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Video game software clicks in isles

  • BLOOMBERG NEWS
    A report by the Entertainment Software Association shows that growth in the video game industry is outpacing growth in the economy as a whole. U.S. video game sales reached $10.5 billion last year. In Hawaii the economic contribution amounted to $23.3 million for the state's economy, and the industry created 165 jobs last year.
  • STAR-ADVERTISER
    The rights for the age-old game "Tetris," above, are administered by the Blue Planet Software offices in Honolulu.
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Hawaii’s fledgling video game software industry added $23 million to the state’s economy last year, ranking it near the bottom of 26 states surveyed by an industry trade group.

But the high salaries, low environmental impact and growth potential of the industry make it an attractive addition to Hawaii’s economic mix, government officials and private experts say.

The new report by the Entertainment Software Association estimates that five video game companies in Hawaii generated $23.3 million in economic value last year, including 165 direct jobs with an average annual salary of $83,335.

Although Hawaii ranked 23rd out of 26 states surveyed in terms of the economic contribution of the video game industry, the state was eighth on the list on a per capita basis.

And the 10 percent annual growth rate of the industry between 2005 and 2009 far outperformed the 1.4 percent annual growth rate of the economy as a whole.

"Hawaii’s computer and video game companies make an increasingly important contribution to the entertainment software industry and play a vital role in maintaining the strength of the entertainment software industry as a whole" said Michael Gallagher, ESA president and chief executive officer.

The video game industry nationwide has experienced rapid growth over the last decade, with sales of games reaching $10.5 billion in 2009, according to ESA Group. Although down from a record $11.7 billion in 2008, the sales still surpassed last year’s movie theater box-office receipts of $10 billion.

With the attraction of Hawaii’s lifestyle, combined with high-speed Internet service and a growing pool of local designers, the video game software industry is in good shape to continue growing here, said Chris Lee, founder and director of the University of Hawaii’s Academy for Creative Media.

TOP 5, BOTTOM 5*

State Direct Jobs Economic Impact
1. California 13,041 $2.16 billion
2. Texas 3,307 $491.5 million
3. Washington 2,986 $479.7 million
4. New York 1,650 $268.8 million
5. Massachusetts 1,295 $182.9 million
 
22. Nevada 165 $23.7 million
23. Hawaii 165 $23.3 million
24. Wisconsin 165 $23.2 million
25. Louisiana 99 $14 million
26. Missouri 99 $14 million

 

* The survey covered only the 26 states with a significant video game industry.

Source: Entertainment Software Association

"Broadband connects us in ways that the shipping industry cannot," Lee said. "Creative media and IT (information technology) innovation are two things America does better than anyone in the world, and we can do them in Hawaii."

"The theory behind our school is to create a 21st-century work force for companies that want to locate here. You have to have a vibrant creative media school."

He said Henk Rogers, whose Blue Planet Software offices in Honolulu administer the worldwide rights for the video game "Tetris," fits that profile.

"He’s located here partly because of the lifestyle we have and partly because of the talent we produce," Lee said.

Earlier this year "Tetris" surpassed more than 100 million paid downloads on mobile telephones since 2005, making it the best-selling game on cell phones.

Rogers also co-founded a Hawaii-based video game company called Avatar Reality, which created the multiplayer online virtual world platform "Blue Mars."

The company, which employs about 50 people in its Honolulu office, gets a strong response whenever it posts job openings, said Glenn Sanders, the company’s community director.

Avatar Reality, with offices in Honolulu and San Francisco, raised $4.2 million recently from venture capitalists, including Rogers and Honolulu-based Kohala Ventures.

Local colleges and universities need to do their part in providing the trained work force the video game industry seeks, said Yuka Nagashima, president of the High Technology Development Corp., which oversees the state’s business incubators.

"It has a low impact on the environment, and it’s something we want to grow," she said.

Although tourism will continue to be the backbone of the economy, the diversification provided by industries like software design is important, Nagashima added.

"IT (information technology), especially the video gaming software industry, need human capital. We need to put more effort and focus into education and work-force development."

Altough the ESA study was limited to video game design companies, Hawaii has been successful in attracting other creative media companies.

Toronto-based Entrenched Inc. expanded to the islands in February and opened Hawaii Animation Studios.

Entrenched’s credits include "Nine," "The Pirates Who Don’t Do Anything: A VeggieTales Movie," "Everyone’s Hero," "IMAX 3D Space Station," "NASCAR 3D," "Cyberworld," "Game Over" and "X-Men."

The company has hired about 30 animators and other workers, mostly from UH’s Academy for Creative Media and Kapiolani Community College.

 

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