When people talk about Iceland’s resources, it’s typically regarding fish, geothermal power and the landscapes that attract hundreds of thousands of tourists every year. Sadly missing from this conversation is the one resource that has been consistently going strong, even in times of crisis, and is not likely to be ever depleted. That is, imagination. When it comes to the creative fields, Icelanders have an undeniably high output of exports. A particularly telling case is CCP Games, one of the country’s most successful companies across the board.
Founded in 1997 for the sole purpose of making massive multiplayer online roleplaying games (MMORPGs), CCP’s flagship product is the sprawling sci-fi game EVE Online, a game that not only permits but also encourages theft, piracy, extortion and “griefing”—the act of more experienced players attacking those new to the game within limits.
Why it thrives despite the crash
EVE Online’s libertarian and meticulously detailed space pirate universe is a large part of what attracts people to the game and why CCP continues to grow, weathering the financial crisis of autumn 2008 with barely a scratch.
“EVE Online has grown consistently every year since it was released,” CEO of CCP Games Hilmar Veigar Pétursson tells us. “It is quite resilient to the ups and downs of the world’s economy, and entertainment propositions have historically proven quite counter cyclical.”
Senior writer at the company Gauti Friðriksson says one key to the company’s success is the fact that the internet is everywhere. “The vast majority of CCP’s profits come from outside the country,” he says. “So the economic recession at home didn’t quite affect us the same way it did most local companies. I think any business that emphasises international profits, due to having a wider geographical spread of income, is likely to be more resistant to localised crises.”
Adding to this point, software engineer Unnar Steinn Sigtryggsson says, “Our income is in Euros, dollars and now pound sterling as well so it probably weathers the fluctuations of the ISK better than if our revenue were in ISK.”
Embarking on the warpath
This is not to say that the company has been without its troubles. In late 2011, the company decided it had been stretching its resources a little too thin, and decided to do some restructuring—a neutral-sounding word that nonetheless usually means people are going to be fired—resulting in 20% of its global staff being let go.
“Last year we indeed reprioritised our efforts, which resulted in people being moved around and there was also an overall reduction in our work force,” Hilmar says. “This was a difficult decision to make, but also the right one for the company. We now have around 500 people in our offices around the world working on continued growth for EVE Online, getting [newly developed console game] ‘DUST 514’ to market this year and the [online roleplaying game] ‘World Of Darkness’ project to market in the future.”
Almost a year later, in August 2012, CCP gathered its forces and went on the warpath. Tech Crunch reported that the company raised some 20 million USD in new funding, mostly through domestic sources and there were even some whispers of an IPO.
But why the push for cash, especially ten months after significantly downsizing the company? CCP President Hilmar Pétursson says it comes down to DUST 514. “With the launch of our second product on the horizon, we felt this was the right time to increase our capital and strengthen our balance sheet,” Hilmar says. “These funds will be used to support a stronger marketing campaign for DUST 514, add additional hardware and capabilities to our backend server system, and for general corporate purposes supporting our continued growth.”
As for the IPO talk, it seems it’s farther off than implied. “We do not have any immediate plans to go public,” Hilmar says. “But we are working towards IPO readiness so if the time comes when it makes sense for us then our internal operations will be ready for it.”
Welcoming competition in the field
One of the biggest problems with large companies in Iceland—for competitors and consumers alike—is a distinct lack of competition. When one company emerges as a giant in a particular field, smaller companies can be either absorbed or edged out, and consumers are left with few choices. This, again, is something that CCP Games has managed to avoid, due in part to their presence on a global rather than solely local stage.
“We compete in a global market and don’t really regard other Icelandic companies as competition,” Hilmar says. “And in fact we try to help others as best we can with advice and connections. The only competition really is for great people, and we believe that more high-tech companies in Iceland means a bigger pool of skilled and experienced people, and that is a good thing for everyone.”
Marketing manager Eldar Ástþórsson agrees. “I find the atmosphere within this sector here in Iceland really friendly,” he says. “People and companies support and help each other rather than look at each other as competitors. And I do think if we would have more successful companies here in Iceland within the tech and video game industry, it would not only benefit CCP, but the creative industry in Iceland as a whole.”
Gauti agrees, pointing out the different emerging tech fields that Icelanders are engaging in. “Icelanders have a long-standing reputation for innovation,” he says. “And I think that holds as true in the tech sector as it does elsewhere. I know of several people engaged in tremendously exciting projects in all spheres of the technology constellation. Web development tools, data security, music distribution models, digital forensics, brainwave headsets—the list goes on. There is a lot of superb talent out there, working hard to put genuinely new things into the world.”
Adds Unnar: “We are considered a niche game on the global market, so we have little competition there. Still, there is ample room for more tech based, even computer game making, companies here in Iceland.”
Fears a dearth of local talent
When it comes to the future of Iceland’s tech industry, Unnar fears that a lack of talent might be the roadblock. “In my time at CCP alone I’ve seen many new companies start up and get favourable mentions here and there. But I worry about the sustainability of this growth as companies will start to have to look abroad for new talent. They might not be in the same ‘established in the industry’ position CCP is in and so ‘move to Iceland’ might become a harder sell.”
This is a fair point. CCP Games pays its employees in Euros. For Icelanders, this is an attractive selling point. For Europeans, the sole difference it makes is location. If Iceland’s pool of those eager to work in the tech field shrinks or becomes static, bringing in talent from abroad will become more important, and the lure to live in Iceland could take more effort.
Nonetheless, the general consensus at the company seems to be one of optimism where Iceland’s tech industry is concerned. “The Icelandic tech industry is growing for sure,” Hilmar says. “I see signs of it happening all over. Ultimately, what will allow it to thrive even more is educated people, either Icelanders educating themselves or companies bringing skilled and experienced talent into the country.”
Gauti as well is optimistic, which he attributes in part to the national character. “The Icelandic ambition for creative enterprise is sharp and resilient.”
Upcoming Projects For CCP:
A free FPS for PlayStation 3 wherein console gamers and PC gamers are able to share the same universe for the first time in gaming history. EVE is a PC game—it can be played on any computer that has the hardware to run it. DUST 514, however, is a console game, made specifically for the PlayStation 3. While traditionally PC gamers and console gamers occupy two separate worlds of gaming, CCP has allowed these two different gamers to share the same space in the EVE universe. This game is due to be released this year.
World Of Darkness
An online supernatural horror-based roleplaying game. This game dates back before the millennium, but in 2006, a merger took place between CCP and World of Darkness’s publisher, White Wolf Publishing. At that time, CCP announced plans to turn World of Darkness into an MMORPG. Although the development staff was reduced last October during the re-structuring, there are still developers actively working on the game, which doesn’t have a scheduled release date as of yet.
More info can be found at www.ccpgames.com
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