investing in tech startups and early stage companies in Spain."
"Spain represents a good mix for game developers, with a combination of very creative people in the comic, animation and design industries," said Xavier Carrillo, CEO of mobile developer Digital Legends Entertainment. "From this powerful base, the Spanish industry has pivoted from being a handful group of independent developers to a structured and organised industry. In the past those independent developers managed with their own efforts and resources to grow and to establish themselves as recognised developers, with games selling worldwide."
Digital Legends has played no small part in that growth, expanding rapidly from its early days in N-Gage development to current projects like Afterpulse and The Respawnables, with Carrillo himself appearing on-stage with Steve Jobs and Digital Legends CTO Unai Landa in 2008 to help launch the App Store with their mobile game Kroll.
"Developers have access to funding programs at all stages, from several thousand up to a million Euros, making Spain one of the most attractive countries for developers"
Carrillo made clear that the impact of Gamelab itself was a significant factor in the organisation and consolidation of the local development scene, praising the event's influence on the strength of Spanish gaming thanks to the attraction of influential speakers and sponsors, as well as the provision of networking opportunities and recognition for Spanish teams thanks to the Academy Awards. In addition, says Carrillo, the contribution of the event to persuading the Spanish government to support games should not be underestimated.
"Several years ago those developers decided that something need to be done to create the foundations of a solid games industry. They created a games association (DEV), and together with the founders of Gamelab and the Spanish Academy of Interactive Arts and Sciences started to gain recognition from governments and institutions and to evangelise them about the strategic importance of this industry for Spain.
"The outcome has been the passing of several laws in recognition of videogames as a cultural industry as well as to recognise it as Innovation and R&D - therefore benefiting from the government's R&D loans as well as tax exemptions. Developers have access to funding programs at all stages, from several thousand up to a million Euros, making Spain one of the most attractive countries for developers."
"There's a 'before and an after Gamelab' picture of local videogames"
María Teresa Cordón
María Teresa Cordón, Studio Director at Ubisoft Barcelona, also praised the influence of Gamelab, noting that having a focal point event gave companies an excellent opportunity to reach key influencers.
"There's a 'before and an after Gamelab' picture of local videogames," said Cordón. "International events like this create a hub, international exposure and a learning and sharing community. It's evident that this is strategic for the industry and more and more for our country. Gamelab is a great window and gives international exposure. It's a place to meet important actors of our industry. The speakers are really interesting and there are several little events organised for networking, press interviews and occasions to meet and do business which make it a unique opportunity to get exposure and good contacts. Gamelab gave Barcelona the visibility it did not have before in the video games industry.
"Now, Barcelona has become an industry hub. Obviously this enriches the industry and helps attracting companies, investors, talents. From a very poor existence, our local community of developers has grown in a tremendous way to a hub of big companies being present in the same city. Very relevant to this is that in Spain and Catalonia there are very high level computer science universities and a well known tradition in culture and art with very famous artists as you know. A lot of universities have video games Masters and we have recently created a specific degree in videogames. In UBI Barcelona we never had too much difficulties in finding the majority of the profiles we need. For the others, we look abroad and the attractiveness of the city and the country, together with the great interest of our brands is a good cocktail to find the necessary talent."
GamesIndustry.biz is a long-term media partner for Gamelab. As a part of that, attendance, travel and accommodation costs are been covered by the show organisers. Unless otherwise specified, any coverage is completely independent of this arrangement.