Perfect Rando Su # First edition October 2023 Published by The Swedish Games Industry Research & text: Alexander Milton, Elin Carlsson, Marléne Tamlin Translation: Alexander Milton Layout: Emilie Ihre Illustration, cover: Alice Persdotter Rydberg Editor: Johanna Nylander The Swedish Games Industry is the trade organisation for video games in Sweden. The organisation represents the industry as a whole through the industry associations Spelplan-ASGD (game developers, producers, education, academia and support members) and ANGI (publishers and distributors). Dataspelsbranschen | Swedish Games Industry Magnus Ladulåsgatan 3, SE-116 35 Stockholm www.swedishgamesindustry.com Contact: [email protected]

Table: Key Figures | Key Figures | 2022 | 2021 | 2020 | 2019 | 2018 | | --- | --- | --- | --- | --- | --- | | Number of companies | 939 (+20%) | 785 (+18%) | 667 (+14%) | 586 (+14%) | 513 (+16%) | | Domestic Net sales MEUR Swedish companies | 3,058 (+13%) | 2,713 (+28%) | 2,115 (+26%) | 1,682 (+21%) | 1,393 (+3%) | | Global Net sales MEUR Swedish companies | 8,136 (+40%) | 5,805 (+75%) | 3,312 (+43%) | 2,318 (+24%) | 1,872 (+33%) | | Net sales per employee in Sweden TEUR | 362 (+6%) | 342 (+7%) | 321 (+13%) | 284 (+8%) | 262 (-10%) | | Domestic Result Swedish companies MEUR | 1,818 (+532%) | 288 (-54%) | 630 (+71%) | 369 (+35%) | 273 (-37%) | | Result in Swedish companies globally MEUR | 1,859 | -123 (-117%) | 720 (+46%) | 493 (+47%) | 335 (-25%) | | Number of employees in Sweden | 8,445 (+6%) | 7,944 (+20%) | 6,596 (+11%) | 5,925 (+11%) | 5,320 (+14%) | | Of which men | 6,429 (76,1%) | 6,169 (77,7%) | 5,186 (78,6%) | 4,699 (79%) | 4,824 (80%) | | Of which women | 1,977 (23,4%) | 1,755 (22,1%) | 1,410 (21,4%) | 1,226 (21%) | 1,036 (20%) | | Number of employees in Swedish companies abroad | 16,494 (+48%) | 11,158 (+56%) | 7,177 (+121%) | 3,253 (+25%) | 2,604 (+290%) |

# Productivity and Skills Questions were mounting for 2022. Would players around the world choose other pastimes over games after the lockdowns? Would delayed game projects lead to reduced sales? Would the problems with global value chains hit companies' finances? When we add up this year's figures, we see that these problems did not hamper the progress of Swedish game developers. More companies, more revenue, more employees, more women. It is with pleasure and not without relief that we present this year's report. The biggest challenge facing Swedish game companies is the same as before: skills. Despite the high quality of Swedish game education programmes, it does not cover the needs. Compared to other creative industries, where there are usually more people being trained than the labour market can employ, the contrast is even greater. Despite recurring investments in education, not least in higher vocational education, the need is still great. Academic education also requires investment in research, so that education can rest on a scientific basis that is relevant to games. It takes a long time for educational initiatives to have an impact on the labour market: after all, it takes two to three years to complete an education. Another way to illustrate the skills shortage, in business terms, is production capacity. The demand is there, the channels are there, the production budgets are there, and there is no lack of international attention, but production capacity is the bottleneck. Apart from recruitment, companies have different strategies to deal with this problem. Many open offices or acquire companies in other countries, which is clearly reflected in the key figures in this report. There are many more employees in Swedish companies outside of Sweden than inside. Some of these jobs could have remained in the country. In addition, which we cannot measure, this means that investments by international companies are directed to countries other than Sweden. As is so often the case, the true number is higher. In addition to subsidiaries, many companies have consultants, freelancers and not least outsourced production (or "co-dev") to companies in other countries. Another strategy is to increase productivity through new technological solutions. Recently, technological leaps with generative artificial intelligence have gained attention in the public discourse. Game companies have experienced many technological advances despite the fact that the industry is relatively young. The move from two-dimensional graphics to 3D in the 1990s. Touch screens and smartphones in the 00s. The shift from

# Foreword # Table of Contents - Key Figures 3 - Foreword - Summary 6 - Revenue and Results 8 - Highlights 10 - Employees 14 - Number of Companies 16 - Inclusion and Gender Distribution 18 - Largest Companies 22 - Company Groups and the 24 Stock Exchange - Game Developer Map – Sweden 26 - Swedish Game Companies 34 Around the Globe - Game Developer Map – Global 36 - Acquisitions and Investments 38 - World Market 40 - Game Developer Educations 44 - Entrepreneurship and National 48 Collaborations - Key Events in Swedish Game Hubs 50 - The European Games Industry 54 - No Games on a Dead Planet 56 - Threats and Challenges 62 - Methodology 64 games as a product to a service in the ‘10s. Just to name a few examples. The productivity gains in terms of technology leaps are also numerous. In the past, every game company used to develop their own game engines. Looking at the last decade, more and more have switched to standardised game engines that are used in many more games and thus have a larger user base and more resources. Asset libraries make it possible to reuse, for example, graphics from other games. Motion capture enables more realistic animations. So have the productivity gains from these technological advances led to fewer jobs? The answer is in the key figures in this report. Game development is a team effort and the raw material is creativity. There you have it: two very human skills. With the right conditions, there will be even more jobs in future Game Developer Index. Overall, companies have many ways to increase their production capacity, but they need more. Players around the world want more and better games. And they deserve it. Stockholm, October 2023 # Per Strömbäck Head of Secretariat, Swedish Games Industry

# Summary The Game Developer Index maps, reports and analyses Swedish game companies' operations and international industry trends over the past year by compiling the companies' annual reports. The Game Developer Index maps, reports and analyses Swedish game companies' operations and international industry trends over the past year by compiling the companies' annual reports. Swedish game development is an export industry that operates in a largely global market. In a few decades, the games industry has grown from a hobby for enthusiasts to a worldwide industry with cultural and economic significance. The Game Developer Index 2023 compiles the Swedish companies' latest reported financial year (2022). The report in brief: - The Swedish game industry's revenue grew to EUR 3.1 billion in 2022, which is an increase of $1 3 \%$ in Swedishregistered companies. In total, including subsidiaries abroad, the Swedish industry had a revenue of EUR 8,1 billion, an increase of $4 0 \%$ . - A total of 1,977 positions at game companies in the country are held by women, representing a share of just over $2 3 \%$ . Among new entrants to the sector, $4 4 \%$ were women. - Swedish game companies are growing, employing 8,445 people in Sweden in 2022 and 16,494 people abroad. The global increase is mainly acquisition-driven, and in Sweden 501 people were hired, an increase of $6 \%$ . - 104 companies started in 2022. These, together with 50 newly added pre-existing companies that changed their activities to game development, result in a total of 939 active companies in December 2022, an increase o $2 0 \%$ compared to 2022. - In 2022, 31 investments and acquisitions were reported, of which six had a deal value over 100 million EUR. Swedish companies were buyers in 26 of the cases and sellers in nine of the deals. - The ten most profitable companies together paid about EUR 250 million in corporate taxes on their profits. - The ten largest employers paid a total of EUR 113 million in payroll taxes. - 23 Swedish companies are listed on the stock exchange in Sweden. Together they had a revenue of EUR 5.7 billion in 2022. Game development is a growth industry. Sixteen of the companies that exist today have been around since the 1990s, but almost half of all companies have been registered in the last five years. In 2022, 104 new companies were registered. The games are launched directly on an

international market with strong growth and the supply of skills is also largely based on a global labour market. Factors that point to continued growth are more investments in regional hubs with incubators, accelerators and training programmes, more veterans starting new companies, several major game launches in the near future, and the fact that we have not yet seen the effects of the several large investments and acquisitions made in recent years. During the year, several Swedish companies celebrated anniversaries. EA DICE celebrated 30 years at the end of 2022 and both Avalanche Studios Group and King turned 20 in 2023. Swedish game developers are characterised by versatility and quality. Sweden has world-leading developers in AAA, console, PC, mobile games, VR/AR, digital distribution and specialised subcontractors. The industry's main challenges are access to expertise and capital - the latter especially in the early stages - and laws and regulations on digital markets that are out of step with its expansion. The most important future issue is diversity, both among game creators and players. In # 44% # among new recruits were women 2022, the share of women among new hires increased to $4 4 \%$ , but much work remains to be done to achieve gender equality in the industry. In the longer term, video games have all the prerequisites for diversity and inclusion: games offer an opportunity to leave your everyday life and enter worlds where only your imagination sets the limits. The number of “second-generation companies” where experienced game developers have moved on to new projects of their own, or where entrepreneurs have created their second company, continues to grow, and much of the industry’s long-term growth happens through start-ups.