Scottish games development comes of age in evolving industry

According to the accepted mythology, a good many Spectrum computers made at the former Timex factory in Dundee during the 1980s that failed quality control or otherwise “fell off the back of a lorry” made their way into homes across the city. They were hyped as tools of the future that could help children with their homework, but the reality in the days before the rise of the global internet was that their main domestic forte was that of gaming console.

This is said to have inspired a generation of entrepreneurs who went on to establish the first wave of video game companies in Scotland. They most famously included DMA Design headed by up Dave Jones and Mike Dailly, which released the global hit Lemmings in 1991 and followed up six years later with the first instalment of Grand Theft Auto, one of the industry’s most successful franchises of all time.

Now under the aegis of Rockstar North in Edinburgh, which in turn is part of US gaming conglomerate TakeTwo Interactive, the first promo for the upcoming GTA VI title due for release next year recently surpassed Minecraft as the most-watched video game trailer of all time with 168 million views and counting. Minecraft also has strong Scottish connections as 4J Studios of Dundee, headed up by Chris van der Kuyl and Paddy Burns, has been responsible for porting the original PC version to consoles and handheld platforms since 2012.

Brian Baglow – who joined DMA in 1993 as a writer on the original GTA, and is currently head of the Scottish Games Network – says these early successes were vital in establishing a Scottish sector which today is home to approximately 125 studios throughout the country. He argues that Dundee remains at the nexus in part because the industry is deeply misunderstood, particularly by those in charge of the country’s economic development.

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“In the UK we have got this misconception still to this day that video games are digital toys, and therefore they are for kids, and therefore they have no value because they are for children,” he said. “It’s only relatively recently that games have been taken seriously as a medium, thanks to the enormous global commercial bottom line.

“Since nobody took them seriously, they were allowed to remain in Dundee. If they were taken seriously like proper grown-up screen industries like film or TV, I have no doubt they would have dragged kicking and screaming to Edinburgh or Glasgow, maybe even London. If you look at Dundee’s other success story, DC Thomson with the Beano and the Dandy – also for kids, also not taken seriously, also just allowed to do their own thing.

“So Dundee established itself relatively early as a gaming hub … it had two of the earliest studios in the country with DMA Design and VIS, which was Chris van der Kuyl’s first company, and then in 1997, Bell Street Tech as it was, or Abertay University as it has become, decided it would be a good idea to create a degree course for game design and development and once that happened, that just cemented things.”

BUILDING THE FUTURE

Along with Mr Burns and Frank Arnot, Mr van der Kuyl set up 4J studios in April 2005, just 12 days after his previous venture VIS Entertainment went into administration. While games development has always been a tumultuous industry littered with acquisitions, layoffs and bankruptcies, Mr van der Kuyl says it has continued to grow overall thanks in great measure to the education system.

“Twenty-five years ago we were just at the beginning of the partnership with Abertay to deliver the world’s first games degree,” he said. “They did it, they sit in the top 10 globally, and it’s one of the principal reasons that people are clustering around Dundee – we’ve got that never-ending talent supply coming through the university.

“If not for that, I probably wouldn’t be here anymore. We’d have run out of talent to bring in.”

Chris van der Kuyl (Image: DC Thomson)

Abertay launched its first course in 1997 and has since been joined by seven further Scottish institutions: Edinburgh Napier, Glasgow Caledonian, Glasgow School of Art, Heriot-Watt, the SAE Institute, the University of the Highlands and Islands, and the University of the West of Scotland.

Ryan Locke, head of excellence in games education at Abertay, says demand for design and production management remains strong despite widespread global job losses in 2023 a part of an industry correction following breakneck growth triggered by the pandemic.

“During Covid there was a lot of rapid hiring as everybody staying at home meant there was a massive burgeoning of digital entertainment and products,” he said. “That wasn’t just computer games, but computer games did experience a massive boom during  Covid and the various lockdowns. More people were playing and downloading digital games which meant a lot of companies ended up recruiting, or over-recruiting in certain instances.”

That said, the industry has proven adept at finding innovative ways of tapping into new demographics as playing video games is no longer the preserve of young males in their teens and 20s. Several studies have shown video games to be an effective tool in battling cognitive decline which ha s boosted the number of older gamers, while others such as Dundee independent Outplay have succeeded in designing games aimed squarely at women.

Another revolution has been the proliferation of video games apps, a cheaper way to play on a platform that is already owned by 85% of the UK population.

“A game that succeeds on a casual or mobile platform is likely to make more money than something you still pour lots of millions into but is only available on PlayStation,” Mr Locke said, “so you see a lot of companies aiming for long-term evergreen products that impact you and are available on your mobile phone, and on your laptop or PC, and your tablet.

“Those are games are handed out for free, but ultimately they want millions of players tuning in and doing some daily activity, and they are presenting players with lots of opportunities to enhance that experience through a digital shopfront of some kind.”

NEW ROUTES TO MARKET

The launch of the App Store in 2008 inadvertently turned video games retailing on its head as the sales model of purchasing physical products in stores was largely supplanted by digital distribution. Since then, small developers have been able to offer their wares on the same platform as the world’s biggest companies.

“Suddenly games like Minecraft appeared, with one guy in his bedroom creating the world’s biggest game,” Mr van der Kuyl said.

“In 2005 or 2006 we would have said that’s not possible. To me, to make the world’s biggest game you needed to have 1,000 developers – I was completely wrong.”

Steam, the digital distribution platform for PC games, has an estimated 160 million players around the world which is about the same number as all of the PlayStations and Xboxes ever sold.

Originally launched in 2003 to automatically provide game updates for its owner, Valve Corporation, Steam expanded into providing third-party titles in 2005. This was followed in 2008 by the release of Steamworks, a free suite of tools to help developers and publishers build their games.

Elsewhere, a free version of cross platform game engine Unity is available to individuals and small organisations. Epic, owner of the Unreal Engine for large-budget AAA games, only charges developers after they have clocked up their first $1 million (£787,000) in revenues.

“The opportunities are very, very different, and the challenges facing developers are very different,” Mr Baglow said. “The first thing VIS had to do when they were making H.E.D.Z. [in the 1990s] was build the engine to make the game, so you had to make the tech to make the game.

“The challenges facing games companies these days are not making a product – it’s user acquisition, it’s monetisation, it’s lifetime value, and it’s keeping your players happy because so much of the content out there now is not premium … but is free to play.”

The Baby in Yellow, developed by the co-founders of Dundee studio Team Terrible, is currently available on the App Store, Play Store and Steam and has been downloaded more than 200 million times since it first appeared in 2020. Despite this remarkable and largely accidental success, Team Terrible chief executive Greg Lee agrees that the most difficult bit for app developers is standing out in a sea of competition.

The Baby in Yellow (Image: Team Terrible)

“Anyone can upload a game,” he said. “You are getting, I don’t know, but you are probably talking about hundreds of thousands if not millions of apps uploaded to these platforms every year. They are absolutely ram-packed.

“It’s not a technical problem, it’s an advertising and marketing problem. Anyone can upload a game – very, very few people can upload a game that actually makes any money.”

COMPETITION FOR EYEBALLS

Billed as a “Lovecraftian comedy horror game” where you must look after a suspicious infant, Baby in Yellow is the product of a July 2020 games jam in which Mr Lee and Team Terrible co-founder Aaron Baumbach had 48 hours to build a prototype around the theme of “Who is in control?”.

The two originally met while students at Abertay where they bonded over “little side projects and just making our own little things”. Each went on to work in the industry for various companies before reuniting at Ruffian Games, now part of Rockstar.

They set up Team Terrible two months after the Baby in Yellow games jam, but mainly intended it as a holding company for the IP generated by their various side projects. They initially kept their day jobs as downloads of Baby in Yellow picked up speed, an unusual accomplishment for game jam products which are often incomplete because of time restrictions.

“But for some reason this one started getting thousands of downloads which was way beyond what we would normally get, which is a few hundred if it is doing well,” Mr Lee said.

The next thing that spurred them on was the Play Store where more than 20 look-alike versions of their game had been uploaded as others cashed in on the title’s growing popularity.

“Some of those games had in the region of half a million downloads and they had adverts in them which meant they were making money, [and] we were making no money at this stage, so next we decided we’d throw it on the mobile and see what happened,” Mr Lee said.

Greg Lee, chief executive of Team Terrible (Image: Team Terrible)

“We got it on mobile and next thing it absolutely blew up. We started getting way more downloads and because we had adverts in the game we were earning money off this as well, and at that stage is was kind of a thing of what do we want to do with this next, and we came up with this plan for the next updates and stuff, but then we quickly realised we couldn’t do that and have full-time employment because there’s just not enough time in the day, so we quit.”

The PC version of Baby in Yellow is now available for a fee on Steam but was initially a free download on itch.io.

“That was essentially our advertising budget – the money we weren’t making on PC – because we saw that whenever we turned on premium for PC to pay to play our game, we dropped something like 60% or 70% of downloads, so we made the call quite early that we were going to sacrifice that income in order to build the IP and get it out there and get content creators familiar with it, and then basically make the money through mobile.”

THE NEXT ROCK STARS

“Every time you think the games industry has gone as far as it can go, something new appears and it bursts into life in a different way.”

So says Mr van der Kuyl, who notes that almost three-quarters of videos now on YouTube are of people recording themselves playing games. In some cases these influencers – who help promote games such as Baby in Yellow and many others – have tens of millions of followers and have thus created an entirely new economic sub-sector based around their online content.

“Twenty-five years ago we thought we would be the next rock stars – we were game developers and that was a ‘rock star’ thing to do,” Mr van der Kuyl said.

“What I have realised is that we are Fender – we make the guitars that rock stars use to create music we never imagined they would, and that’s where the industry really excites me.

“We are creating game experiences and platforms and we have a few ideas what people will do with them, but when we hand them over to the players of the world, they do things with them that we never could have imagined and are 10 times more exciting than we thought possible.”

Grand Theft Auto is another chapter in the global success story originating in Dundee (Image: Rockstar Games)

4J is currently developing its own titles which include an as-yet unannounced project that has been four years in the making and might be released later this year. It also owns stakes in three further Scottish studios: Puny Astronaut and Stormcloud Games, both in Dundee; and Edinburgh-based Ant Workshop.

In October 2022 4J announced that it was also moving into games publishing, with the first being last year’s release of Skye Tales by Puny Astronaut.

While Scotland has an admirable track record in games development, the sector contributes a relatively modest £188.5m in GVA to the country’s economy because the most successful titles made here are owned by companies abroad. That end of the value chain – think of the publishers as record companies, versus the developers as music bands – is where the bulk of revenues flow.

READ MORE: ‘Burgeoning’ Scots gaming sector attracts agency to Edinburgh

Scottish-based publishing has only begun to emerge in recent years and is limited to a handful of companies along with 4J. With about 120 employees in Dundee, Outplay is the UK’s largest independent mobile games developer and additionally handles publishing in that field. There is also London-headquartered Hutch Games, which established an office in Dundee in 2018, and indie publisher Firestoke which was established in Edinburgh in 2022.

“I think people have started to understand how big it is, but don’t realise, or maybe they don’t believe, the opportunity that Scotland is facing,” Mr van der Kuyl said.

“Scotland is really at a point where if we continue to execute the way we are, we could be one of the biggest centres in the world for games and games publishing – games creation – not just developing the way we are today.”

GAMING FOR GOOD

Glitchers joined the Scottish games community in the middle of the pandemic in 2020 after the lease on the company’s office in London expired. It is owner Max Scott-Slade’s second start-up, his first being a flash and mobile games operator set up with his brother Joshua.

“I got into the industry initially because I just happened to make games with my brother – we didn’t even realise it is a job, we were just having a good time,” he said.

“One day we did actually start making money from it though advertisements online, but then after a period of time Joshua had a serious mental health issue and ending up having a lot of psychotic episodes and was diagnosed with schizophrenia, so I had to set up a new business and that was Glitchers. That was just over 10 years ago.”

Glitchers is best-known for the award-winning Sea Hero Quest, a mobile game which contributes to research on dementia. Launched in 2016 in association with Alzheimer’s Research UK, University College London and the University of East Anglia, the project was backed with funding from Deutsche Telekom as part of its corporate and social responsibility (CSR) commitments.

There have been 20 scientific papers published on the data collected by Sea Hero Quest, which has captured data on the navigational skills of 4.5 million people to help identify the earliest signs of cognitive decline. The company is now closing in on another major cognitive game venture with a blue-chip corporate partner that could lead to Glitchers raising its first external funding of up to £3m.

Max Scott-Slade, founder of Glitchers (Image: Glitchers)

“We have already been growing the team quite fast and there are more people that we need to add into that, so there is a growth element to that for sure,” Mr Scott-Slade said, “but there is also a sustainability element as well.

“There is no point in hiring loads of people if you can’t afford to pay their wages in six months’ time. It’s a bit of a balancing act to make sure you can deliver but also not turn around in six months and make everyone redundant, which is what you see a lot in the industry. We are very different to that; we try very much to build sustainable growth.”

The company, which has grown from four to eight full-time staff since moving to Edinburgh, is also in pre-production on a biodiversity game that will draw from a 25-year concession on a section of forest in West Africa where scientists are monitoring and collecting data.

The game, currently known under the working title of Forest Guardians, will allow players to track animals in the area and is meant to generate additional revenue to support the scientists’ research.

“Players will learn about how biodiversity works and how ecosystems work, but it is not educational upfront on face value,” Mr Scott-Slade said.

“We try and trojan horse science into video games, but they always look and feel like video games. You don’t look at them and think: ‘Oh, that’s educational.’ That’s the important thing that distinguishes us from other companies, by making sure we really satisfy that element of play.”