ESA Honors Texas Governor Rick Perry for Supporting The Video Games Industry

ESA Honors Texas Governor Rick Perry for Supporting The Video Games Industry

The Entertainment Software Association (ESA) today presented Texas Gov. Rick Perry (and former Republican presidential candidate) an award for his efforts to create jobs, provide tax incentives and generally foster the growth of the computer and video game industry in the state. ESA president and CEO Michael D. Gallagher presented the award to the Governor and praised him for his “longstanding support for the industry” during an award ceremony at the historic Governor’s Mansion. The event included members from the video games industry, business leaders, and state officials.

“Governor Perry has been a true champion for Texas and for our industry,” said Mr. Gallagher. “At E3 in 2008, he made a personal pitch for computer and video game companies to come to Texas. Since then, he has dedicated his passion and energy to building the state’s global reputation as an innovation incubator and economic powerhouse, known for its creative community and cutting-edge businesses.”

Gov. Perry worked with the Texas Legislature to implement and later improve the Texas Moving Image Industry Incentive Program, which created a business friendly environment for computer and video game companies. The Texas Film Commission says that the video games industry invested $643.5 million in in-state productions between 2006 and 2009. The industry also created more full time jobs than any other moving image entertainment sector from 2007 to 2009, employing nearly 14,000 direct and indirect workers in 2009 and adding more than $490 million to the state economy.

Game industry finds a foothold in St. Louis

Asian fans of League of Legends, one of the world’s most popular online games, probably have no idea that their play is being monitored in a 10th-floor office in Clayton.

Riot Games expands Clayton office

They probably don’t care, either. All they want to know is that the game works and that it regularly presents them with new characters and new challenges. And that’s the job of the 40 people who work here for Riot Games, the Santa Monica, Calif., company that created League of Legends.

The St. Louis area isn’t known as a hotbed of video game development, but the industry has developed a mini-hub here.

Riot arrived in 2011. Graphite Lab, which develops children’s games for brand-name companies such as Disney and Hasbro, has been here since 2009 and now has nine employees in its Maryland Heights studio.

Other industry players range from Simutronics, a 27-year-old studio with 30 employees in Maryland Heights, to startups such as Butterscotch Shenanigans, which is just releasing its second game.

In part, the game industry here is a byproduct of the mobile-computing revolution. By creating app stores where any developer can sell — or give away — a game, Apple and Google have democratized the industry.

“The development budgets for these games also are significantly lower, which means the high cost of production is no longer a barrier to entry,” says Walt Scacchi, research director at the University of California-Irvine Center for Computer Games and Virtual Worlds.

That’s exactly what Samuel and Seth Coster, co-founders of Butterscotch Shenanigans, are figuring. They released their second game, Quadropus Rampage, for Android devices last week and say it will be available in the Apple store this week.

Samuel Coster says the brothers’ development costs are “phenomenally low. You have to eat, you have to pay rent, and literally for Seth and me those are the only expenses we have.”

Scacchi says the game industry remains highly concentrated in the Los Angeles and San Francisco areas, but he’s seeing more activity in non-traditional places such as St. Louis. “I think we’ll see that kind of growth continuing,” he said. “It’s a lot easier to grow a local game industry than to move into the South of Market area in San Francisco where you have to compete with Google and Zynga and Facebook for talent.”

Some game companies have found plenty of talent in St. Louis, while others say it’s a challenge. Scott Gelb, Riot Games’ vice president for technology, says the availability of engineers is a big reason for the firm’s rapid growth here.

Gelb works in Santa Monica, but he’s a former St. Louisan and was an advocate for expanding here. “I saw that a lot of St. Louis developers were really passionate about what they were doing, but there weren’t a lot of startup-type environments for them to work in,” he said.

Graphite Lab, which has a Play-Doh alphabet game coming out soon for Hasbro, is part of a company that also operates in Springfield, Mo., and Austin, Texas. Matt Raithel, Graphite’s studio director, says he’s found “a growing pipeline” of talent here.

Simutronics founder David Whatley, however, doesn’t think the area talent pool is deep enough. “The schools here have great programs if you want to be a doctor or a lawyer, but if you want to be a computer game developer, it’s a wasteland,” he said.

Area educators should pay attention to his words. If they turn out graduates with the creative and technical skills that games require, Whatley and others say, a growing industry is eager to hire them.



Zynga cuts 520 employees, closes New York and Los Angeles offices

18 percent of global workforce is laid off as Zynga shifts toward mobile

Zynga cuts 520 employees, closes New York and Los Angeles offices

Zynga has announced the layoffs of 520 employees, which is approximately 18 percent of the company’s global workforce. An additional report by AllThingsD also has the company shuttering offices in New York, Los Angeles, Austin, and Dallas. The cuts in staff and infrastructure will lead to cost savings of $70 to $80 million, and the workforce reduction is expected to be complete by August 2013.

In a letter to employees, Zynga chief executive officer Mark Pincus said the company is shifting towards mobile development, instead of the social browser games that led to its rise.

“Today is a hard day for Zynga and an emotional one for every employee of our company. The impact of these layoffs will be felt across every group in the company,” said Pincus in the letter. “The scale that served us so well in building and delivering the leading social gaming service on the Web is now making it hard to successfully lead across mobile and multiplatform, which is where social games are going to be played.”

“These moves, while hard to face today, represent a proactive commitment to our mission of connecting the world through games. Mobile and touch screens are revolutionizing gaming. Our opportunity is to make mobile gaming truly social by offering people new, fun ways to meet, play and connect. By reducing our cost structure today we will offer our teams the runway they need to take risks and develop these breakthrough new social experiences.”

Zynga is projecting net losses for the second quarter of 2013 in the range of $28.5 to $39 million.