Italy’s gaming industry grows to 1,600 people and 160 game studios

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Made in Italy takes on a new meaning when it comes to games. The gaming industry in Italy grew by 45% from 2018 to 2021 to reach more than 1,600 developers and 160 game studios, according to a survey conducted by the Italian gaming association.

The investigation of the Italian Association of Interactive Digital Entertainment (IIDEA) and research firm IDG Consulting was the fifth census of Italian game developers and it showed how the Italian game industry has flourished, even during the pandemic. The results show that the industry is increasingly mature with 73% of developers now operating for more than four years, Thalita Malago, CEO of IIDEA, said in an interview with GamesBeat.

“We have a number of consolidated companies that have been in the market for four years which have recently either been acquired by international groups or have been able to establish significant partnerships with international companies,” said Malago. “We have a group of startups with young developers who do very creative and innovative production. These are the two main factories for which we see the sector developing. “

The number of companies with a turnover of over € 500,000 ($ 609,000) and more than 20 employees is increasing. A third of companies now have more than 10 employees and a fifth have more than 20. In the 2018 census, 17% had more than 10 employees and the remaining 83% were smaller. Overall market revenue was $ 2.65 billion, up 21.9% from 2018. The overall employment and studio numbers are pretty solid, according to research I have found. collected in 2017 on the global video game industry.

In the past two years, 35% of businesses have hired new staff and 59% said they plan to do so in the next two years. The sector can generate professional opportunities especially for the young generation (79% of employees are under 36) and in various areas with high added value in terms of specialized skills, such as technology, art and design, as well as as management and Support.

Above: Italy has 1,600 gaming employees.

Image Credit: IIDEA / IDG Consulting

The national Italian industry manufactures games for the international market, which accounts for 94% of revenues. Europe is the main target market with 60% of turnover, followed by North America with 25%. And companies are looking to expand their sales in Asia. Financial support comes from game publishers and public and bank funding. Around 93% of developers use equity to finance their activities and publishers now finance 28% of companies, up from 21% in 2018. Public funding represents 24%, up from 6% in 2018, and banks 18% against 6% in 2018. This shows growing confidence in Italian studios.

Overall, Italy has 62.3 million people spread over 26.2 million households. It has 16.7 million players, or 38% of the population, making it one of the top 10 gaming markets in the world. It’s a key ingredient in fueling the ranks of game developers. In total, 1.5 million Italians work in the creative industries. About 62% of 11-14 year olds play games on their mobile phones. And 67% of Italian gamers who play more than four hours a week follow a streamer on YouTube or Twitch.

Great games

Above: Milestone’s Hot Wheels Unleashed set.

Image Credit: Milestone

Luisa Bixio, vice president of IIDEA and CEO of racing games studio Milestone Studios, said in an interview with GamesBeat that the roots of companies like Ferrari have inspired Italian game developers to focus on gaming games. race. Ferrari also sponsored an eSport tournament for racing games that will see the finalists race cars on a physical track.

Bixio’s own company makes titles such as MotoGP 21, Hot Wheels Unleashed, Ride 4, Supercross 4, and MXGP 20. Other racing companies include Kunos Simulazione and Raceward Studios. Big Ben Interactive acquired Raceward Studios to create racing games.

Italian companies partnering with global companies include Milestone, Ubisoft Milan, Storm in a Teacup, 34BigThings, and Xplored. Many studios are turning to double-A and triple-A console and PC games.

Video games are a young industry in Italy, but there are groups of developers who are building bigger companies,” Bixio said. “Several companies are making racing games. Digital growth really helps. “

Horror games went well, including Storm in a Teacup, The Suicide of Rachel Foster, Close to the Sun, and Remothered: Tormented Fathers. Broken Arms Games in the UK recently created Hundred Days, which was about running a winery in Italy. Ubisoft Milan helped create Mario + Rabbids: Kingdom Battle, a famous title on Nintendo Switch where Nintendo and the French Ubisoft collaborated. I wrote about one called Last Day of June by Massimo Guarino, Creative Director at Ovosonico.

“We have a wide variety of genres in Italian production companies, with particular expertise in racing games and horror games,” said Malago.

Pandemic effect

Above: Made in Italy.

Image Credit: IIDEA / IDG Consulting

As a negative effect of the pandemic, companies mainly reported delays in concluding contracts with publishers, investors and partners and in executing projects. For most companies, working remotely has had no effect or a positive effect on business, and almost 70% of them will continue to use this way of working in the future. Like the rest of the video game industry around the world, Italian developers have shown an ability to adapt to restrictions imposed by the health emergency and a high level of workforce flexibility, Bixio said. .

About 53% said COVID-19 had not affected their operations, although 36% reported delays in the production of their games. And 87% of respondents said they were optimistic about the future of the industry and their businesses.

The smaller studios were used to work from home or without an office, ”said Malago. “We were a little affected in terms of efficiency, but we learned something new. We have learned to be more efficient. “

The government has offered tax breaks on digital spending. The IIDEA playgroup works with two ministries: the Ministry of Culture and the Ministry of Economic Development. The Minister of Culture announced a tax break that will cover 25% of the production costs of companies using video games. This plan has been submitted to the European Commission for approval, in accordance with European Union law. And earlier this year, the Ministry of Economic Development signed a decree introducing a fund of game prototypes that developers can access to cover 50% of their costs of creating prototypes.

Above: An overview of Italian gaming companies.

Image Credit: IIDEA / IDG Consulting

“This puts our developers in a better position to compete with other developers from other countries to present their projects to publishers and investors,” said Malago.

The industry is served by a few big events, including Milan Games Week, which takes place in the fall and drew more than 150,000 fans in the pre-pandemic period. The Italian Video Game Awards take place in Pisa. The latter organizes a business-to-business event where developers can meet publishers and potential investors. Last year, the event brought together more than 50 companies. It also has a chapter of the International Association of Game Developers in Turin.

At present, local investors are not looking to invest in local Italian gaming companies, which the census has revealed.

“The role of investors is still quite limited, and this may be mainly due to the fact that there is no in-depth knowledge of the sector with local investors,” said Malago.

Hopefully that will change, as the world has over 80 different gaming-focused investment funds.

Methodology

Above: MXGP 20 is one of Milestone’s racing games.

Image Credit: IIDEA / IDG Consulting

This year’s edition includes not only a quantitative survey, but also a qualitative analysis of the Italian industry, thanks to a partnership with IDG Consulting, an internationally renowned research and consulting company, with the aim of providing a picture full of the potential offered by made video games in Italy, especially with a view to attracting foreign investment to our country.

The quantitative survey is based on an online questionnaire, active from February 24 to April 1, 2021, open to Italian companies and freelancers operating in the video game development sector in Italy. A total of 160 valid responses were recorded, an increase of 26% over the number of responses recorded in 2018. And 73% of respondents were collective enterprises, 18% were freelancers and 9% were other forms of organization. The IIDEA itself is ten years old.

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