Amid slumping profits for Boston-area gaming companies and sluggish venture capital investments nationwide, a former Turbine executive said the city’s East Coast location is partly to blame for local game developers’ economic woes.
Last year, the city of Boston created a government-run committee under the Boston Redevelopment Authority to expand local game development within its community. In the meantime, however, the recession has hit certain sectors of the local game industry hard, including Boston-based Harmonix, which took a $432 million drop in its revenues. Rather than invest in the hit-driven AAA model of game development, it seems venture capitalists are turning to smaller start-ups like those in the social media, casual gaming and middleware sectors of the game industry.
But former Turbine President and CEO Jeffrey Anderson, now the founder of online football game developer Quick Hit, Inc., says investment in his company is still suffering from two factors: an overall chilling effect in venture capital caused by the recession and, more specifically, his company’s Greater Boston-area location. While Boston has a number of gaming giants, many large gaming companies such as Blizzard, Nintendo and EA are all based on the West Coast. “It’s harder to find people who understand the business that you’re in,” Anderson said. “Therefore it makes it more difficult getting [venture capitalists] to invest.”
Other Boston gaming company executives are considerably more optimistic, however, including current Turbine President Jim Crowley. “I think it’s really a robust market,” Crowley said. “Good ideas and good execution find capital. I’m actually quite bullish.”
It appears in the short term that videogaming’s presence in Boston is growing, as the city will be the host of PAX East this March. Whether or not the local government’s efforts, including the government-run advisory committee and a community website for Boston game developers, will be successful remains to be seen, but the city’s recognition of the relevance and importance of game development is laudable.