Italy consumes video games for 2.17 billion euros and produces 80-90 million euros. In this fork there is a piece of photography of an industry that did not stop in the year of the lockdown but continues to struggle to make a qualitative leap. This is the first conclusion that emerges from the new census of Italian game developers presented today by Iidea (Italian Interactive Digital Enterainment Association), the trade association of the video game industry. This is the fifth census carried out after the previous editions of 2011, 2014, 2016 and 2018. The quantitative survey was conducted through an online questionnaire, active from 24 February to 1 April 2021. 160 responses to the Census were received, among the respondents we can count over 90 collective video game development companies and over 60 sole proprietorships, freelancers and other organizational forms.
Small numbers of an industry with ample room for growth
If we wanted to see only the glass half full we could say that in two complicated years like the last something has moved. The professionals employed in the production of video games in Italy are over 1600, compared to 1100 in 2018. The number of companies with over 500 thousand euros in annual turnover and with over 20 employees. That six out of ten companies plan to hire new staff over the next two years. And that business demographics have not been severe with as many as 70% of companies surviving in the past four years. «We are still small as an industry – commented Luisa Bixio, CEO of Milestone during the online conference -. If we look outside Italy we realize that we could be ten times bigger both in terms of employment and business. I firmly believe that Italian developers are as good as and perhaps more than other European countries. This is demonstrated by the fact that we have grown up even in difficult conditions. What has been lacking is the correct perception of the video game ».
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Impact of Covid-19 on the sector.
As a negative effect of the pandemic, businesses, according to the census, mainly reported delays in closing contracts with publishers, investors and partners and in carrying out projects. For most companies, remote working has had no or positive effect on the business and nearly 70% of them will continue to use this way of working in the future. The sector has shown a great ability to adapt to the restrictions imposed by the health emergency and a high level of flexibility in the workforce.
The perspectives of Italian independent developers
There has therefore been a growth in size. If two years ago eight out of ten were micro-enterprises with marginal turnover, now one third of enterprises falls within the definition of SMEs (+10 employees) and one fifth has more than 20 employees. What is wrong is the context which has improved but not enough. We recall the recent introduction of the “First Playable Fund” which is judged by the association “a step in the right direction” but the first round of financing has not yet started and the measure needs to be refinanced on a multi-year basis (at least 5 years) and strengthened , on the basis of what has been done by other European countries, with an allocation of resources of at least € 10 million per year. Or even the tax credit for the production of video games introduced in the «Cinema Law», but never implemented due to the lack of the related implementing decree by the Ministry of Culture (MIC). The attention of politics seems to have increased, more benevolent than the reluctance of recent years towards the videogame intended as a cultural product but therefore the impression is that we prefer to favor more traditional entertainment markets. What is missing here is an investment ecosystem comparable to that of digital startups. The vast majority of companies still use their own capital to finance their business (93% vs 88% in 2018).
The managerial quality of the little ones
But most of all, a trigger is needed to unleash an entrepreneurial and managerial ability that this new class of game designers lacks. The feeling is that to make the leap forward you need unicorns to use a term typical of startups, national champions capable of breaking into international markets. Entrepreneurial skills are therefore needed to overcome the small “digital craftsmanship” dimension. The same goes for startups. However, today at least in Italy they enjoy ad hoc legislation. Therefore, the greatest risk that this market can run is that of being content with remaining “very” Italian.