Snapshot: Incubation & Start-ups

Incubation expert interviews

25 interviews with incubation experts have been conducted in order to shed light on the current incubation situation.

Most of the interview partners came from tech or media incubators. Only 9 out of 20 incubators offer targeted support dedicated to game start-ups. These specific game incubators are located in Denmark, Estonia, Finland, Germany, Poland and Sweden. The majority of the examined incubators has been founded within the past 6 years, meaning there exists only little long-term experience on incubation support. Most of the incubators in the investigation sample are publicly funded. In general, they are of rather small size with up to 10 employees.

The most common support offered by the incubators is the organisation of events. If specific game start-up support exists it usually includes co-working spaces, mentoring programmes as well as financing and specialised pitches. Interestingly, many incubation experts stated that the amount of game start-ups making use of the support schemes has increased during the past five years, indicating a growing interest in incubation support by the game industry.

According to the experts, key problems of game start-ups are related to funding and to a lack of business and marketing knowledge (perspective of incubation experts). Experts from Denmark, Germany and Latvia mentioned a need for improving the economic climate for game start-ups in order to facilitate their access to financing.

Key areas of improvement are the availability and access to funding or business angels. Specific characteristics of the game industry, e.g. long development phases, have to be taken into account.

The incubation experts named the Game Incubator Sweden, Game Hub Denmark, Game Insight Estonia and the Finnish Oulu Lab as good practice cases for specialised game incubation within the BSR.

Interviews with Start-ups

In total 34 game start-ups founded were interviewed in the partner regions. The interviews were supposed to cover start-ups at the age of 5 years or younger (founded from 2012 onwards). However, due to availability problems in five cases the interviewed start-ups were older (6-8 years). The majority of the considered start-ups were founded in 2015. Most of the interview partners are currently in their start-up phase, which means about to finalise the development of a marketable product.

The size of the start-ups within the sample shows a large variation, ranging from 0 to 420 employees. Finland is the region with most of the recent company formations.

The majority of start-ups was founded by teams (at least two people). The majority of founders hold a university degree (IT or related field). Around 50 % of the founders had previous founding experiences. Most of the start-ups mentioned the supply of qualified employees as most important selection criteria for choosing their current location, followed by networks and an existing video game culture. The interviewed start-up focus on a wide range of different types of games (mobile games, virtual or augmented reality and different genres of games like adventure, educational or multiplayer).

The predominant financial source when starting-up was own money, followed by public subsidies and bootstrapping. Some start-ups stated that the complexity of grants and bureaucratic obstacles prevented them from applying for public funding.

The interviewed game start-ups are facing major problems related to marketing issues, such as specific market knowledge (how to sell a game) and general market issues (referring to problems in gathering market visibility, building up a recognisable brand).

Regarding incubation support, the start-ups were especially benefiting from networking possibilities and the organisation of targeted events.

Start-ups in Estonia, Germany, Lithuania and Poland criticised a low availability of specific support measures. The ideal incubation support for start-ups would include mentoring, financial advice and support in general business aspects like marketing, sales, strategic planning.