More Game Industry Optimism Than a Year Ago, AIAS President Says

"Even though certainly people are still feeling the effects of the economy,” Martin Rae, president of the Academy of Interactive Arts & Sciences (AIAS), said game industry members are “more optimistic coming out of last year” into 2011. And that optimism is “across the board -- internationally as well” as the U.S., he told Consumer Electronics Daily just before the start of his organization’s Design Innovate Create Entertain (D.I.C.E.) Summit in Las Vegas this week.

The Summit kicks off Tuesday and runs through Friday. It’s the first of the major annual U.S. game conferences to be held in 2011, with the Game Developers Conference following in San Francisco Feb. 28-March 4 and E3 June 7-9 in Los Angeles. But D.I.C.E. is known for its more intimate feel that’s achieved in part through its smaller attendance in comparison to the other two U.S. game conferences. It will be Rae’s first D.I.C.E. as head of AIAS, after replacing Joseph Olin as president in the fall (CED Oct 12 p8).

One positive sign was that “we've seen … deal makers send more people this year than in the past” to the Summit, Rae said. Whereas some German or Scandinavian companies may have only sent two employees to last year’s Summit, they're sending five people this year, he said.

Rae predicted that the 200 or so jobs lost at Disney Interactive last month (CED Jan 27 p9) won’t prove typical for the game industry in the near future. Many jobs were lost in the game sector since the start of the recession as companies took a hit on their earnings and needed to carefully watch their expenses. That seems to be easing up now for the most part, and Rae said he didn’t expect to see the same sort of large-scale job cuts as in recent years. But he warned, “As a business model might change a little bit to recognize new sales areas or new games or new platforms, naturally I think some personnel is going to get reapportioned or moved around.”

Vancouver, Canada, was especially hurt by game industry cuts in recent years, Jared Shaw, lead recruiter at 31337 Recruiters, told us in 2009 (CED April 9/09 p6). That trend seemed to continue last month when Disney closed its Propaganda Games studio there (CED Jan 27 p9). But Shaw told us after Disney’s move that that was the “only thing of significance lately” in terms of game industry job cuts overall. Other than that, we've seen just “a few small startups of 5-6 people coming and going” of late, he said.

"I think the optimism is going to create a lot more opportunities, and where you might see shrinkage in one or two areas off of certain titles that might not have done as well as people would have liked, you're going to see growth in other areas,” Rae said. “The overall business looks pretty favorable going forward,” he said, citing Facebook game developer Zynga as an example of a company that’s been growing significantly over the past couple of years.

There’s “a lot more movement to other platforms” this year, including “a lot of interest in social games” and “small footprint games,” said Rae. Game companies are looking more than ever to adapt their most successful brands from the traditional console systems to new platforms, he said. Meanwhile “the blockbuster titles” last year “really sold well,” so companies owning those properties were “pretty pleased” and are working on the “next iteration” of them now, he said. “This D.I.C.E. is probably a key one for getting everyone to talk about growing their business into the [expanding] revenue segments of the industry,” he said.

Like Electronic Arts did last week (CED Feb 3 p5), Rae said “there’s a lot of sales numbers just not caught at retail and reported in normal channels” now, due in part to the growth of digital distribution. While packaged game sales may be down, “the entire game market in other areas continues to grow,” he said. Game publishers are “very, very keen on growing their business outside of … their normal channels,” he said.

D.I.C.E. registration was “running right about where we were last year” as of last week, and the Summit will be “sold out again,” Rae said. Registration officially closed last week, but he expected to sign up a few more game industry members. AIAS has been registering about 700-750 people each year, and that’s what Rae expected to have again this year, although more than that usually attend the annual awards presentation Thursday night, he said. While many of the attendees are from the West Coast, Rae said, “We have a big contingent from Europe,” and “we have some coming in from Asia,” along with some from other regions of the U.S.