Challenges to growing New Yorkâ??s video game industry include too few technical workers, limited academic infrastructure and the lack of one signature company


As much promise as the video game sector holds for New York, the city faces a number of challenges in capturing a larger share of the industry’s future growth. Some obstacles are specific to the industry, most notably attracting and retaining the specialized workforce that video game development companies need. The city doesn’t have a critical mass of video game companies, a problem that makes it difficult for New York firms to recruit talented programmers and creative staff. Others are common for any aspiring business in the five boroughs, like the high cost of office space. Insufficient support from academia and government are also factors: the city’s universities come up short in offering a broad range of video game programs, and both city and state economic development divisions have all but ignored this burgeoning sector.

Ask most people what you need to make a video game, and they would point to the designers who dream up the concept, the artists who draw the characters and the producers who help get the game to the mass market. But the technical workers who toil behind the scenes are the ones who can really make or break a game. High-tech meccas like Seattle and the Bay Area have an abundance of these workers; New York City does not.

A third of the companies that responded to our survey said that the lack of experienced technical talent was among their greatest challenges. “I trip over three or four 3-d artists on my way to work every day, but I can’t find a good mathematician to save my life,” says Templar’s Peter Mack. The city has a modest pool of skilled technical workers, some of whom are avid gamers. But most of them opt to work for financial companies or ad agencies that pay considerably higher salaries than the city’s small and mid-sized gaming companies can afford. “New York has a huge numer of programmers but they’re almost all doing large back-end systems for financial companies and paid for Wall Street scale, which they’re not going to receive if they go off and do games,” says Greg Costikyan, CEO of Manifesto Games.

Video game companies in the city not only have a difficult time competing with financial services firms for the technical workers who are already based here, they also struggle to recruit experienced programmers from other parts of the country who actually want to work at game companies. The relatively small size of the city’s video game sector often deters these workers. For instance, if a programmer leaves Seattle or San Francisco to work for a small firm in New York, and it goes out of business or doesn’t produce a hit title, there are few places in the five boroughs to fall back on. In other cities, employees have their pick of working for small firms or heavyweights like EA and Sony.

This shortage of technical talent can scare off investors as well. “One of the big issues that has always plagued people in New York was the lack of an ecosystem of people and talent here,” says Bernard Yee, a longtime game developer and entrepreneur. “So if we go to a publisher or a venture capital group and say we want to build a triple A [console] game, they’ll say: ‘where are you going to find people? There’s no one to recruit, unlike in Austin and the Bay Area and Los Angeles.’ They’re concerned about the ability to find the talent or convince people to move to New York.”

New York’s universities now offer more video- game-related programs than ever before. But compared to other areas, these efforts are small and there isn’t much of a pipeline to connect talented students with local companies. The curriculum is also heavily weighted towards the creative side of game development, rather than the technical programming skills that the industry desperately needs. None offer a specific degree in game programming, a gap that many we spoke with believe inhibits New York’s potential to grow the sector.

Parsons the New School for Design stands out as the leader of the pack, with a strong mix of programs and a slew of local industry heavyweights on the faculty. Colleen Macklin, chair of the department of communications design + technology at Parsons, says that in 2003, about 10 percent of their graduates did thesis projects in gaming. By 2007, at least 15 percent of students in the graduate program and 20 percent in the undergraduate program had developed a game-oriented thesis.

Other universities also offer relevant programs and classes, and their graduates can be found peppered throughout New York’s game industry. Columbia’s department of computer science offers video game classes and teachers college houses the Games Research Lab, which studies the intersection of games and education. NYU’s school of Continuing and Professional Studies grants an M.S. in Digital Imaging and Design and the university’s Interactive Telecommunications Program offers some game classes. NYU is also in the early stages of developing an interdisciplinary gaming center, which will be initially housed at the Tisch school of the Arts. Hunter College’s Tiltfactor laboratory, focuses on socially-responsible games, and the School of Visual Arts and Polytechnic University have also offered some game courses.

Despite these positive developments, New York’s university system falls short when compared to other regions. Schools like UCLA and Carnegie-Mellon are the gold standard, investing heavily in video gaming curricula and serving as strong feeders into the local game industry. Boston is a good example of a robust university gaming cluster: the Massachusetts Institute of Technology has world-renowned technical expertise, Worcester Polytechnic Institute offers an excellent game development major, and Harvard’s game development club has several hundred members.

New York has two key ingredients for a robust game sector—an abundance of creative professionals and a world-class entertainment industry. But the city hasn’t yet leveraged these strengths into a critical mass of game companies.

While 30 game development companies in the five boroughs is a vast improvement from just a few years ago, the industry still isn’t quite large enough to grant New York standing as a major player in north America’s gaming sector. And since most of the firms here are small—only one has more than 100 employees, and just a few have more than 30—fewer opportunities exist for skilled workers who wish to pursue gaming careers. As a result, many talented programmers and game developers don’t even consider staying in New York. “there aren’t enough companies [here] with game design positions,” says Katie Salen, a game designer and associate professor at Parsons. “We’re graduating more students than there is available work.”

The presence of one large game development shop has been a great boost to the success of other regions in achieving a critical mass of video game firms. Having one of these large companies not only provides hundreds or thousands of job opportunities for individuals interested in working on games; it also typically creates a spigot for new companies, since many new video game firms are started by individuals who get tired of working at a big company and want to start their own venture. This “gaming ecosystem” offers a safety net for developers—if they splinter off and form their own studio, and it goes under, they can usually fall back on a job at the larger companies.

Economic developers elsewhere have been able to create this ecosystem, virtually from scratch. A decade ago, Montreal had no game industry to speak of until the local government began offering video game companies generous tax incentives. Ubisoft, a major French game company, quickly moved their headquarters to Montreal. A number of small companies began forming nearby, and in 2004, California-based EA decided to set up a sizable office in the city, cementing its status as a gaming hub. Montreal now has more than 50 game development companies employing nearly 4,000 workers.

New York City’s largest game studios—Take-Two Interactive/Rockstar’s headquarters, with a staff of 250 and Kaos studios/THQ with 90 employees—are considerably more modest than the industry behemoths. Accordingly, it has been more difficult for firms here to attract talent and create a strong gaming community where designers can work at larger companies, start their own businesses, and move around between a number of different shops. A handful of new companies have spun out of other ones, but that has been more the exception than the rule.
“New York still hasn’t had a really big center that has generated lots and lots of companies, either from a school or from an individual company, and I think that’s going to be the break point for New York,” says Rebel Monkey’s Nick Fortugno. “When there’s a company that gets big enough that it can then start supporting other game companies in New York, that’s when i think there will be a real sea change in the way New York functions.”

Another barrier to the growth of New York’s video game industry is the high cost of doing business in the city. In fact, 35 percent of the video game companies that responded to our survey cited high costs as one of their greatest challenges; no other problem was mentioned by as many respondents.

Many of the companies singled out the city’s high rents and lack of affordable office space, a problem familiar to small-and medium-sized businesses in other industries in New York. These expenses can be particularly tough for gaming companies that are trying to start out or grow but don’t have venture capital financing or the backing of a corporate parent.

Video game companies need little more than an open space with room for computers and creativity, but New York’s skyrocketing commercial real estate costs mean that gaming companies often have to scramble to find affordable space or operate the company virtually, a decision that requires holding staff meetings in a local Starbucks or the founder’s apartment. While that can work for a short while, any business trying to get to the next level won’t be able to grow in a meaningful way if they can’t find a space to set up shop.

But the high costs that threaten New York’s burgeoning game industry go beyond real estate. Game companies struggle to defray the area’s high cost of living for themselves and their employees, shelling out big bucks for expensive insurance costs and competitive salaries to attract and retain talented workers. Many companies are keenly aware that New York’s real estate costs are off the charts and can rattle off the lower prices of commercial real estate in other gaming hubs without missing a beat. A number of video game companies said that costs could drive them out of New York, and those who reported a commitment to staying in the city said it was largely family ties that kept them here.

No one feels the cost pinch more than start-up companies. Dave Gilbert is seeing sales grow for his one-man company, Wadjet Eye Games, and while he thrives on New York’s creative energy, he has entertained leaving the city, purely due to rising costs. “the biggest problem is how expensive it is to live here,” he says. “I thought many times of renting out my apartment and going to live near my friends in Texas, where I could pay rent and eat and live reasonably well. And here I live in a one room studio in the east Village and barely make my mortgage every month. It’s really tough.”

This is a slightly edited version of the Getting in the Game published by the New York Center for an Urban Future. You can download the original version in PDF format here.

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