Network: From bedroom to boardroom

Success as a games developer seems to be measured in the number of Ferraris in your front drive. And, for a select few developers, when it comes to Ferrari-counting, well, it's a good thing they've got toes as well. But something else connects these multimillionaires: they are almost all British.

There is something about British developers that has brought them world- wide success in a highly competitive, global industry. Indeed, the games pop charts are currently headed by a British game, Colin McRae Rally by Codemasters, a company started by Richard and David Darling back in 1986.

Yet now is a crucial point for the British industry as it enters its third stage of development. Having started with a slew of youths spending too much time with their computers and then suddenly making fortunes as a result, the industry went through a period of rapid consolidation and corporatisation. Now, however, there's a backlash, as those same creative minds that shaped the industry find that they have the power, and the resources, to go back to their roots. However, today's spotty youths should not necessarily expect that their slavish devotion to games will bring them the same rewards.

The British games boom began in the early Eighties when Ataris, BBC Micros and Sinclair ZXs were starting to find their way into boys' bedrooms, distracting them from such pursuits as outdoor sports and human interaction. These proto-PCs were not powerful and they were not sophisticated, but that was part of their allure. A bit of application and a lot of time could force them to do fairly impressive feats. And the skills learnt were turned, inevitably perhaps, into producing games. As Paul Topping, marketing manager of Rebellion, a leading British games developer, puts it: "We are the Sinclair generation."

Initially, these games were either for personal edification or for sharing with friends, but the ability to connect computers to each other and share data between them - using modems, even though modems were slow and expensive - meant that games started to proliferate. It was a simple if time-consuming process to send your games electronically to friends, who would then send them on to their friends.

In the early Eighties, this was the main way games were distributed, and those taking this route (which soon became a completely new distribution channel in itself) positioned themselves for the wave that was to follow - a wave that now sees a blockbuster game release outsell a blockbuster studio film.

And, all this time, the Americans were nowhere to be seen. The reason, ironically, is that the technology available in the US was too sophisticated. Mike Hayward, managing director of CyberLife Technologies, the producers of Creatures, explains: "The Commodore Amiga and Atari ST were released here [in the UK] with an operating system that people could get their hands on, so there was more of a culture of people programming on that type of machine. In America, the big boom came with the PC. Before that, it was Atari and Nintendo [non-programmable] games consoles, so you didn't have people in the home who were programming."

Indeed, most countries with a healthy games developer community today share this feature. "If you look at any European country that had any installed base of Amigas, there's a culture of programming," says Hayward. "Sweden, Holland - although they're mostly hackers - France and others. But the bulk of the talent was here."

Simple times also required simple economics. As a nascent industry supplying relatively unsophisticated consumers who used relatively crude hardware, not much was needed, and many of today's market leaders remember, more or less fondly, those bedroom beginnings. Hayward "started in 1987 and we really did have people working in garages". Jason Kingsley, who set up Rebellion with his brother, recalls that it was then "a damp basement". Peter Molyneux, one of the superstars of games developers, remembers: "I was in a grungy little office working on Amigas held together with shoestrings and the whole company was financed on my credit card."

The capital costs were equally undaunting. "All you needed," recalls Hayward, "was to buy four people Amigas with hard disks and a copy of Deluxe Paint each, which was pounds 50." In those days, it took six to nine months to create a title and it could probably be brought to market for pounds 15,000 to pounds 20,000.

Then the console phenomenon struck. In 1989, Sega and Nintendo arrived on a wave of such stupendous success that even the City took notice of their profits of around $1bn on turnovers of $3bn.

The City also noticed that people such as Molyneux, Fergus McGovern, the creator of Mortal Kombat, and the Darling brothers were kid millionaires. The Darlings are a typical example. Starting off in their bedroom as teenagers, they had an early success with BMX Simulator in 1987 but made a lot of money, pounds 2.2m or so, by standing up to the might of Nintendo when it sued them over their Game Genie program. They now run a pounds 20m organisation based in Southam, Warwickshire, in an office on their parents' farm. Now that they've made the Sunday Times 500 Richest People list, they've become somewhat embarrassed about their wealth, hiding away from the press.

Suddenly, everyone saw that this was a market with potential, and big business got involved. Sony, Electronic Arts, Psygnosis and (mostly American) venture capitalists were keen to bring the industry into its second, mature phase. A lot of small bedroom companies were bought up by the big boys until, as Molyneux puts it, "three or four years ago, it was hard to think of any independent studios left". Instead, what you had were these large studios of 100 or more people.

As the industry matured, so did its market, not so much in terms of the consumers' age - they remain teenage boys - but in the hardware that they were using. Suddenly an Amiga and a painting package were not enough. Part of this was driven by the raw processing capability of the now-prevalent PC, but part was the distribution medium: the CD-rom was flourishing but designers felt obliged to fill it up.

This meant designing ever more complex games, with detailed artwork. But it also meant CD-quality sound, needing expensive studio time and technicians. Each developer on the team can probably expect to work with a Silicon Graphics workstation costing pounds 30,000 to pounds 40,000, plus expensive maintenance. Teams have swelled now to start at about eight people and have been known to go up to 100.

A typical game can cost upwards of pounds 1m and take around two years to develop. At the same time, the business has, like its film counterpart, become largely hit-driven: at this summer's E3 trade show in Atlanta, there were some 2,500 new titles being punted around. Of those, estimates Molyneux, no more than three or four will make big money.

Now, however, the whole industry is moving into a third, counter-revolutionary phase. Many of the creative geniuses who masterminded hugely successful titles have suddenly realised that they do not enjoy the structured corporate world, spending all day in interminable meetings. The last year or so has seen many key players leaving the large studios and returning to their roots in small companies. Molyneux has left Bullfrog, which he sold to Electronic Arts, to form Lionhead Studios; others have followed. In Guildford alone there are five start-ups staffed by creative developers from Bullfrog.

Mike Diskett, managing director of one of these companies, Mucky Foot, explains: "They [the big corporates] want predictability. They want game development to be like Microsoft developing an operating system, like software engineering.

"They solve problems of slippage by making the teams bigger. That's what we wanted to get away from." This idea of "slippage", where release dates are constantly pushed farther and farther away, as unforeseen difficulties or troublesome bugs eat up development time, is a significant industry problem.

Games will always "slip", Diskett says, even when you schedule for the fact that games will always slip. Unfortunately, this does not mean that bedroom games players can hope to follow so easily in their heroes' footsteps. It is a risky, high-cost operation and you must have industry experience, preferably as a creative lead on a successful title, somewhere on your team.

"You need deep pockets," says Steve Cheese, of the European Leisure Software Producers Association. "That's good and bad. The reason that the UK has been so successful is our creative side, which hasn't been stifled by big corporations. In the US, it's just sequels. I mean how many Quake clones are there? Whereas here we are coming up with innovative stuff, like Dungeon Keeper from Bullfrog.

"The third stage is only for those who've been in the industry a long time. They love to create games... they do not want to work for big corporations, and they've got to the stage where they can do that."

Of course, this staff haemorrhaging can put the strain on the company left behind. "Bullfrog," says Molyneux, "is in a period of transition... whatever that means."

That means, I say, that he left and took all the Ferraris. He just laughs.