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The video game industry is booming worldwide. About 3 billion people play video games, and the data shows that number will continue to grow.
According to Statista.com, revenue in the video games segment is projected to reach $197bn in 2022. The growth rate of the video market is not showing any signs of slowing down, and the projected market revenue by 2027 is $285 bn.
So how can New Hampshire capitalize and tap into this booming sector? Where is NH on the map regarding the gaming industry, specifically game development?
This week Flo Nicolas, host and creator of the program Get Tech Smart interviews Neal Laurenza, CEO of Skymap Games, a development studio based in Manchester. Nicolas and Laurenza discuss how Skymap is helping to put a spotlight on the state’s growing video game development industry, what it takes to create video games and how some YouTubers are making millions playing video games.
This interview has been edited for length and clarity.
Flo Nicolas: You are the CEO of Sky Map, which is a gaming company, but you don’t only create games, you also help other gamers or game development companies. But before we get into the juicy details, we want to know who you are and how you took this path to creating games.
Neal Laurenza: I got into video games, weirdly from a super, super young age. My mother is an entrepreneur and a gamer, so I have memories of being a really small child and stumbling into the living room at two o’clock in the morning and she’s in front of the Sega playing. So I’ve wanted to make video games in some form or another for a really, really long time. I got into video game modding during high school, which is modifying existing video games to make them do what I want to do: so changing a wall to be see-through, for example, if I wanted to cheat in an online multiplayer game, but don’t tell anyone that. Then for college I went to Southern New Hampshire University where I did video game development and graduated, went to work for a software company doing marketing for probably about a year, and then took what I made there and started Sky Map games, my video game company.
Flo Nicolas: Wow, that’s incredible. When you were talking about your mother playing the Sega game system, you just really made me feel old because as a child that was my favorite gaming system. I was obsessed with Sega, so I felt a little old.
Neal Laurenza: Me too.
Flo Nicolas: But that’s great. I mean, so you went to school, then you did the game development program, and then you decided, I’m just going to go ahead and create my own company. Let’s walk through that process and what are some of the games that you’ve created?
Neal Laurenza: During the time that I was in school the kinds of games we were making were really for educational purposes. They were just for us to figure out how do you actually make games successfully, because the process of doing it is really hard. Games are art: programming, music, business project management engineering; there’s a million components to make a video game. We used that as the opportunity to try and fail. We would even, during the summertime, continue renting dorm rooms just to keep making games even when the professors weren’t around, just because we were really motivated to figure out how to do it correctly. When I graduated, we started making a game called Bacon Man, which was about a guy made out of bacon who beats up vegetables.
That was tons of fun to work on, but also we realized very quickly how expensive it is making video games. Some projects can be millions of dollars. Even big triple-A games can be hundreds of millions of dollars to develop, meaning like the biggest titles in the industry. So what we decided was, let’s figure out how to make money making video games. One way of doing that was contract development. We would go online, search on forums for all sorts of different game development groups and say, ‘Hey, we’re able to work.’ First, it was like $15 an hour, and then it was like, okay, well now we got a couple projects going, we just kept going up and up. That’s still part of our business, but in that side of the business we’ve worked on games like MarioKart Home Circuit, Don’t Starve, games like Myst, Sam & Max, a whole bunch of different video game properties that are for one reason or another fairly famous, which I feel really, really excited to share that.
Flo Nicolas: Right. I mean, MarioKart is huge. I know this, I’ve bought it. I’ve bought two copies of MarioKart for my daughter, so that is definitely a huge milestone for your company.
Neal Laurenza: Absolutely. It’s really interesting to get to work on teams that are integrated within groups in Japan too, because then you get to learn how other cultures also make video games. It’s different than in the states, which is kind of cool.
Flo Nicolas: So you just mentioned right now how the cost just to develop a video game is not a couple of pennies. We’re talking like millions of dollars here.
Neal Laurenza: It’s not trivial. It really depends on the scope of the game that you’re building. There are definitely developers who’ve made games on shoestring budgets, but for companies like Sky Map, usually those projects are a minimum of a million dollars and they can range up to $5 million for a project.
Flo Nicolas: What’s driving up that cost? It sounds like based on what you just mentioned, it’s not just one person. It sounds like it’s a team of people. There definitely sounds like collaboration that’s going on, so what is the A Team? Right now, if I wanted to build a video game, who would be on my team? Who was the A team here?
Neal Laurenza: For super small developers, known as ‘indie devs’ – independent devs – they could be as small as one person. In that case they’re multifaceted and maybe they’re doing art and programming and audio and a bunch of other things. For sort of a typical game development team, you have some number of folks that are doing art that can be 3D or 2D. You have folks that are programming, folks that are doing project management, audio. The thing about games that a lot of people don’t understand is if you go and make an album, you’re just making the songs. If you go and make a movie, you’re recording and you have actors and there’s a lot involved in that. But when you’re making games, it’s the culmination of all of those things in one product. And it also has to be fun, depending on what your goal of the project is. So it’s really challenging and very multifaceted and like you said, you can have a team of a ton of different disciplines to make that work.
Flo Nicolas: So a game like MarioKart – I guess that’ll be the best way. By the time I buy the game, I don’t know the behind the scenes. It took hours and hours and how many people on the team? I don’t know any of that. So a game like MarioKart, how long does that take from start to finish?
Neal Laurenza: It’s hard to know exactly, because that project we came in a little later in development, but I can give you an example of some other games that I know of. There was a game that we’re working on, like Bacon Man, for example. Doing that part-time with four people took us almost five years. We were learning how to build it while we were doing that. Now a game like that might take 10 to 20 people for our team would probably take 18 to 24 months. But it’s very unusual for a group of our size– our company’s about 50 people– to have games they’re working on that are less than 18 months of development time.
Flo Nicolas: That’s a long time. You’re literally going through various project milestones before you can get to the part where I go buy the game for my kids.
Neal Laurenza: That’s right. Usually there’s also distribution deals with publishers or other groups that are involved in financing, getting the game to the market, physical distribution, digital distribution, marketing, PR. There’s a whole other side of the industry that’s outside of development as well, but we’re mostly just focused on development.
Flo Nicolas: All right, so let’s talk about just how the video game landscape is changing. Now we have the metaverse coming in, and we’re starting to see people wanting to use the VR glasses, and this whole new virtual reality world for games. Is that anything that you are currently investigating, researching?
Neal Laurenza: We actually have multiple original titles in development for VR. I’m a believer that there are lots of different platforms that can create completely unique experiences for players, but the way that I tend to focus on deciding what platform we’re rebuilding a game is, does that platform such as virtual reality actually provide some experience that people haven’t seen before or that is unique in the industry? I think there’s a lot of focus around buzzwords like Metaverse, VR, XR, even in some cases blockchain and NFT stuff that’s sneaking into video games. But I don’t think everybody necessarily understands what that means and what the implications are. What my group tries to focus on is not looking at a particular technology to solve a problem – if there’s no problem that we’re trying to solve for, then why just implement a technology into the game arbitrarily? Instead, we’re looking at what’s an experience or what’s a thing that cannot be done, is there a technology that can suit that, or has it been invented yet? So VR provides some really interesting opportunities in making folks feel like they are there and using their body in ways that video games haven’t traditionally been able to do.
Flo Nicolas: I think you bring up a good point, because right now, Metaverse, web three, and you mentioned blockchain as well, and NFTs, that’s the new shiny object right now, right?
Neal Laurenza: Yes, that’s right.
Flo Nicolas: And everybody is just like, Ooh, how can I use this? There’s no problem they’re trying to solve but it’s, I want to be one of the first people to launch something with this new cool, shiny tool.
Neal Laurenza: It’s something I have some grievance with. I think there are a lot of companies that are super invested right now into NFTs and blockchain and these other types of tech. I think those technologies, some of them have problems like environmental aspects and things like that, but I think those are solvable, right? However, we get approached by companies all the time asking us to do NFT or blockchain projects in the video game space. The question I always ask those folks is, what does this do to make a better player experience? 99.9% of the time, they just can’t answer that. They always come back to answers around ownership of objects in the game and that sort of thing. But you never really own something just because it’s on the blockchain. It doesn’t mean you actually own it. If it’s not a physical, tangible thing, ownership is a very hard thing to define. I think it’s a little bit deceiving that there are so many people coming into that space. I’m looking forward to a day when we have a unique legitimate use of blockchain technology in the video game space, because I just haven’t seen anything yet that a standard relational database couldn’t solve in video game development.
Flo Nicolas: But everything you’re saying is spot on. I will say I have tried the experience of having the VR glasses and it’s like you are on a roller coaster, and you literally feel it. For some people they might say, that’s the experience. People want to not just thumb, thumb thumbs, playing, playing. They want to actually have something on, maybe MarioKart and you’re in the car, you know, that full body experience.
Neal Laurenza: It’s all about the suspension of disbelief. Video games are all about creating some sort of core fantasy for a player, and VR is a step toward continuing to trick the brain into forgetting that there’s things in the outside world. It’s another way of getting you sucked into the experience. I think VR is the next step in eventually getting toward other ways of giving people sensation within games. Right now we’re using VR to trick your inner ear into thinking that you’re in a physical space. We’re covering the player’s vision, doing audio that is surrounded and you can actually hear things that are coming from directions. So we’re getting close, I still feel like VR is making huge strides, but it actually still feels very far away from where the VR industry wants to take it, which is total suspension of disbelief in this platform.
While I feel optimistic about the future, I also recognize that there are a lot of folks that do escape into video games, though I don’t think that video games are a net negative in any way. I think they can be a very positive experience on people’s lives.
Flo Nicolas: I definitely agree. My husband has those, and sometimes he runs away in the basement – hold on, ‘man cave’ – to escape us, but I have a trick. I just open the door and I let the kids downstairs right there with him.
Neal Laurenza: Nice.
Flo Nicolas: But speaking of kids, my daughters love video games. They’re like video game junkies. They got the Xbox, which, I probably need to upgrade for them this year, so I’m timing the Black Friday deal. But they now do this thing that I’m like okay, what’s going on here? They now watch someone playing video games and narrating the whole thing. So they stopped playing video games. Now they watch someone playing video games.
Neal Laurenza: I sort of equate it to folks sitting next to each other and one person is playing a single player game and other person is watching, and they’re both commentating back and forth. It’s become almost like a television show where people are logging in to watch these live experiences of other folks commentating their video games and they feel like they’re in some way or another building some sort of relationship to the streamer because the streamer does things that they find interesting or tells jokes or whatever it is that they like. It’s kind of the same as turning on a TV show and watching it, but also different from the perspective that it’s live streamed and everything that’s happening is going on at that moment. Games are interesting because once you’re done watching the show, then you can go play the show.
Neal Laurenza: So, I’m watching this person stream – pick a game – Apex Legends or something, and then I’m going to go and take what I’ve learned from watching that player and go enjoy that experience on my own. That’s a unique aspect of the streaming world.
Flo Nicolas: I think it’s also kind of fantastic, because I think one of the things that happens is if they’re playing, they have large followers – I’m talking about people who are getting billions of views – and some of these gamers, like Markiplier’s one I told you about earlier, he is making like 35 million a year. But I think it’s a great way for someone who just developed this small game, and if you can get his ear, one of these YouTubers ears to play your game, you are now like, boom.
Neal Laurenza: A hundred percent. There’s a whole aspect of video game marketing now that revolves around trying to get YouTubers and streamers to play your video game on Live. It’s fascinating. It’s funny, when I got into making games, it was just really spinning up and now seeing to what degree people are watching these streamers, these entertainers, play these games is staggering, and you’re absolutely right. People make a living now and in some cases have entire companies just around the production of these videos.
Flo Nicolas: So back in 2018, I think the video game industry was around like a hundred and something billion. We’re now– it just smoked that.
Neal Laurenza: It’s going over $200 billion. I think it’s going to, I think they’re saying around $205, $206 billion this year in revenue. That is crazy. I think that it’s not stopping from what I can tell, it’s also fairly recession-proof, which is interesting. It’s sort of like the more people are stuck at home, the more people enjoy playing video games, start to learn how to play video games, and then those folks don’t ever really leave. You don’t hear very often about folks that start playing video games and then stop playing altogether unless there’s some major life event or something. The pandemic was an accelerant because there are a lot of folks that, 2020 rolls around and they’re stuck at home, and they start figuring out, what am I going to do with my time? They got into playing video games, and some of them got into making video games too, which is pretty cool.
Flo Nicolas: And they’ve made it easy. They’ve made the technology easy, that you don’t have to just be plugged into the tv now. You can take that console and you can be anywhere you want playing those video games, so you have that accessibility. Play anywhere, anytime, 24/7.
Neal Laurenza: That’s kind of where things are moving to, is video game streaming. The idea that there’s some data center somewhere, and like with Netflix, you load up on your phone or your TV or whatever I want play this game on and it streams the video of the game. It’s actually being processed on a server somewhere, but the video feed is coming to the player. When the player makes an input on the controller, it goes back to the data center, and it’s just running that cycle.
Flo Nicolas: That’s how this industry is continuing to make money, because it’s easily accessible. And like you said, it’s recession proof. Yeah. For parents, it’s like when our kids are like, This is what I want for Christmas, half the time that’s what we’re getting, unfortunately – lucky kids. But let’s talk about this whole other world. We have the YouTubers who are making some serious money but now there’s competitions, global competitions that are going on where the prize is millions of dollars as well.
Neal Laurenza: Esports. It’s funny, I don’t remember the exact statistics, so apologies. But there was an Esports tournament that happened a year or so ago, and I think they said it had more viewers than the Super Bowl.
It’s reaching a point now where – to describe Esports for folks that maybe aren’t aware of this. There are lots of video games that are super competitive and online multiplayer. In some cases, it’s eight on eight people fighting each other or playing against each other or whatever. Esports have running leagues and professional teams with coaches and managers and all sorts of things like you’d see in the regular sports sponsorships. They’re playing for large cash prize pools. In some cases those pools are hosted by the leagues themselves or even by the video game companies that are making the games.
Flo Nicolas: Actually, we had our Weld Academy here, which is in Nashua, and they have an Esports team. We had one of the coaches who is overseeing that program over there and he was talking about some of the money that’s being made from these competitions for top prizes. It’s absolutely like, I have the time. Why’d I go to law school? I should have been in tech a long time ago.
Neal Laurenza: It’s a weird thing. I don’t think anybody truly would’ve known how big things were going to get. You can be in the video game industry and not be involved in making video games at all. You could be a streamer, you could be a professional Esports person, you could be a coach of an Esports team as weird as that sounds, IP Law. Game companies are massive. Some of the largest ones are thousands and thousands of employees. It’s a very hot space and again, shows no signs of stopping right now. Tendrils are going into all sorts of other industries as well.
Flo Nicolas: It’s definitely growing. How do you see the shape of the gaming industry here in New Hampshire?
Neal Laurenza: It’s pretty small. Right now, Sky Map, as far as I know, is my company is the largest employer. We’re about 50 employees, and we anticipate we’ll probably double in size over the course of 18 to 24 months. Which is exciting and terrifying, but also very exciting.
Flo Nicolas: Who are you hiring? When you are saying you’re going to expand in 18 to 24 months, who are you hiring? Tell us the juicy details.
Neal Laurenza: My company really focuses on four areas, which is engineering, design, quality assurance, and production management. We also have backend team like ops and legal and those sorts of things. We anticipate that the majority of our hiring is going to be in engineering, we’ll also be adding some additional design resources, some QA resources, some production project managers, and probably only one to three back office folks just to continue helping support the growth. That’s really where our core focus is. Other game companies might have more substantial other departments, so because we specialize in those four areas we are just focused on that. If you’re a different company, you might have a full art department, you could have an audio department, among others.
Flo Nicolas: What’s the project manager doing? And the reason why I ask is I was actually talking to a young lady yesterday who’s like, Hey, I want to be a project manager for a tech company. So, I’m curious, in a project manager role for a gaming company, what are they overseeing? What are they doing day to day?
Neal Laurenza: In the video game industry, there’s a catchall term called producers. For some companies it’s project managers. For some, it’s just this person who solves what needs to be solved on a project and is going where needed. In Sky Map typically the project managers, typical software project management, agile methodology, running sprints in some cases for software developers, task tracking, goal tracking, reporting information to clients or stakeholders on the progress of a title, and helping to remove obstacles from the development team. Like, Hey, I’m running into this problem. Well, let’s figure out what resources are needed in order to overcome that issue.
Flo Nicolas: Critical thinking, problem-solving skills, communication skills.
Neal Laurenza: Organized.
Flo Nicolas: Now are you doing project manager or is this a product manager?
Neal Laurenza: Project management, typically. There are companies that have product managers but in games, usually those are folks that are some form of project director or creative director – sometimes hybrid of those roles. It just depends on the structure of the company. For our team, we have creative directors and lead designers, and they typically take on that type of role.
Flo Nicolas: It’s a whole production. I’m just listening to you talk to who’s on your team, it’s like a whole production team.
Neal Laurenza: It’s a lot of really smart people who are just super, super motivated to be working on these games because they have some sort of connection to the video game industry and they want to be part of that excitement.
Flo Nicolas: It is definitely exciting. For people who are looking to get into gaming, who are as excited as my daughters who love video games, where do you start?
Neal Laurenza: You can get started making video games, there’s very little barrier to entry. You could go on YouTube and search how to make video games, Unreal Engine or Unity, one of these free software programs that are out there to make games, and you could start making them right now. There’s not really anything stopping anyone other than access to the internet and a decent computer. You don’t have to have anything too high-end, but something strong enough to run the software. Video game industry tends to prioritize portfolio first, so folks that have strong portfolios, the ability to show their work, is most important. I would say second to that is experience. Though some companies will say experience is actually even more important than portfolio depending on their priorities. And then third is education. There are lots of folks working in the game industry that don’t have degrees, which is fine as long as they are super awesome at the work. The difficulty becomes when there’s so many people competing for video game jobs. Having the degree does help you stand out amongst these larger pools of applicants.
Flo Nicolas: I just want to touch upon that real quick before we wrap up, because I am seeing an increase where some companies might not necessarily be focused on the four-year college degree. You’re starting to see more people do apprenticeship-style programs. Learn and earn motto. Is that something at all that your company does?
Neal Laurenza: We do internships and everything we do is paid internships. I feel fortunate that being in New Hampshire actually does give us some advantages, where I feel like if we were in Los Angeles or something one of the video game industry hubs that the cost to run the business would be so much higher, because we’re in New Hampshire, which is not a video game hub, but is close to other video game hubs, which is helpful we are able to pay fair wages and have folks that even are in training who are coming in working while they’re in school in some cases, or starting off as part-timers and then we move them up pretty quickly to full-time employees once they prove, Yep, I can do good work. So we do that fairly regularly.