From hobbyists to entrepreneurs

Small states and the Nordic context

A central assumption in this article is that both geographic features and the socio-economic context of the Nordic countries have shaped the starting point and the evolution of the game industry in the region. We believe that by using small state theory as a background, we can better understand the specific conditions for game development within the Nordic region but ultimately also other small nations.

Small nations tend to have some common characteristics, and there is a minor academic field dedicated to small state theory. There is no universal definition regarding what constitutes a small country but fewer than 10 million inhabitants is a regularly used number and the Nordic countries are often used as examples within the field (Kuznets, 1960: 10). The interesting aspect of smaller countries is that they are often quite successful, despite being faced with certain difficulties separating them from larger nations. In general, small countries are affected by diseconomies of scale. One consequence is a concentrated and limited industry structure. For example, Finland, Norway and Sweden have historically been limited by this. Krantz (2006: 5) writes:

Finland, Norway and Sweden are among the big nations in Europe with regard to surface area and hence they are sparsely populated. However, in their industrialisation at least in its early phases even these countries rested heavily on a few natural resources. Thus, their economic structure was highly concentrated to certain basic industries. Later on, a diversification occurred but even so there was a concentration, due to the small population, which could not be spread too much over different industries and over the territory.

Limitations in the industry structure arise from restricted opportunities for companies, for example, small domestic markets, limited financing opportunities and a small labour market. Subsequently small states cannot support a diverse ecosystem of industries. This also makes small states heavily dependent on the international market as an outlet for goods and services. As a consequence, they will often endorse international cooperation, open markets and free movement (Krantz, 2006: 6).

A Nordic game company in the 1980s or early 1990s could not rely on much domestic support. There were no local publishers and few hardware manufacturers interested in games. Subsequently they had to turn to the international market from the very beginning. Game companies would simultaneously have to compete for employees with other more established industries. For example, several Swedish developers who were active in the 1980s left game development for mainstream software development (Sandqvist, 2012: 139).

Despite the disadvantages that small states face, a high proportion of the wealthiest nations in the world are small. The Nordic countries have among the highest gross domestic product per capita and are found at the very top of the Human Development Index (UNDP, 2013: 144). This might seem like a paradox but smallness have some specific benefits. Small countries often have an internal unity and can be adaptable. The ability to adjust and change is reliant on good social and institutional frameworks. The Nordic countries are small open democracies with welfare systems based on democratic corporatism (Krantz, 2006: 8). The Nordic welfare state has also been characterized by social policy systems such as tax-financed healthcare and educational systems, wage synchronization and active political incentives towards the media and cultural sphere (Syvertsen et al., 2014: 5–6).

These structures have likely positively affected the evolution of the Nordic game industry. It is reasonable to assume that the high economic level and the open economy have influenced the development of the industry. Home computers were freely available and obtainable even for the working class. In contrast, the socio-economic situation in the Nordic countries could be compared to the situation in the communist countries in Eastern Europe during the 1980s. These countries had no open market economies and were under the CoCom embargo that restricted, among other things, the availability of computers. Private imports were also restricted by the lack of convertible currencies. As a result, computers and software were mostly not available for ordinary citizens (Švelch, 2013; Wasiak, 2010). For example, in Czechoslovakia, a hobby culture evolved instead of commercial game development and one major category of games featured political statements criticizing the communist regime (Švelch, 2013).

Whilst the media welfare state extends to the game industry in the region today through funds administered by public organs, such as the Norwegian Film Institute, the Nordic Game Programme (Jørgensen, 2013: 8) and Tekes, the Finnish Funding Agency for Innovation, in the early 1990s, there were few political incentives that were directly relevant for the game industry. The effect of welfare politics on the game industry at that time is for this reason unclear and unexplored. A number of potentially positive connections may have had an indirect effect, for example, state investments in computer development, tax reductions for computers purchases, access to free education and cheap student loans.

Skill transfer

Central to the article is the idea that a certain competency that evolved in the demoscene started to appear as relevant and attractive for the emerging game industry. This competency was a specialized kind of digital literacy, a procedural literacy that enabled demosceners to do advanced computer programming (Bogost, 2008: 137). According to Izushi and Aoyama (2006), cross-sectoral skill transfer occurs differently depending on national contexts. Whilst the particular state of technology determines which creative skills are relevant for the new field, the existing industries within the country and their relative strengths have an influence on how skills are drawn to the new industry. In their study, Izushi and Aoyama analysed the evolution of the game industry in Japan, the United States and the United Kingdom. Interestingly, there appear to be major differences in the cross-sectoral transfer of skills. Early Japanese video game industry had its connections to arcades, toys and consumer electronics industries. Key skills were drawn from the comic book and animated film sectors. Very different from this, the US industry evolved from arcades and personal computers, whereas the UK industry developed mostly from self-taught programmers and ‘bedroom coders’. All in all, the study presents two important arguments that we need to explore more closely in the light of our case studies. First, skills and practices can translate from one domain to another. Second, the game industry does not emerge de nouveau. Instead, a new industry branch needs to draw skills and knowledge from pre-existing industries and related fields or else create them on its own.

The development of the Nordic game industry does not follow the historical trajectory of the Anglo-American or Japanese regions. Neither the electronic companies nor the existing cultural industries showed much interest to games. Consequently, many of the upcoming game developers trained their skills within the hobbyist circles, including the demoscene. Through the case studies, we explore how the skill sets, production and management methods and other ideals were converted to the new domain.

Following Pierre Bourdieu’s (1986) terminology, we are especially interested in the forms of cultural and social capital and their complex transformation into economic capital. In addition, the forms of capital associated with the demoscene have a particular ‘subcultural’ nature. According to Thornton (1996: 10–14), ‘subcultural capital’ is embodied in the form of being ‘in the know’. In other words, it is typically extracurricular and confers status only in the eyes of the beholder who is initiated into the particular subculture. There is also an important connection to Consalvo’s (2007) idea of gaming capital, a dynamic social currency that is accumulated through being knowledgeable about games. As Consalvo points out, gaming capital is not only gained by playing games but there are various ways of gaining this knowledge. Traditionally, not all demosceners had gaming capital in a sense that they would be avid players. The demoscene and the gaming scene had their connections though, as highlighted by the public parties in which these activities were often present side by side (Tyni and Sotamaa, 2014).

First steps for Nordic computer games

The very first computer games in Nordic countries were developed in the mid-1950s. The first electronic computer in Norway, Norsk Universell Siffermaskin, Sekvensstyrt, Elektronisk (NUSSE), was demonstrated to the public in spring 1954 at University of Oslo’s open-university day, and as an early attempt of popularizing the technology, a game of NIM was presented for an enthusiastic audience (Haraldsen, 1999, 74–75). A Finnish NIM machine, constructed around the same time, was later used as public relations tool showcased in public exhibitions (Saarikoski and Suominen, 2009: 21). In a similar fashion, an Siffermaskinen i Lund (SMIL) computer constructed in 1956 in Lund University, Sweden, was reported to challenge attendees to a game of NIM (Hallberg, 2007: 172). It still took quite a while from these experiments until the environment was ready for the commercial game projects.

The number of electronic hardware producers has always been relatively limited within the Nordic countries and for long game development was limited to isolated experiments. Since the domestic electronic companies were not investing in game development, it took until the introduction of the personal computers for the situation to change. Suddenly, with a computer and basic programming skills basically anyone could produce a simple computer game. Nevertheless, as the local publishers and distributors were largely non-existent, barriers to entry were high and large-scale game production was mostly unrealistic in the 1980s (Saarikoski and Suominen, 2009: 28–29; Sandqvist, 2012). A handful of individuals like Bo Jangeborg (Fairlight, 1985), Stavros Fasoulas (Sanxion, 1986) and Jukka Tapaninmäki (Octapolis, 1987) were able to negotiate distribution deals with foreign publishers. There were also publicly funded educational projects like Møt meg i Malaga (Meet me in Malaga), developed by the Norwegian Center for Educational Computing (Norsk Pedagogisk Datasentral) in 1988 (Steenbuch, 1988). Altogether, whilst individual games started to appear, the environment was not yet stable enough for a lasting industry to evolve.

The demoscene

Whilst the history of display hacks and software crackers dates back the early days of computers, the advent of demos – audiovisual showcase works rendered in real time – is normally located somewhere in the mid-1980s. According to the often repeated story, crackers started to add ‘signatures’ such as crack screens and crack intros to games whose copy protection was removed. Later on, many of the hobbyists decided to focus solely on intros, and a new real-time audiovisual computer art form was born. Whilst this canonical story is obviously a crude simplification of complex developments over the years (Reunanen, 2014), it still highlights how demos and games were connected from the beginning.

The culture that spawned around making and distributing demos is often called the demoscene. Depending on the context, the demoscene has been conceptualized as a programming subculture, an underground movement, a community or an art form (Heikkilä, 2009; Reunanen, 2014). Whilst individual demo groups can be found all over the world, the scene has been most active in Europe and especially in the Nordic countries (Reunanen and Silvast, 2009). One could argue that the pinnacle of the demoscene was witnessed in the 1990s. At the same time, groups remain that keep up the tradition by conquering ever new platforms. Traditionally, the demoscene has consisted of almost entirely adolescent males. It is often depicted as a meritocracy, celebrating virtuosity and promoting a clear division between ‘elite and lamers’. The best demos show how to maximize the performance of specific hardware and thereby act as the highest demonstration of programming talent. Still, as Carlsson (2009: 18–19) suggests, instead of a single entity, the demoscene should be seen as an umbrella term for different clusters. It has been open for ‘all kinds of approaches and disciplines within the subculture: traditionalist and avant-garde, fame-seeking and underground, technical and conceptual, crafty and artistic, competitive and self-expressive’.

Already in the early years of the demoscene, demo groups utilized online platforms like bulletin board systems (BBSs) for communication and collaboration. Still, different kinds of gatherings – large and small – were important crossing points for active sceners. The size of demo parties grew fast during the early 1990s and soon the largest festivals – including The Gathering (Norway, founded in 1992), Assembly (Finland, 1992) and DreamHack (Sweden, 1994) – collected thousands of annual attendees. Related to this, Izushi and Ayoama (2006: 1846) point out how in the early phases of any new industry, the attraction of labour force relies heavily on ‘social networks, such as hobby clubs, meetings at shops, trade shows, and conventions, alumni of ground-breaking firms in existing industries, and the contacts of an emerging industry’s pioneering entrepreneurs’. In many ways, the large-scale annual events had a key role in aggregating the skilful enthusiasts. They became happenstance schools for graphics programming, meeting points and billboards for the most talented programmers and popular recruiting grounds for talent scouts (Tyni and Sotamaa, 2014: 117).

The popularity of the demoscene and other forms of computer culture that rely on home computers spawned a Nordic game development scene almost solely based on home computers. For example, whilst Sony Playstation dominated the global console market for several years in the late 1990s, not a single Finnish game was developed for this platform (Reunanen et al., 2013: 19). One could argue that the ‘walled gardens’ including strict developer licenses and expensive development kits did not attract the hobbyists who were used to building their own tools and optimizing the hardware as they wished.

Although the relationship between demo making and gaming was not always without its frictions (Tyni and Sotamaa, 2014), the demoscene also included an active scene for game development (Gamespot, 2008; Recollection, 2006). An early Norwegian example is a game called Fuzzball, developed by Scangames Norway, and released by System 3 Software Ltd in 1991 (Chagall, n.d.; Hansen and Møller, 1992). Scangames came out of the demoscene group Razor 1911, where programmer John Atle Kroknes and graphics and sound artist Thomas Dahlgren where members (Exotica, 2013). Other game companies that are often reported to employ people with demoscene background include, for example Starbreeze (SWE), Housemarque (FIN) and Bugbear (FIN). In the following, we move on to the three case studies, taking a closer look at the early days of Nordic game companies and possible connections between demoscene and game development.

Digital Illusions, Sweden

Digital Illusions is a successful representative of a wave of Swedish game companies emerging in the 1990s, companies with strong ties to the subculture surrounding the demoscene. The founders of Digital Illusions had started the demo group The Silents in the mid-1980s. Like most demo groups, it consisted of young men, who were born in the late 1960s and 1970s and grew up using microcomputers.

Fredrik Liliegren, one of the members of The Silents, had tinkered around with the family computer, but the demoscene was the catalyst for a growing computer interest: ‘Thanks to the demoscene our interest really sprung to life and it became an important part of our spare time. Not just by ourselves but we also formed groups. It was the social interaction that made you more interested’ (Liliegren, Interview 2013). Through demo parties and international contacts The Silents gradually expanded into a multinational group consisting of European members and a few North Americans, but with a core of members from Sweden and Denmark. The Silents was deeply engaged in demo production and never really involved in the cracking side of the scene. The founding members also organized their own demo parties in their small home town of Alvesta in the south of Sweden. Liliegren talks about the competitive aspect of these parties and how important they were for the demo group:

We were very young then, so it was very cool to get recognition. You had worked in your bedroom for months and wanted to show people and wanted them to think it [the demo] was really good and to vote for it as the best demo of the show. (Liliegren, Interview 2013)

Based on an idea from Danish members of The Silents, four Swedish members from the group (Fredrik Liliegren, Markus Nyström, Olof Gustafsson and Andreas Axelsson) decided to develop a pinball game in 1988. One of the Danish graphic artists had painted a pinball table and scrolled it around in a painting programme to simulate the game. The Swedes liked the idea and felt that creating a game would be like making a demo, just another way to show off their computer skills. There were no plans to make a commercial game. Markus Nyström summarizes the first years developing the game thus: ‘It was all about having fun and getting respect’ (Sundberg, 2009). The members of the group were also still young; Liliegren was the oldest, just around 20 and studying computer science at university level and Axelsson was only 15 years old and still in secondary school.

The pinball genre seemed to fit the group. Fredrik Liliegren says their background helped them creating a good game:

I think that technical knowledge was very important. There was stiff competition at the demo parties and you wanted [to present] the most efficient, coolest and best stuff. The demos had to look good and be attractive and innovative. (Liliegren, Interview 2013)

The group also thought that pinball had an advantage in that it did not require a storyline and that it would be easy to sell the concept since pinball was an ageless form of entertainment (Liliegren, Interview 2005).

After developing the game in their spare time for two years, the group started thinking about trying to sell the game. They decided to go to the European Computer Trade Show (ECTS) in London in 1990, where they had to sneak in since they could not afford the admission fee and had no official meetings booked with publishers. No publishers offered them a deal, but some were interested enough to motivate the young group to keep spending their leisure time working on the game. After developing the game for another year, they returned to ECTS in 1991, better prepared. They had scheduled meetings with publishers and were presented with some offers. They decided to sign a contract with the British publisher 21st Century Entertainment for the game later entitled Pinball Dreams.

A consequence of the contract was the founding of a general partnership company. Fredrik Liliegren (Interview 2005) says: ‘Our plan was still just to have fun and, if we felt like it, make some more games. We had no ambitions to found and run a company’. The founders however needed a legal way to receive the advance payment of just over €7500 (today’s value) from the publisher. It was not enough money for the group to live off, but they could buy new gadgets, such as computers and hard drives.

When the group left the scene around 1992, they had learned some valuable lessons. One such lesson related to copyright and computer games. Fredrik Liliegren (Interview 2013) says they never tried to write any strong copy protection for the game since they knew it was just a matter of time before it would be cracked anyway. For the release of Pinball Dreams in 1992, they instead wrote messages in the source code pleading crackers to leave the game alone. One message read:

This is a message to all people out there who wishes to crack this game: Please don’t! You should know that this game is fully developed by SILENTS members. And if there is still any friendship out there in the scene, please consider this product as a contribution to the demo producing masters of the world, and let it make us feel that we have earned some experience in the scene.

The developers tried to use their subcultural recognition to avoid getting their game cracked. However, the messages indicate that they did anticipate that the game would be cracked and the demoscene showed its rather spectacular cracking efficiency. The Swedish group Fairlight cracked and distributed Pinball Dreams two weeks prior to release. Still, Fairlight did in some way respect and honour The Silents. The released crack text mentioned that the game was programmed by The Silents and also said: ‘We strongly encourage you to purchase the ORIGINAL of the game and please do NOT spread the game to any lamers!’

Pinball Dreams was made into a franchise and expanded to a number of platforms. The games did bring steady revenues but no spectacular amounts. It was, however, more than enough to sustain and encourage four guys in their 20s with no large expenses. Despite the expansion and success, the company still had no formalized structure. The company did not pay any regular salaries nor had it a corporate hierarchy. Instead, it was more like an umbrella organization that accommodated different activities. Two other Swedish demo groups wanting to switch over to games had contacted Digital Illusions and were invited to conduct their business in the company’s name. Liliegren talks about the structure:

You could almost say that we had a kind of socialist structure in our company the first years. It was not about the company. There was no ownership and no separation between owners and employed. Instead the company was just a scheme to divide revenues and everyone knew how much they were getting from the revenues. The company itself earned very little. It was a very democratic approach. (Liliegren, Interview 2013)

The company eventually ran into problems with this structure. Revenues coming from projects were directly distributed among the people involved in that specific project. No capital was accumulated for future investments or bridging between projects. The structure was open and free but also somewhat unstable, which became apparent when two of the new game projects ran into trouble and were cancelled. The four founders still received money from the pinball games and could continue a while longer, but the newer members were at risk of having to leave the game industry.

The company’s future was in limbo, but an interesting solution appeared at the ECTS in 1995. Fredrik Liliegren ran into a fellow Swede working for Bonnier, the largest Swedish book and magazine publisher. Bonnier wanted to expand into the multimedia industry and was looking for investments. Digital Illusions accepted a merger and the company now started to transform dramatically. A new joint-stock company was formed with a traditional firm structure: a board of directors, business hours, permanent employment and monthly salaries. With strong financial backing, the company also started expanding by employing people from the Swedish demoscene. Fredrik Liliegren says:

With Bonnier we started to hire people. We would check the Swedish demoscene first for the best programmers and graphical artists and ask them if they wanted to start making games instead. It was in this way we found the first employees when we expanded from 8 to 18. Everyone was from the demoscene. (Liliegren, Interview 2013)

The company went public on a stock exchange for smaller companies in 1998. Following this, the company also started expanding through acquisitions. Digital Illusions bought a number of game companies, but the big commercial breakthrough came from the acquisition of another Swedish game company. In 2000, Digital Illusions bought the game studio Refraction Games. Refraction had developed the game Codename Eagle (1999), an FPS game with a World War I setting. The game got a modest reception but had some attention-grabbing innovations like large open levels and drivable vehicles. A game journalist wrote:

Refraction Games were onto something with Codename Eagle’s multiplayer. Unlike the small, largely corridor-based multiplayer shooters of the time, CE featured expansive maps that placed a great emphasis on the control of vehicles, both on the ground and in the air. (Plunkett, 2011)

Refraction was working on a follow-up game called Battlefield 1942, which Digital Illusions went on to release in 2002. The success of Digital Illusions has predominantly been based around the Battlefield franchise.

The company’s success and rapid expansion was not without problems. The disposition of the original group had been somewhat unique. Up until the early 2000s, Digital Illusions had been a small company driven by the passion of a group of like-minded younger guys with similar backgrounds. For the early members, creating games with their friends was a lifestyle. They just happened to get paid for doing their hobby. They often spent 14–15 hours at the office. With the quick expansion, new groups of people, with other backgrounds and standards, entered the company. The old work practices started to create tension. Robert Runesson, one of early employees, says:

We were exhausting people […] It was not an evil scheme by management. Everything just kept on going. It was so natural. We worked like that when we were small; when we grow we just kept on working like that. (Runesson, Interview 2009)

The successes of the Battlefield games ultimately lead Electronic Arts to invest in the company. This, in turn, was the first step towards a somewhat controversial takeover by the publisher in 2005, which resulting in changed Swedish laws. By then, the transformation from a small and informal group into a full-fledged, professional company was complete. Most of the original members had left, and Digital Illusions was now part of a large multinational corporation.

Remedy Entertainment, Finland

Whilst Remedy Entertainment (founded in 1995) is not the very first game studio in Finland – this honour goes to Terramarque (1993) and Bloodhouse (1993) that later merged to Housemarque (1995) – it is probably the single most important company for the first decade of the Finnish game industry. It is also a pertinent choice for our study due to its connection to the demo group Future Crew.

Future Crew was one of the most recognized groups in the Finnish demoscene. It was originally founded already in 1986 in Turku by Sami ‘Psi’ Tammilehto, but it took until the 1990s before they started to actively operate as a group. In the words of Tammilehto:

In the early years Future Crew was something that we did with my friends and classmates. […] All sorts of people came and left but the biggest shift came when Samuli (Syvähuoko) joined. […] I really feel that without Samuli the whole activity would still be something small and just for ourselves. (Demoscene Documentary, 2010)

Samuli ‘Gore’ Syvähuoko, 17 at the time, took his role as ‘organizer’ very seriously:

After I joined, we began to recruit people […] I had heard rumours about good blokes, seen their work, graphics and music or heard that they were competent coders, so I contacted them […]. It was the first recruitment process of my life. I was screening candidates, learned to know them and their skills and taking care that the personality matched the group. (Syvähuoko, Interview 2011)

Soon Future Crew had around 10 active members with ambitious targets. Already their 1992 works Unreal and Panic were highly rated by the demo-making community, but Second Reality (1993) was the piece that is still remembered. Also, it was the last demo Future Crew ever published. Already in 1992, Future Crew was approached by the US company Epic Megagames (later Epic Games) who wanted to recruit the group as shareware game developers. Focused on their current demo projects, Future Crew turned the offer down (Edwards, 2009). Later, Epic famously sent their vice president of marketing Mark Rein to Finland in order to persuade demo makers to develop games for the company. Again, Future Crew members were reluctant, but eventually agreed to show him some games they had created for fun. One of the concepts, a pinball game, later became Epic Pinball (1993). Whilst Future Crew did not collectively take part in developing the commercial version of the game, Misko ‘Pixel’ Iho took the opportunity and worked in the United States for a while creating graphics and designing levels for Epic Pinball.

Despite the somewhat anti-commercial attitude, the activities of Future Crew were not entirely limited to non-commercial projects. Between 1993 and 1994, they created corporate demos at least to Creative Labs, Strategic Simulations, Inc. (SSI) and The Waite Group Press. At the 1994 Assembly, demo party Syvähuoko commented the situation as follows:

Companies keep on calling us, they constantly send faxes asking if we could do this and that. Normally we answer that: yes, we could, but we don’t have time. So this has changed from a hobby to work. (YLE, 1994)

Partly inspired by these commercial experiments, lead coders Sami ‘Psi’ Tammilehto and Mika ‘Trug’ Tuomi decided to explore the commercial potential of their 3D graphics expertise. They foresaw the transition from software rendering – excelled by demoscene experts – to hardware rendering and wanted to continue the pioneer work in the area. Tuomi had started a company called BitBoys already in 1991. Originally, the company provided software development for local businesses, but now the focus was turned to engineering advanced 3D graphics chips (Tom’s Hardware, 2012).

As a result, the group was now without coders. So when Syvähuoko, who had just finished commercial college, began to collect a group to form a game company he had to use his connections within the scene. Remedy Entertainment was officially established in September 1995, and all the founding members had demoscene background. In addition to Syvähuoko, only Markus ‘Henchman’ Mäki represented Future Crew. John ‘Meegosh’ Kavaleff from Rebels was an Amiga scene veteran and one of the founders of Assembly demo party. Programmer Sami Nopanen came from Accession and graphic artist Sami ‘Reward’ Vanhatalo had a background in a group called Complex.

The first office of Remedy was located in Syvähuoko’s parents’ basement in Westend, Espoo. The same space was previously used for Future Crew meetings. What the freshly born development team lacked was a credible game concept and therefore various Finnish demo groups were invited to Remedy headquarters to pitch their ideas. The crowdsourcing experiment was a success and soon Remedy had a handful of early prototypes to present for publishers. In practice, the process was quite straightforward: game demos were mailed abroad on 3½-inch floppy disks. In Syvähuoko’s (Interview 2011) words: ‘The covering letter stated that the best [Finnish] demo groups have now joined forces and are here to revolutionize the game business. I don’t think we had much more to say’.

The first deal was made surprisingly quickly with the US publisher Apogee Software. They were convinced by a racing game demo, and Remedy agreed on significant advance payments to implement the game. Death Rally, a top-down view combat racing game took 13 months to finalize. In a newspaper article from the time, the members of the Remedy team described their first project as ‘chaotic’ and as ‘an exercise’ (Karvonen, 1997). The team’s lack of experience was even more visible in the following game projects that were quickly established. In 1996, group members travelled to the ECTS in London and signed a deal with Virgin Interactive Entertainment on a multiplayer cave shooter titled Guntech. Remedy also cooperated with the UK publisher Psygnosis on a 3D space shooter titled Angel Fighter. Quickly, it became evident that managing more than one game project at the time was difficult for the young company, and these projects almost brought the story of Remedy to closure. Both games were eventually cancelled by their publishers, followed by a long controversy about repaying the advance payments (Syvähuoko, Interview 2011).

Before the development of the next game fully started, Remedy announced a 3D benchmark software titled Final Reality. In many ways, this piece of software paid homage to the demoscene ethos, accentuating the urge to push the hardware to the edge of its ability. Computer benchmarks were, however, a bit far from the core business of Remedy and an entirely new company, Futuremark, was founded to run the emerging business activities. In any case, the first 3DMark versions used and developed further Remedy’s MAX-FX game engine that was later utilized in Remedy’s forthcoming game. This project was first called Dark Justice, but was soon renamed Max Payne.

Apogee, convinced by the success of Death Rally, was lavishly funding the ambitious 3D shooter game. The project started under Scott Miller’s close guidance, and the game was planned for company’s 3D Realms brand. Quick technological changes caused challenges for the development team. Death Rally was still developed for MS-DOS, whereas Max Payne was optimized for quickly changing versions of Windows operating system. At the same time, 3D graphics cards were also developing quickly, and competing technologies were often incompatible with each other. Syvähuoko describes the situation as follows:

They started to fund the project even though we had no deal really. They just sent money because they trusted us. And then they asked how much will you need next month. The payments were increasing all the time, the team size was growing and the schedule was expanding. (Syvähuoko, Interview 2011)

The long development period was also down to the stubbornness of the development team. Instead of using a game engine available in the market, Remedy team wanted to develop one of their own (MAX-FX). One can at least partly claim the demoscene background here again: instead of using someone else’s code, the team wanted to show how to do it right (Volko, 2001). However, the team had no previous experience from developing an advanced game engine that needed to be compatible with a variety of set-ups, and the process ended up being heavily time-consuming. As Syvähuoko (Interview 2011) explains: ‘Honestly speaking, we had no idea how to handle such a large project and how to predict the amount of work. We were just guessing and these crazy people kept on paying’.

Also the surrounding industry environment was quickly changing. First, 3D Realms co-founded Gathering of Developers and Max Payne was transferred to the newly born publishing company. Two years later, when Take Two acquired Gathering of Developers, the game was still in the making. The new publisher wanted to rush the release. Remedy argued that the original deal was made with 3D Realms, and they had agreed to fund the project until the game is finalized. Faithful to the ambitious production values, the development team launched the famous ‘When it’s done’ slogan to accentuate their autonomy and commitment to quality (Kauppinen, 2010). Remedy not only missed this first target release but another graphics update ate up most of 2000, meaning that Remedy also missed the second release date. Max Payne finally hit the stores in July 2001, almost 5 years after the initial agreement.

To the relief of the development team, the game was both a critical and commercial success. But the process ended up being quite stressful. The key members of the team disagreed on priorities and future strategy, and some, including founder and CEO Syvähuoko, left the company before the release (Koistinen, 2013: 61). The company, however, was safe, as Remedy had wisely preserved the rights to Max Payne franchise. Selling the rights to Take-Two in a multimillion dollar deal guaranteed the company’s independence for the years to come.

Funcom, Norway

Unlike Digital Illusions and Remedy, the Norwegian game developer Funcom did not spring out of a demo group. The company was established in Oslo in 1993 by Erik Gløersen, André Backen, Gaute Godager, Olav Mørkrid and Ian Neil (Zackariasson, 2007: 58), five young men with varying experience from game development. Olav Mørkrid was the only one among the founders with a name in the demoscene, with a history in Commodore 64 groups such as Panoramic Designs, Rawhead and The Shadows (Recollection, 2006). Further, Gaute Godager had been involved in hobbyist development (Gamespot, 2008), and Erik Gløersen had experience from professional game development abroad (Backen, Interview 2014).

Instead of being headhunted for their hobbyist projects like Future Crew, or actively searching for a commercial venue based on their reputation in the demoscene like Digital Illusions, Funcom began with a decision to establish a game company without having a reputation among peers or industry. Founder André Backen (Interview 2014) explains that in addition to a common interest in games, the founders were motivated by Nintendo’s success and the fact that the game industry developed into one where big money could be made. Knowing Nintendo’s technology and having accessibility to good programmers in the demoscene and elsewhere, the founders were confident that they would be able to create good games if only they got funding. Gløersen and Backen spent the first months visiting expositions and conferences to establish connections that later would lead to development contracts (Backen, Interview 2014). The company expanded rapidly and rose from 5–200 employees in 1.5 to 2 years (Godager, 2003: 292). The company got a contract with Disney and released their first productions A Dinosaur’s Tale and Daze before Christmas in 1994. The same year they established two branches abroad, Funcom Dublin Ltd. and Funcom B.V. (Gransmo et al., 2003: 6).

For Funcom, the demoscene was an important recruitment arena, but not the only one. They also actively approached students at Norwegian universities and institutes of technology (Backen, Interview 2014). According to Backen, the company wanted the very best programmers with high motivation, regardless of background, and in practice, many of the best had a background from the demoscene or hobbyist development, often in combination with formal education in programming. Backen describes the model recruit in this way:

It concerns a blazing interest for the trade, which they got into at a very young age. This interest was often initiated around the age of 11 or 12, and most of them had started with programming. And at first they were flipping through magazines, learning some on their own, and the next step was the demoscene, and then the next step was university. So that was kind of the process. But those who did not have a glowing interest for this before they started studying informatics, they would lack maybe 8 or 10 years of relevant programming experience that others had achieved. (Backen, Interview 2014)

In the early 1990s, few had an interest in games combined with long programming experience. In that context, demoscene background was a benefit because such recruits generally had more experience with programming than those that had learned programming only as part of their education. In the context of game development, recruits with demoscene or hobbyist experience also had specialized competence with the relevant tools. Whilst recruits who trained their programming skills at university had experience from powerful mainframe computers, the classical demosceners had their primary experience from utilizing the limited resources of home computers:

The autodidacts, that is people from the demoscene, often had very limited computing resources from which they made stuff. They were very good at exploiting absolutely everything inside the computer’s hardware. And that was not often the case with people who came from academic environments. They generally had more powerful computers to work with, and for them it may have been difficult to adjust to a small computer. (Backen, Interview 2014)

Home computer development gave demoscene recruits an advantage in the game industry, mostly because they had first-hand experience with the computer’s capabilities gained through exploring and experimenting with the technology. This is also supported by Godager who in an interview with Gamereactor magazine explains that Funcom in the beginning recruited all their programmers from the demoscene and that this gave the company an advantage in getting converting contracts because of its expertise in assembler programming (Lorentzen, 2008). This in-depth knowledge of the limitations and capabilities of the technology was also a likely benefit when Funcom started to focus on online games, which was largely unexplored in the early 1990s. The company released their first online product, a multiplayer Backgammon, in May 1997, which was followed by other online games, mostly digital conversions of existing games (Gransmo et al., 2003: 7). Their idea for their first MMO was presented in 1994 (Godager, 2003: 294). The project was given the name Anarchy Online in 1997 (Zackariasson, 2007: 61) and finally released in 2001.

As the first sizeable game company in Norway, Funcom received attention nationally, and contemporary news articles told a story about a company with close ties to ‘hacker culture’ and where young employees could bring their hobbyist routines to the game development work at Funcom (Røed, 1996). Here they could use their programming skills for creative purposes for fifteen hours a days or more and ‘even get paid for it’ (Feldberg and Schønhaug, 1996). A casual leadership style was also illustrated by no dress code and young managers who insisted that the employees address them by first names (Røed, 1996). According to Backen (Interview 2014), however, the less formalized work practices of ‘hacker culture’ was not reflected in the actual work practices in the company. Whilst many of the employees were indeed very young and had little experience with professional life, a major challenge was to establish working systems and routines for a company that was rapidly growing. The founders were in their 20s and were suddenly leaders of a company of 200. Backen explains:

All companies that expand a lot need to establish routines and systems that are comply with the organization and the products they are going to make. (…) We had high growth, and we were very young – I was 25 when we were doing this. Erik [Gløersen] was my age and we were the two oldest ones. Well, you get staff responsibilities, economic responsibilities. There’s a lot that needs to get in place and in addition you need to tackle big companies like Nintendo, Disney and JVC – huge organizations that expect you to deliver. And that’s a challenge for most people. (Backen, Interview 2014)

Whilst rapid expansion was one challenge, another challenge was the relationship to the game publishers. Godager describes an inexperienced game company’s meeting with an immature and also cynical publisher culture. Publishers went bankrupt or bought the rights to the developer’s games simply to delay them to give first-party developers an advantage (Godager, 2003: 293). This created the background for becoming a self-publishing developer at the launch of the adventure game The Longest Journey (Godager, 2003: 294).

Eventually, the challenges connected to Funcom’s expansion and disagreement about the direction of the Anarchy Online project created internal conflicts in the company (Godager, 2003: 295; Zackariasson, 2007: 81). In 1996, the company was in dire need for reorganizing, and the company got new management, structure, strategy and financial control (Gransmo et al., 2003: 7). Despite the challenges faced by the company in their early years, and the problems they experienced with the release of Anarchy Online, Funcom has continued to be an important developer of massively multiplayer online games.