1. Dr. Malte Behrmann, General Secretary
Shenzen May 2009
European Game Developer Federation
www.egdf.eu

2. 2
European Game Developer Federation: EGDF
• ASSOCIATION OF DEVELOPERS:
Trade Body & SME NGO
• Representation of interests in Brussels as European
association of developers
• Best Practice exchange
• Elaboration of mutual positions (technology, content)
• Members:
UK, AT, DE, FR, SE, DK, FI, Nor, Be, NL, Lux, Es
• The federation represents more than 500 studios,
which together employ over 15,500 people.

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Importance of Games
Game development in Europe is an economic, cultural and
technological challenge.
That means games are important as they are at the
crossroads of three issues:
• Cultural diversity = democracy
• Economic development = jobs
• Technology = technological position
=> Innovation catalyst in the information society

4. 4
Culture: Games are culture
• In France this is less an issue, but it is in the rest of Europe:
Examples: Germany, Britain, Norway
• Impact on society is growing => positive attitude is important to
integrate games into the regulation and support initiatives of the
information society.
• Nevertheless: French Tax credit case is important for Europe
• Games as international culture
– Dynamic definition of culture (ongoing process)
– Development in civilisation of human kind
– Does culture always need public funding ?
• Games as national culture
– Is there something as a French game, a German game ?
– Yes: Genre, colours, identification of the creative with
environment

5. 5
Games: An economic factor
• One of the few growing sectors, but publisher & console
deadlock from developer p.o.v.
• Content economy: Traditionally hit – driven: Network &
Feedback effects, so it is here.
• Network effects and economies of scale:
– Very few projects reach out to international marketing
– clear genre orientation and international stereotypes
– Production costs are rising quickly
• Creative industries: European developers face international
competition from funded game production ecomomies: Canada,
Singapur, US, within Europe, Korea, China, US, New: Mexico,
even Malta etc.
⇒ Despite the growth independent development becomes more
difficult

6. 6
Games: Key Technology
Development Technologies
• Vital for Europe:
Technology for content
creation
• Tools for the creation of
content e.g.:
– Middleware
– Procedural content
– Tools
• Standardisation and
interoperability
– data formats
– software interfaces
– Flexibility and
adaptability
Borders are blurring
• Today: Content funding
much smaller, than the
funding for technology.
• Technology & Content &
Business model
3D Media Internet
Online Content Regulation
• opportunities for opening up
the market for new, creative,
quality driven and European
content
• Network Neutrality in danger
–> threat for innovation

7. 7
The traditional value chain

8. 8
Traditional business model: Publisher as Financier
Development advance
against royalties
• Prototype
• Some/few bonding and
distribution deals
• Work for hire – margin 10-
30% (+royalty)
• Most financing against
monthly milestones
• Exponential costs from
platform to platform
Main Issues
• Europe remains a fertile ground
for high-end games production
but developers face ongoing
challenges These include:
• Access to funding from outside
of publishers
• Increasing cost of
development, squeezing all but
the largest independent
developers
• Cheaper resource alternatives
• Holding onto IP rights is difficult

9. 9
Trends
Convergence ? !
it is happening now – surprise !
• It might be called today
“Distributability in the Internet
Protocol” (“IPTV”, IPhonie”)
• This changes
– supply and demand (business
models)
– value chain / value network
– audiovisual medium services
(linear - non linear)
• ! Online games are not so
piracy – vulnerable as off line
(contrary to music) !
• Consoles
– Faster, Stronger, Better…
• Human Interfaces
– WII, DS…
• Online
– Direct to consumers
• Games are THE functioning
interactive content in a 3D
internet world
– Boom of browser & online
games (just a new hype ?)
– Community as new shaper
– Content aggregator is the new
centre
– They broaden now to digital
content

10. 10
Western retail games versus
online & mobile – 27% of
market by 2010 – retail’s
dominance slowly being
eroded
Source: Screen Digest

11. 11
New opportunities online & browser games
• Business Models in historical
development
– Advergames in dot com
boom
– Client based „big online
games“
– Browser based – free to
play
– Item selling works now
– In a few years 50% and
more …
• Allows adoption of alternative &
multiple business models – such
as dynamic in-game advertising,
microtransactions and
subscriptions
• Allows adoption of alternative
content models – user
generated content, episodic
content, expansion packs
• Allow content creators to build
relationships directly with
consumers and move up the
value chain
• The opportunities are growing
fast but these sectors are also
very fragmented and face their
own challenges

12. Cooperation & exchanges between the EU and China:
Identifying common interests of the cultural industries
• Games as new cultural medium
• Online is inceasingly relevant
• Ubiquitus aproach
• Technological cooperation
• Mutual cultural understanding
12

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Any questions left ?
Email to
Malte.Behrmann@egdf.eu
Thank you !