Today's Paper Latest Coronavirus The Article iPad Core Values Weather Newsletters Obits Puzzles Archive Story ideas

Game on for video firms in E. Europe

Business booming in covid lockdown by JAMES M. GOMEZ, LENKA PONIKELSKA AND KONRAD KRASUSKI BLOOMBERG NEWS | September 13, 2020 at 2:20 a.m.

Shutting people indoors is working out well for what's turned into one of Eastern Europe's growth industries.

Video gaming has boomed as workers stayed home because of the coronavirus pandemic. Since March, the number of players globally has jumped 30%, according to Bloomberg Intelligence data. It's now a $156 billion industry with little sign of slowing as covid-19 cases surge again.

The chunk of that market is just $4.2 billion for designers and developers in Poland, the Czech Republic and other former communist states, yet they are having a bigger impact locally and looking to capitalize on the moment.

The biggest stock in Warsaw's benchmark index is CD Project SA, which produces "The Witcher." Its shares are up more than 50% this year and it's now the most valuable company of its kind in Europe.

Huuuge Inc., a developer of free-to-play mobile games mainly based in Poland, filed a prospectus for an initial public offering on Aug. 31. The People Can Fly studio that worked with Epic Games Inc. on "Fortnite" is now seeking to employ more than 100 new people.

Czech company Bohemian Interactive, which has sold 3 million copies of its best-selling "Arma 3" game, is also aiming to sell shares for the first time as sales have soared this year, Chief Executive Officer Marek Spanel said in an emailed response to Bloomberg questions.

[CORONAVIRUS: Click here for our complete coverage »]

Other have been snapped up by international companies. Beat Games s.r.o., the Czech creator of "Beat Saber," was bought last year by Facebook Inc., while Warhorse Studios s.r.o., the developer of the "Kingdom Come" series, is controlled by Koch Media GmbH's Deep Silver label.

"If you are in Poland or a game maker in the Czech Republic, you can now put the game on a platform and anyone anywhere in the world can buy it," said Matthew Kanterman, a Hong Kong-based BI analyst . "From that perspective, it's really easy for these companies to have a global presence and punch above their weight class."

Indeed, games developed in the region have a worldwide footprint. As the pandemic took hold in the U.S. in March, Star Wars fan Toni Moore took to the Beat Saber virtual-reality video game, which hurls red and blue electronic bricks at saber-wielding players to the beat of pop music. It was the first VR game in the world to top 1 million users.

Then, after a summer resurgence of covid cases closed her cosmetology school for a second time, the 36-year-old mother found herself again wielding her Beat Saber between juggling child-care duties and online-classes.

"When the whole state was shut down in March and April, I played a whole lot, I just had to," Moore said in a video call from her home in West Point, Utah, after a fellow student tested positive. "Right now I'm quarantined again."

The pandemic has also thrown up challenges for games producers as well as players. Even as the largest companies enjoy brisk growth, it's harder for smaller, more niche companies scrambling for financing because of shuttered trade shows, an important venue for raising venture capital investment.

A typical video game can take years to build and perfect, using dozens of developers, coders, musicians and graphic artists to roll out a finished product.

Unlike in Poland, some smaller Czech makers may find it harder to survive, even with improved global demand, according to Pavel Barak, the chairman of the Czech Game Developers Association. The lockdown also has hobbled the kind of collaboration that occurs best face-to-face.

"The access to capital is a problem," Barak said. "It's just harder for them to find investors. Startups looking for investments can be in trouble, and for them it can be a pretty bad situation."


Sponsor Content