Insights and Best Practices on Scaling up Video Game Companies

Key insights

7 takeaways

01
The study identifies eight success factors for videogame scale-ups, grouped into internal factors and external factors shaped by the environment.See it on page 5
02
Videogame scale-ups are described as achieving growth rates that the study says pale other sectors' high-growth benchmarks, which it attributes to digital distribution.See it on page 8
03
The authors state that most programs examined have minimum eligibility requirements, and some require a game to have launched and be generating revenue.See it on page 26
04
The study reports that programs are generally fixed term, ranging from 3 to 18 months.See it on page 31
05
The authors note research indicating that companies using external finance grow more rapidly than those that do not.See it on page 17
06
The study reports that the Bpi France Video Games Accelerator had a first cohort of 20 video game companies with on average 21 employees.See it on page 22
07
The authors state that programs' impact measurement focuses on short-term measurable results, while the greatest impact may be the internal transformation of companies, which is reported anecdotally.See it on page 28

Summary

Prepared for Interactive Ontario, funded by Ontario Creates and submitted by Communications MDR in October 2022, this study examines how video game companies scale up. It combines an international literature review covering eight accelerator and scale-up programs in the UK, France, Germany, Finland, Sweden, Denmark and Singapore, 13 key informant interviews with program administrators and Canadian scale-up executives, and case studies of five Canadian video game scale-ups: Big Blue Bubble, Digital Extremes, East Side Games, Phoenix Labs and Behaviour Interactive. The study notes limitations, including limited literature specific to videogame scale-ups and few programs aimed at them.

The authors identify eight success factors shared by the five companies, including experienced founders, product-market fit, a scalable Games-as-a-Service business model, and access to capital and talent. They report that the Canadian scale-ups accessed tax credits, project funding, venture and angel investment, and revenues from self-publishing. Several companies also made acquisitions or accepted strategic investments from other game companies.

The program review found that most programs focus on high-potential companies, work with highly motivated founders, and provide business training, mentoring and peer-to-peer support. Impact is mostly measured through immediate, measurable outcomes, with the internal transformation of companies described as the most important but mostly anecdotal measure.