On the fringe of Europe, with a vast, sparsely populated landscape, Finland is not the most obvious place to launch an ambitious video game venture. The country of 5.4 million is culturally and geographically a long way from the biggest gaming market in the world – the United States.
However, the chief executive of one Finnish firm insists on viewing this distance as an opportunity.
“From day one the idea was to go global,” said Matias Myllyrinne, CEO of Remedy Entertainment. “We’re in such a small market for games, you really don’t have a domestic market so you’re forced to go across the pond. This is a blessing in many ways and has served us fairly well.”
Indeed, the Espoo-based firm is now one of the most respected game creators in a burgeoning Finish industry that includes such success stories as Rovio Mobile, creator of Angry Birds. Remedy’s creations include the Max Payne games, which sold more than seven million copies after their release in 2001 and 2003, and the more recent Alan Wake, published by Microsoft and released to critical acclaim last year.
At just 16 years old, Remedy is one of the pioneers of a “gaming cluster” now emerging at Finland’s Otaniemi, a technology hub built on two-square kilometres by the Baltic Sea. The hub is home to 800 companies ranging from small startups to international players like Nokia. It is also the site of the newly formed Aalto University, which aims to foster innovation through the merger of three separate schools of technology, economics and art and design.
“There’s a really good ecosystem building here,” said Mr. Myllyrinne. “There’s a general positive vibe that’s forward-looking and a willingness to try different things. What comes with that is an acceptance of failure. That hasn’t always been the case in Finnish culture but failure is a necessary part of trying something risky and unprecedented. If you’re not failing enough, you’re probably not trying enough.”
Founded in 1995, Remedy emerged from the Finnish “demo” scene, a computer art and gaming subculture where members, many of them students of the Helsinki University of Technology (now part of Aalto University), tried to create the best possible digital music and graphics using their home computers. In 1996, Remedy launched its first game, Death Rally, where players compete in deadly races in which all cars are armed.
The company’s initial staff members were mostly developers, but the firm soon drew students from the area’s art and design and economics schools, as well, representing a cross section of disciplines, including architecture, writing and business. It’s all part of the “disparate organization” of game development that requires the co-operation of many specialists, Mr. Myllyrinne says.
It was also an early example of the possibilities that can emerge from the cross-pollination of seemingly unrelated disciplines and ideas, an ambition at the root of the technology hub.
“It’s a good example of high tech, because it’s really demanding to make that software but you need the creativity side, as well, and the business side to know how to commercialize it,” said Hannu Seristo, a vice-president at Aalto University. “It’s a good reflection of what we have here.”
The active collaboration and informal dialogue among members of the technology hub remains extremely important to the firm, says Mr. Myllyrinne. Remedy has worked with Aalto University and Nokia on joint programs looking at 3D graphics and artificial intelligence, the results of which are shared among the collaborators. The firm’s creators regularly welcome student groups into their offices and deliver speeches to classes at the university.
“Our people are in active dialogue – learning, speaking and sparring in various fields and areas,” Mr. Myllyrinne said.
The game industry is cyclical, requiring huge investments and long periods of development before any returns are realized. In its early days, state loans from Tekes, the Finnish funding agency for technology and innovation (a major sponsor of various Otaniemi ventures) were vital to Remedy.
Nevertheless, Remedy’s determination to focus intently on the development of one game at a time has paid off. In 2002 it sold the intellectual property rights to Max Payne for $43-million. Its staff has grown from 19 people in 1999 to about 50 people today and will likely expand by another 20 or 30 employees by the end of next year. And it recently jumped into mobile gaming, working with another Finnish firm to release Death Rally on Apple’s iPhone. The game has 2.5 million users and earned its development costs back in just three days.
Remedy, known for games with sleek production values akin to Hollywood blockbusters, will continue to pursue these shorter-term projects as new devices expand the world of gameplay, Mr. Myllyrinne said. It will also work to evolve its games into brands with parallel products, including movies, animation, and merchandising. The games have already enjoyed success in other mediums: Shortly after Remedy sold the rights to Max Payne, it was turned into a film starring Mark Wahlberg and Mila Kunis.
“I think Death Rally this year proved we can very much bring those production values to smaller platforms as well,” said Mr. Myllyrinne.
North America remains the most significant market for the kinds of games Remedy creates. Indeed, a recent study commissioned by Tekes found that 55 to 60 per cent of all Finnish gaming revenue is drawn from this region, with 30 to 35 per cent drawn from Western Europe. Still, Remedy has no plans to leave Finland’s flourishing gaming community.
“If you look at the German and French markets, they had a mixed blessing because they had a domestic market for which they could create games,” said Myllyrinne. “But if you learn to cater to a local market and all of a sudden you need to create a bigger blockbuster and worldwide products, well, it gets harder to tap into that worldwide market. And being smaller countries, we’re used to looking outside, as well; we’re quite in touch with North American popular culture.”
Special to The Globe and Mail
From Finland, with love
With limited natural resources and a small domestic market, Finland has placed a strong emphasis on developing knowledge-intensive industries.
The early success of Finnish mobile giant Nokia notwithstanding, “we desperately need ambitious, globally growing companies in this country,” says Hannu Seristo, a vice-president at the newly-formed Aalto University.
“Along with doing scientific research work we try to help that as much as we can,” said Mr. Seristo. “Student ideas are commercialized as much possible. It’s good for the country.”
By merging three individual universities - the Helsinki School of Economics, University of Art and Design Helsinki and the Helsinki University of Technology – Aalto University hopes to spur innovation through multidisciplinary education and research. Founded in January, 2010, the university is an anchor tenant of the Otaniemi technology hub, located in Espoo, about eight kilometres from Helsinki.
The university actively partners with private firms, providing three multidisciplinary “factories” - physical spaces for collaboration between companies, researchers and students working on product development and solutions. It consciously pursues international connections, as well, recently opening a design factory at Shanghai’s Tongji University and offering a double degree in international design business management, in which students study in both China and Finland.
The university’s Centre for Entrepreneurship focuses on commercialization and start-up services, coaching entrepreneurs at the “pre-incubation” level to develop business plans and patents. The centre also offers early funding and works closely with business incubators in the area to foster further development.