IT'S too easy to get caught up with the massive budgets and huge teams. The real future is the small guys doing really innovative things
ONE humid afternoon in 1996, a small group of young, enthusiastic computer programmers squeezed into a pokey office above a shop in Nethergate, Dundee.
They listened attentively as their boss, David Jones – at the time chief executive of a compan
y called DMA Design – talked about his latest project, a police game in which players drove around a city looking for offending drivers, and penalising them for breaking speed limits and knocking over pedestrians.
When those young men emerged several hours a later, they had no idea that not only had they just changed their lives irrevocably, but they had also turned around the fortunes of the Scottish digital entertainment industry as a whole.
That afternoon, Jones's project was transformed from a run-of-the-mill police game into one of the most talked about computer game series of all time: Grand Theft Auto (GTA).
By changing the player from a policeman into a ruthless law-breaker, Jones and his team, whose creation was later taken over by Edinburgh-based Rockstar North, sealed their place in the history books, and put Scotland on the world games industry map.
Twelve years and four instalments of GTA later, the digital entertainment industry in Scotland has transformed from a small, unsubstantial sector into one which, according to Government statistics released last week, contributes more than £5bn to the economy, accounts for 100,000 jobs, and whose companies generate 4% of Scotland's total economic output.
The ambition doesn't end there. As hundreds of Scottish programmers, mobile phone content developers and other digital entertainment experts – who, unusually for a business crowd, were clad in denim and trainers – descended on the Royal Concert Hall in Glasgow for a conference last week, they were urged by Scottish Enterprise to seize the "huge opportunities" the worldwide industry has to offer. The global value of the digital media and creative industries rocketed from $831bn in 2000 to $1.3 trillion in 2005, and Scottish Enterprise is keen for Scotland's companies to claim a share of this booming sector.
As Adrian Gillespie of SE's digital media and enabling technologies department, says: "There are huge opportunities for this sector to make a disproportionate impact on the growth of the Scottish economy. With an annual industry growth rate projected at 7.2%, returns are potentially enormous."
But with numerous other countries, including the USA, China and many of the Eastern European countries, also competing for a slice of the market, how can Scotland ensure it keeps up its momentum?
According to Chris Wright, founder of GamesConsultancy.com, the games industry in Scotland needs to target new audiences if it is to keep pace with the ever changing market. Although companies such as Rockstar North and Dundee-based Realtime Worlds, which produced the Bafta-winning Crackdown, have been successful, Wright says it will be difficult for other, newer Scottish companies to replicate their success.
Since GTA's 1997 launch, the games industry has changed substantially. And as graphics, plots and consoles have become more sophisticated, projects that used to require a small team and a budget of a couple of million pounds now need up to 200 staff and budgets of between £100m and £200m. Although it is possible for games publishers that have grown up with the industry and profited from the success of early games such as GTA to meet these kinds of budgets, smaller companies trying to break into the industry would be better off targeting other sectors, Wright says.
He argues there is more opportunity for Scotland in the developing "casual games" industry, which typically produces lower budget games, aimed at a wider audience. An example of this is Tetris, which involves stacking differently sized building blocks.
"Casual games cost less than £1m to make and take less than a year to develop by a staff of around 20 people," he told the digital entertainment conference in Glasgow on Thursday. "There is a range of these small developers in Scotland, which is really exciting. This is where the future of games is; it's not in the massive, monolithic blockbusters. This is where the market is going and I think Scotland has a unique position."
Rather than trying to compete with the likes of Rockstar in the teenage male market, Wright says there is money to be made developing products for older players and women – a sector which is less developed and therefore presents more opportunity.
"It's too easy to get caught up with the massive budgets and huge teams. Where the real future is is the small guys doing the really innovative things," he said.
According to Mike Short, chief technology officer at O2, the mobile phone company, there is plenty of scope for Scottish companies to make their mark on the mobile applications market as well. Also speaking at last week's conference, he said that within five years, there will be more mobile phones than people in the world. Areas such as mobile internet in particular are booming, offering new opportunities to develop online mobile games, mapping services and other applications.
He said: "In two years, all devices should have mobile internet and mobile e-mail. Last year, 17m people accessed mobile internet at least once in the last quarter. This is probably growing faster than any other area."
He argued the growth in the mobile applications industry has potentially "huge ramifications for the Scottish economy".
However, it won't be easy and, as one audience member pointed out, the Scottish industry is under pressure from Eastern Europe where small, start-up firms are knocking out games for a fraction of what it costs to develop software in this country.
Yoostar, a two-year-old entertainment company based in Tayside, is trying to raise £2m to move its production facility to Thailand. It says costs for medium-sized projects are "prohibitively" high here and a move to Thailand could help it make money.
"Basically, YooStar games produced in the UK break even," says its chief executive Gordie Ross. "The switch to Thailand will make the business profitable."
Nevertheless, even Scotland's large corporates are recognising the potential offered by the digital entertainment industry and are ploughing millions of pounds into developing their websites and digital broadcasting services. In particular, STV-owner Scottish Media Group is eager to seize a sizeable portion of the digital entertainment market, and is in the process of developing a new online video site.
Robert Dawson Scott, who was appointed to STV's new media division this month, told the conference: "There's lots of opportunity to make a difference. Broadcasting as we currently understand it is going to become a minority sport in a five-to-ten-year time frame. SMG chief executive Rob Woodward is investing heavily in the online side of the business. It has gone from a handful of casuals doing their thing to a serious unit of a dozen or so people."
