Insight

Great Potential but Game Changer Needed

The video games industry could be Malta’s next creative industry but it will take time to build up a deep talent pool, says Dean Sharpe, CEO of 4A Games.


Can you outline the roots of the company?

The studio was established in 2005 in Ukraine by experienced game industry professionals. The aim was to create premium quality games for consoles and PCs. We are the franchise developer for the Metro series, and have recently also released ARKTIKA.1, which is a highly immersive AAA, action-packed, first person shooter designed for Oculus Touch. In 2014, we moved our headquarters to Malta, but a studio still exists in Kiev. It took a number of years to plan the relocation – given that it is not easy to relocate an entire studio, as well as our staff and their families. When tensions between Russia and Ukraine escalated in 2014, we thought it was the right time to move forward with our plans. The conflict wasn’t the main reason, it was more that we found it increasingly difficult to attract talent to Ukraine as it is not an easy place to live if one doesn’t speak Ukrainian or Russian.


Why did you decide to relocate to Malta?

We had looked into a few other locations. We were considering Montenegro but the telecoms infrastructure was not very strong. Then we thought about Lithuania. The authorities there actually offered us a very attractive package, including cash grants and residency permits. But the country was not very interesting from a quality of life perspective. One day, out of the blue, one of my business contacts from the US contacted me and asked me if I wanted to open a studio somewhere else, and I told him ‘yes I am actually looking into it’. He mentioned Malta, I did not even know where Malta was, so I googled it. It looked like a tiny dot in the middle of nowhere, but I liked what I read and was being told about Malta. There was a strong will to attract video-gaming companies, and besides us, a number of other companies have opened studios on the island. Most of these companies are active in the free-to-play segment, and there are also some start-ups working on interesting projects that could develop into something big. However, Malta’s video-gaming scene could be much bigger if the island was to put the right incentives in place.

 


What would you highlight as the main reasons why the video-gaming industry has yet to take off in Malta?

A key problem is lack of knowledge; the authorities simply don’t know what is involved in running a games studio. But the biggest problem is that they don’t understand the level of commitment that is required to create an eco-system that would provide sufficient talent. Game development is a highly technical industry, which requires very specific skills. At the moment, the growth of this sector is held back by a lack of senior talent. But growing this pool of expert talent will also take time – probably around 10 years. For instance, students that study at universities with established gaming-related degree courses in other countries are still at the very bottom of the career ladder when they complete their course. They need to learn so many more things, and it will take at least two years of on-the job-training before they will be able to deliver anything of value to us.


The Malta College of Arts, Science and Technology (MCAST) offers a course to those interested in a career in gaming. What’s your take on it?

I find their curriculum way too detailed. In this industry, specialisation is very important, and the required skills cannot be obtained in a three-year course that tries to cover every aspect of the industry. In my opinion, Malta should look into developing a co-operation with one of the well-known gaming schools. This would allow students to follow an established curriculum, while lecturers could be flown in. 


How do you rise to the challenge of recruiting and retaining your top employees?

We have 67 people in Malta, but we should be close to 85, so we are understaffed. Then there are close to 100 people in the Ukraine office. In addition, we work with around 500 freelancers across the globe. As I already mentioned, we thought that the move to Malta would make it easier to attract talent, but this is not always the case. Sometimes employees simply miss the support of their families and return home. Then there is the issue of rising costs, and in particular property prices. We have already considered setting up a fund to support employees to purchase a property, in order to guarantee that they can get a loan, given that it’s so difficult at the moment to get one from the local banks.

 

 


In your opinion, are there any similarities between the iGaming and the video-gaming industry, and is there anything that the two industries could learn from each other?

In my opinion, there aren’t many similarities. There is a little bit of cross-over in terms of eSports, but eSports competitions are just based on products that the video-gaming industry develops. When it comes to production quality, the video-gaming industry is way ahead of the iGaming industry. I do see a desire to up production values in the iGaming industry, and they could look to the video-gaming industry for inspiration.


In terms of infrastructure and facilities, what could be developed in Malta to grow the cluster?

Malta should consider setting up a motion capture studio, which could be used by the video-gaming and the film industries. We currently have to use facilities in the UK. I also believe there is great potential for game testing and localisation in Malta. Many of our employees originally started as testers. This gives someone with entry level skills a place to be productive immediately while at the same time learning what is really involved in the day-to-day development of a video game. For example, currently we do much of our testing in Poland and India due to the low cost of living in those places, and I think this is an area in which Malta could compete. In addition, to establishing industry-specific facilities, it would help us if we see some improvements in terms of Malta’s telecoms infrastructure; bandwidth in Malta is more expensive than elsewhere in Europe.

But more important than infrastructure is that Malta comes up with a new incentive package if it wants to attract more companies. Game developer studios are not necessarily profit-making companies, so tax credits are not really of interest to us. If we make more money, we just pay our people more. We usually require cash for the development process. When we negotiate a deal with a publisher, we negotiate it at the beginning of the project. We calculate our budget and need to plan ahead for the entire development process, which usually takes about three to four years. That’s also why rapid price rises – like the ones we are currently experiencing in Malta – are affecting us so badly.

 

Considering all the challenges, what are 4A Games plans for the future?

I don’t see us leaving Malta. Despite all the challenges we are facing, Malta also has many positives. Just the fact that English is one of the official languages makes a big difference. We also find that the authorities are very accessible and willing to help. They were quick to resolve some of the issues we had in the past, for instance the time it took to obtain work permits. This process has been sped up significantly. We are also ready to engage with the government. Malta has the potential to build up a great cluster of video-gaming companies, and we would like to shape the future together.

On a company level, we might look at going more into self-publishing. I don’t think we will change our entire business model but self-publishing could become a part of it.

 

Dean Sharpe is the CEO of 4A Games. He was born in Detroit, Michigan in the USA, and started his career in the 1980s with video game company LucasArts. He ran his own games development studio for many years before moving to Ukraine in 2004 to work on a project on behalf of video game developer and publisher THQ. He then got in touch with the people behind 4A Games, who had just signed a contract to develop the Metro series. He led the relocation of 4A Games’ headquarters to Malta and became a shareholder in the new Maltese company.

 

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