Amber was never expected to make it so big. At its launch in 2013, its founders envisaged a company of 40-50 software engineers that would both provide services to the gaming industry and, sometime further down the road, start to develop their own games. Today its staff number almost 250, more than five times what originally seemed an ambitious target to its founders, and it has already started releasing its own titles.
Amber’s size and range of activities place it in a unique position somewhere between the big international firms that have set up in Bucharest to take advantage of the talented (and relatively cheap) workforce and the small indie game developers that are now springing up in increasing numbers in Romania. In terms of revenues — which for the sector in Romania totalled $145.3mn in 2016, small in global terms but up from $114.7mn in 2014 and $137mn in 2015 — it ranks fourth locally after the Romanian operations of major international firms Ubisoft, Electronic Arts and Gameloft, according to industry association the Romanian Game Developers Association (RGDA).
Tudor Postolache, the game development agency’s head of operations, explains this during an interview on the upper floor of two floors Amber has taken over in the prestigious Charles de Gaulle Plaza in north-central Bucharest. Amber’s staff are split between the support team, which provides development services, testing — otherwise known as quality assurance (QA) — and customer support, and the R&D team that develops games, both for other companies and, increasingly, Amber’s own titles.
Postolache attributes the rapid expansion to the quality of people Amber was able to attract, the “top of the cream in the industry locally” that made it possible to provide a high standard of services to customers who “decided to give us more and more work so we started to grow.”
Major titles the firm has worked on include Cinderella Freefall, which it created for Disney, but several years on Amber now has the resources to create its own original games using revenues from the work it does for other companies. Link Twin came from a game jam organised for Amber staff, and Postolache describes it as a “puzzle that sometimes made your brain pop”. Link Twin won several international awards, which gave Amber the confidence to go on and create more of its own IPs — resources permitting. As Postolache points out, “We are fully self-funded so we do have some limits as to the budgets and resources we can throw at these, though in the long run this is the way we want to further build up the studio.” Everything the firm has achieved so far has been done by reinvesting its profits.
At the start of the working day, the office is quiet; the support team works two shifts a day to ensure it serves both the European and US markets so only around half the staff are in the office. Also looking to the future, Postolache says Amber is considering expansion into Asia. This would make 24/7 global coverage possible, something that is difficult from its Romanian base without forcing employees to take on an anti-social graveyard shift, as well as positioning Amber for the future when Romania may no longer enjoy the cost advantage it does at present. “In Romania the success of outsourcing companies was based on high levels of quality, a good understanding of western culture, good English and very reasonable costs, but over the years the cost advantage has been getting thinner, and in a few years’ time it may become irrelevant.”
On top of this is the advantage that an Asian base — Amber is currently eyeing the Philippines though it hasn't made a final decision yet — would give the firm in terms of access to the huge Asian market, and in particular proximity to China and Japan.
“Asia is a big chunk of everything that is gaming,” says Postolache, citing research from London-based venture capital firm Atomico which shows that China accounts for around 25% of the gaming industry’s worldwide revenues. “The explosion in mobile games may have occurred a little later, but China has more than made up for lost time. It’s now not only the world’s largest market of gamers – with over 600mn – but also its most valuable by spend, eclipsing the US and even the whole of Europe combined,” the 2017 report says.
“This is a global industry but there are a lot of cultural differences that break it up into smaller areas. China and Japan stand out from the rest of the world. Japan consumes a completely different kind of entertainment, while China is not connected to the rest of the world technologically. They don’t have Apps Store or Google Play, so you need different distribution channels to get into that market,” Postolache explains.
Birth of an industry
Founded in 2013, Amber is a relative newcomer compared to the international firms that laid the foundation for the industry in Romania. Specifically Ubisoft’s arrival in 1992 can be seen as the birth of local game development. The France-based developer came to Bucharest back in 1992, a tremendous leap of faith into a country that was barely starting to emerge economically from the crippling austerity policies of the 1980s and politically from the violent end of the Ceausescu regime just three years earlier.
Sebastien Delen, general manager of Ubisoft Romania, describes the move as “visionary” and says it was based on an understanding that Ubisoft would need more talent in future. Delen wasn’t in Bucharest from the beginning, despite being a 20-year veteran of the company, but in an interview with bne IntelliNews he describes how “it started as a small initiative with less than 10 people, but they convinced the Ubisoft executives that the firm could rely on Eastern Europe in the years to come… We started to develop a pool of talent. A few years later there was competition, but we initiated that trend.”
He adds that Ubisoft is “very, very proud” of what has been achieved in Romania, with games developed in Bucharest including Blazing Angels, a flight combat game based on the Battle of Britain and other WW2 air battles, and Silent Hunter, which is also based on WW2 and is set in a US submarine in the Pacific. Not only that, but the successful move into Romania was followed by the launch of operations in Sofia (2006), Kyiv (2008), Belgrade (2016) and most recently Odessa (March 2018). There is “a lot of synergy and exchange between the East European offices,” says Delen, with the long-established Bucharest team “now helping other teams to grow and develop.”
Ubisoft was followed by other major international firms, among them Gameloft, Electronic Arts, King and Bandai Namco Entertainment, also attracted by the pool of talent in Romania. Like Ubisoft, Electronic Arts has developed some high profile games in Romania; for example the recent FIFA football simulation video games were developed jointly by its offices in Bucharest and Vancouver.
Even though salaries are rising in Romania and competition for staff — not just in game development but across the tech sector — is increasing, Romania remains an attractive destination for international game developers. “There is no sign of a slowing down in that regard. These companies are very stable, they have made very big games here, and they have survived even the recession of the late 2000s,” says Catalin Butnariu, president of the RGDA and co-founder and general manager of the Bucharest-based Carbon Incubator, which helps turn startups into viable video game development businesses.
On top of that, Romania is finally getting a solid indie development scene, industry insiders tell bne IntelliNews, something that has long been a phenomenon in the CEE region’s biggest economy Poland, but until relatively recently failed to get off the ground in any significant numbers in Romania. This is now changing; there are more than 50 independent studios in Bucharest and a further 16 in Romania’s second city Cluj plus smaller communities in Iasi, Timisoara and other cities, adding up to more than 90 altogether, not counting small startups working on their first games that haven’t yet registered a company.
RGDA executive director Andreea Per contrasts Romania with Poland, noting that Poland has been “very successful in terms of the local industry growing, that success put them on the map”. By contrast, the industry in Romania was led by the big companies who “had the courage to come here in the 1990s”. They “bred the industry”, with most of the new indie developers founded by former employees of big companies, who had original ideas and wanted more creative freedom.
Talk to anyone in game dev in Romania about successful indies, and the same names keep coming up, with KillHouse Games and These Awesome Guys invariably mentioned.
KillHouse’s operations could hardly look more different from Amber’s. They inhabit a one-room office with its walls thickly lined with large monitors in downtown Bucharest. When I interviewed co-founder Dan Dimitrescu in November 2017 only one of his colleagues was present, everyone having been up most of the night before overseeing the launch of an update to its original game DoorKickers.
DoorKickers is a strategy game where the player controls a squad of SWAT operatives battling criminals or terrorists. Developed after some unofficial training from Romania’s counter-terrorism office, it’s not only popular with gamers but has also been used for training by both SWAT officers in Florida and Russia’s Special Purpose Police Unit (OMON).
Dimitrescu says the topic was of personal interest to him — “we liked it from a gametech point of view, and the subject matter is very interesting for me. I’ve been reading books on this stuff for a long time” — on top of which he and his co-founder thought it would do well with customers as well as not being expensive to develop.
Explaining the reasons behind DoorKickers' success, Dimitrescu says, “What we did right was develop a niche game that excited people, but also we were not developers nobody had heard of.” Dimitrescu built his reputation at Ubisoft as the lead designer on Silent Hunter 4 and 5, and was well known among the “very tight community” of players. His co-founder Mihai Gosa has an equally stellar background at Ubisoft and Electronic Arts.
Another high-profile locally created game is Black the Fall, where a machinist plots his escape from a communist state. “We are children of the eighties, our childhood was inside communism. We have a lot of memories from that time — both good and bad — and we feel the way we are today is influenced by those times. We figured why not tell our story,” says Cristian Diaconescu, founder of Sand Studio which developed the game.
While Black the Fall has had some critical success (and a surprisingly large following in Brazil) Diaconescu acknowledges that for the most part people outside Romania and other former communist countries simply didn’t get it; other players “think it’s just another platform with dark vibes,” he admits. “We tried to make the game as successful as possible but there was a barrier we couldn’t break. One of the things we learned is that although we put our hearts and our passion into it, the customer is still a customer.” He says that given the chance to make Black the Fall again, “I wouldn’t change anything” but says that Sand Studios’ next game is much more accessible (I got a sneak preview but can’t disclose any more).
Both KillHouse and Sand Studio are carving out a share in a market that’s worth a staggering $100bn a year worldwide — three times as much as the global film market, Atomico’s report shows. This includes 24 companies, including 11 from China and six from Europe, that have achieved a valuation of over $1bn over the last 15 years. In addition, says the report, there are at least 72 publicly-listed games companies valued at $100mn or more that collectively add up to $0.5 trillion in enterprise value.
Given the explosive growth in the sector, Romanian developers talk about the challenges of getting their games out there and capturing an audience in a market that alongside the big players is increasingly saturated by soaring numbers of releases by indie developers — from small teams with a few games under their belts to individuals creating mobile games on their home computers.
Part of the RGDA’s role has been to promote the industry, and encourage local developers to present their games at international conventions. In our interview, Per stresses the need for indie developers to promote themselves, saying that, “you can succeed if you have a viable idea and put yourself out there. But you need to put yourself out there. Romanian studios don’t always do that.”
The Carbon Incubator is helping startups by offering them its contacts and knowhow, office space next to Amber’s, and in selected cases funding of up to €50,000. It works with relatively early stage startups where, Butnariu says, “people are usually very focused on development and don’t have the time or skillset in their team to handle, for example, marketing, admin tasks and business development.” Launched in May 2016, the incubator picked five titles to support that year, which then started to release on the market through 2017.
One of these was Metagame, the developer of RPG (role-playing game) Tapbusters, where bounty hunters battle evil monsters. Co-founder Daniel Nay and another industry veteran joined up with award-winning illustrator Noper to work on their first game — a tiny team compared to the 10 or so people who typically work on a single game in big companies. Nay describes creating Tapbusters as a “difficult journey” but ultimately says having such a small team made it more cohesive and higher quality. It passed the 1mn download mark in April.
In an industry where there’s a lot of talk about passion for games and gaming, Nay takes a highly businesslike approach and stresses the need to prioritise creating something that will appeal to customers. “The idea was to make something successful, starting small with very experienced people, then get funding to make a really big Romanian game.”
The founders of KillHouse, Metagame and Sand Studios all cut their teeth at big international companies before setting up on their own. Nay cites the benefits of a background in the industry, from useful connections to the ability to organise workload. “It tends to usually be the case [that startups come from big companies],” agrees Butnariu, though he adds that “we have also seen, especially in the last two years, people who are starting out without a lot of experience at big companies. It starts to be a trend.”
On the other hand, experience at one of the big international companies, where only part of the process may be carried out in Romania, may not be enough to learn how to create and sell a successful game. Nay believes startup experience is equally valuable, as does Diaconescu, whose earlier venture into creating an outsourcing company that shut down as the crisis hit Romania in 2008 laid the ground to create Sand Studios. “I think we’ve done everything by the book this time,” he says.
There are some clear advantages to Romania as a location for indie developers. “In Romania the cost of living is not so high compared to Western Europe or the US, so it’s easier for an indie developer to survive and produce high-quality content,” says KillHouse’s Dimitrescu. At the same time, he believes Romania has world class talent; giving the example of his co-founder, he stresses that you “couldn’t find anyone better than Mihai anywhere in the world”.
But there are numerous constraints. Atomico’s report says the market’s remarkable growth has increased investor confidence, resulting in a record number of new investments into European games companies in 2016. Alongside the rapid growth is the fact that, according to Atomico, gaming is the most liquid market in tech. “At a time when the [venture capital] community has seen increasing markups, but often only on paper, games companies are more than twice as likely to achieve liquidity as [$1bn-plus] companies from other tech categories,” says the report.
Despite this, Romanian developers say getting funding can be harder than for other tech startups, as many of the traditional sources of finance for early stage companies are unfamiliar with gaming and as a result unwilling to lend to the sector.
“In Romania there are not too many investors that understand video games, even though they get the IT industry because it’s well established,” says Diaconescu. “It’s hard to get local money, you have to compete with others in international markets.” To get around the funding problem, in many cases just one or two people work full-time on a new game, using money they have saved and loans from friends and family, while other contributors stay in their day jobs until a successful launch.
Nay agrees that, “if talking about the downsides of making games in Romania, I think the biggest is still funding.” This isn’t necessarily logical, he believes, as in many ways game development is less risky than other tech sectors. “You don’t need to come up with a business model because you use the same model as any other game, so it’s not such a big gamble from that point of view. People say gaming is unpredictable, but my feeling is gaming is more predictable than any other new business, as long as you make a great game.”
The other problem cited by most of the developers I met is the lack of government support, or even understanding of the industry. The RGDA is working hard to change this, with Per citing steps such as the first Romanian country pavilion at the Gamescom 2017 convention in Cologne in 2017, and Bucharest city hall’s organisation of Bucharest Gaming Week early this year. Still, says Butnariu, the RGDA “started to engage in discussions with the government and public authorities to basically make the industry known, because right now at the public level it barely exists. The government only recently realised that within the IT sector there is this significant creative industry that has significant numbers and potential to grow.”
Diaconescu laments the fact that with only a few thousand employees the industry doesn’t have much political clout, resulting in a lack of support that in turn has led many indie developers on the verge of being successful to leave for other countries. “If they get the wind under their wings to become semi-professional they leave because they see prospects somewhere else. I don’t see the political will to address this issue. The problem is that we don’t have a vision for Bucharest or Romania in terms of making it an international hub for game development,” he says, contrasting this with Montreal, for example, which has emerged as a hotspot for the game development and wider software industry thanks to strong support from the Quebecois authorities.
Amber’s Postolache has similar criticisms. “To grow even bigger, we need the authorities to perceive us and the overall IT industry as something they should double down on, and not try to — probably unintentionally — cripple with not-so-wise financial changes. We need to be able to make plans for the next three to five years, and not just spend our time reacting to things that are thrown at us with a month’s notice,” he says, slamming the lack of policy predictability that has damaged businesses and held back investment across the economy. Recent changes to the social security system, for example, were a big slap for an industry where the largest cost is salaries. “Even if Romania has this amazing potential and talent pool, we might see companies going to other countries just because they are offered better conditions,” he warns.
But despite these drawbacks there are high hopes that the passion Romanian game developers feel for their work will translate into commercial success. Gaming didn’t get started in Romania until after the fall of communism, but the community is steadily growing, helped recently by events such as the Bucharest Gaming Week as well as the growing popularity of watching streamed video games. This is important for the industry, because developers are almost invariably players.
Passion for games and gaming was repeatedly stressed throughout the interviews I carried out. Nay, for example, talks about the atmosphere in the office space the Carbon Incubator shares with Amber as “magic… when you go for lunch everyone talks about gaming. People are passionate.”
There are also positive signs when it comes to a new generation of developers. Amber, which says it is “constantly hiring”, has reached out to universities and even to high schools to prepare people to join the industry after they graduate, explains the company’s people ops manager Ana Pohrib. Meeting 17-year-old high school students, Pohrib says, “we were quite surprised to find they are already developing their own games.”
Diaconescu also thinks there’s a very different mindset among the younger generation compared to developers who are now in their 30s or 40s. “As they come of age and start thinking about what they want to do, somehow they don’t have the same issues we have… They think: 'I’m going to make a game, make a lot of money and buy myself an island'. I think we’re going to have more people coming into the gaming industry because of countless examples of small indies who made it big.”
With the solid basis of an industry created by Ubisoft and the other major international firms, from which a growing number of local startups have emerged, Romania has the foundations for a strong indie sector. Developers are still pursuing the holy grail of a locally developed game that is successful on a global scale. One that breaks into the top 50 highest grossing games is needed, specifies Nay. “I think that with a good investment and a good team it’s definitely possible. We have the talent for it.”