Unleashing the Potential of Portugal's Gaming Industry

Portugal's gaming industry had a notable presence at the recent GDC, with over 50 delegates from 20 companies in attendance, 14 companies represented at the country's pavilion, and a reception at the Consulate General of Portugal that drew over 100 attendees. This reflects the country's upward trend in the industry over the past few years, further highlighted by the launch of the Gaming Hub in Lisbon, a games-specific co-working space. According to Diogo Rato, executive director of the Portuguese Game Developer Association, the hub aims to be a focal point for innovation, collaboration, and growth within the gaming industry in Portugal and beyond. In an interview, Rato provided more insights into the impressive growth trajectory of the industry, citing official public data that shows a year-over-year increase of over 20% in the number of studios since 2010, and a 33% increase since 2018. Revenue has seen an even more significant rise, with a compound annual growth rate (CAGR) of 41% since 2010 and 63% since 2018, reaching a turnover of over €38 million in 2022. The number of people working in the game industry has grown by approximately 53% each year since 2018. Portugal's roots in game development date back to the '80s, with notable examples including Elifoot, one of the first football management games, developed for the ZX Spectrum. However, it was after 2005 that new games started being released every year, such as Toy Shop Tycoon by Seed Studios and Hysteria Hospital: Emergency Ward by Camel Entertainment. The establishment of Miniclip in the country in 2010, ahead of the release of 8 Ball Pool, had a lasting impact on the Portuguese gaming industry. An increased number of professional developers set up in the country in the first half of the 2010s, contributing to games like Seed Studios' Under Siege, MotoGP 13 by Bigmoon Entertainment (now Saber Interactive Porto), and Quest of Dungeons by Upfall Studios. Since 2018, Portugal has experienced unprecedented growth and innovation in the gaming sector, with notable releases, studio acquisitions, and workforce expansion. Examples include Doppio, which started developing voice-activated and narrative games in 2018 and received investment from companies like Amazon and Google, and AR-focused studio OnTop, which also opened its doors in 2018. In 2019, Funcom acquired Lisbon-based studio ZPX, with which it had previously collaborated on Conan Exiles, and Saber Interactive acquired Bigmoon. In 2022, Miniclip moved to a new office with a team of 350 employees, making it the company's largest operation among 17 global locations. Around the same time, Kwalee opened a global office in Almada, and Testronic opened a studio in Lisbon. The Portuguese gaming industry is diverse, comprising not only game developers but also game tools providers like Didimo, Anybrain, and Sound Particles. Rato notes that although the industry is not yet as established as its European counterparts, it has grown impressively in recent years while remaining heterogeneous. Factors contributing to this growth include Portugal's establishment as a tech hub for startups in Europe, its high quality of life, English proficiency, and the quality and number of engineering graduates. These aspects provide a strong foundation for attracting talent and establishing new game studios in Portugal. The country also offers an entry point to the European market for other Portuguese-speaking countries, representing around 260 million people. In engineering, Portugal had over 17,000 graduates in 2022, although the industry faces challenges like the scarcity of senior game developers. The Portuguese government offers some support, including grants and subsidies for hiring young graduates and a tax credit of up to 80% for R&D expenses. However, game developers in Portugal lack public fiscal or financial incentives specifically tailored to support game development productions, unlike some other European Union member states. Rato emphasizes the need for such incentives to attract senior talent and for tax credits to enable Portuguese producers to offer competitive salaries. The APVP is engaged with local administration to explore the implementation of these incentives. Typical challenges present in many European sectors, including taxation, are also being addressed through collective efforts. Education courses covering game production, game AI, digital art, game programming, sound, and multimedia are available, but there is an opportunity to enhance the practical aspects of these courses to better prepare students for the industry. The APVP aims to create a better environment for game developers, having identified the strengths and weaknesses of the ecosystem and provided policymakers with necessary evidence to create better conditions for companies in Portugal. The opening of the Gaming Hub in Lisbon is a step towards tackling some of these challenges, hosting several gatherings since its launch. The hub is designed to facilitate the scaling and creation of synergies between mentors, investors, and companies in the sector, with 12 private rooms and 12 coworking spaces. It is not just a physical space but a catalyst for growth, bringing together talented game developers and fostering collaboration. Looking ahead, Portugal's rich culture represents exciting prospects for the gaming industry, with game development education at universities expected to lead to a fresh wave of skilled young talent. With the increasing number of companies contributing to the ecosystem, more businesses are expected to set up studios and establish new headquarters in the country. Efforts by the APVP, in collaboration with other entities, to organize and host B2B events highlight the vibrancy of the community. Initiatives like DevGAMM in Lisbon, Gamiberica's first edition in Porto, and Websummit's gaming side event demonstrate the industry's growth and potential for further expansion. Regular meetups in Lisbon and Porto contribute to creating a thriving environment for the industry to grow. In conclusion, Portugal's video game industry has witnessed significant market growth, from a total turnover of €5.5 million in 2018 to close to €39 million in 2022, underscoring the industry's resilience and the country's dedicated efforts to expand in the video game sector.