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THE BEGINNINGS OF GAME DEVELOPMENT IN THE PHILIPPINES Game development in the Philippines had existed in the Philippines as early as 1992, with the entry of console and arcade game content development for Japanese publishers such as Sega. Several Philippine-based developers were established at this time, including Micronet Software Manila and Japan Media Programming-Cebu. Micronet Software Manila (MSM) was established as a subsidiary of Japan-based Micronet Co. Ltd. to produce exclusive game content for various console platforms such as the Genesis, Sega CD, Game Gear, Super Nintendo and PC Engine.1 Japan Media Programming-Cebu (JAMP-Cebu) was set up by a Japanese businessman in 1997 to produce games for the merchandising company Sanrio of Japan.2 Since most of the content developed by these companies was for the exclusive use of their Japan-based holding company, much of their achievements had not been heard of in mainstream media. In a way, these companies pioneered the concept of offshore outsourcing in game development. After the Asian financial crisis in 1997, most of these game developers had began downsizing their Philippine operations as a result of a shrinking global market for entertainment products such as computer and console games. By 1999, both MSM and JAMP-Cebu had shifted their business to producing animated and digital content development for the institutional market, including architectural design, animation software development, and TV commercial production. JAMP-Cebu was re-launched as Booom!! Interactive, Inc. in October 2003 as a result of the company’s change in business. MSM remains in animated content development, providing offshore development for its Japan-based holding company. In mid-1997, however, a small company called Id Software launched a game called Quake into the Windows platform. Id Software was an independent developer and unlike previous games, Quake was developed, published and marketed by the same small company. This reduced the overhead cost of developing computer game products, which had previously been mostly in advertising and promotions. Id Software also relied on what would soon be called viral marketing – distributing freely playable demo versions to the general public, allowing for a grassroots movement to create the demand for the full-fledged final product. The emerging popularity of the World Wide Web at that time allowed for the global release and promotion of the Quake game with very little overhead for Id Software, becoming a preview of future marketing practices for the industry. By 1999, Id Software had demonstrated that small independent developers can produce, promote and market their own products to the global market with very little advertising and promotional budget.

THE EMERGENCE OF LOCAL START-UPS The success of Id Software created a widespread emergence of independent developers in the succeeding years, such as Bioware (published by Black Isle Publishing, developers of the popular Baldur’s Gate and Neverwinter Nights games), Blizzard (developer of Starcraft, Warcraft and Diablo), Valve Software (developer of the widely popular Half-Life games) and Digital Extremes (developer of the Unreal games, which
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© 2008 Cesar S. Tolentino

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was published by GT Interactive). By 2000, the success of these start-ups had inspired other independent developers including in the Philippines. Among the game developers that emerged from 1999 onwards were Gammansoft, Dalirium Games, Boogs Software, Fluxion Games, Softtouch Software Design, eSoft Interactive and Anino Entertainment. By 2001, the realities of game development project management issues and the technical expertise needed to sustain and complete end products had set in, and a majority of these companies began experiencing financial problems. By 2002, only a few companies remained in game development – among them Anino Entertainment, eSoft Interactive, and Fluxion Games.

THE GROWING POPULARITY OF GAME DEVELOPMENT AS A BUSINESS Game development in the Philippines only started entering the mainstream media community when development for the first RPG (Role Playing Game) started in October of 2001.3 The game, entitled Anito, was soon launched in 2003. Owing to good story development and art design, the company eventually acquired a following in the local market and in Eastern Europe.4 However, constraints on marketing and promotion budgets resulted in limited media exposure to the biggest market for game products, the United States. This was in spite of the fact that Anito received high ratings from game review sites as RPGVault,5 GameSpot6 and Game Tunnel.7 As a result, the entry of game development companies in the Philippine business community eventually received little attention from both media and the government during its infancy years. Some interest emerged in late 2003 with the announced partnership between ePLDT and Anino Entertainment, developer of the Anito RPG.8,9 This partnership entailed marketing and cross-bundling rights to games developed by Anino including the Anito franchise. It eventually resulted in the development of spin-offs for Anito, including a game called Anito: Tersiago’s Wrath, a product exclusively developed for the mobile platform and distributed by Globe Telecom, Inc.10 After three years of entering the game market, Anino eventually obtained some success posting positive revenue growth. By 2005, Anino Entertainment confirmed the viability of establishing a Philippine-based business exclusively for game development. The anticipated success of Anino Entertainment was already apparent as early as 2003 and this encouraged the entry of other game development companies. Unlike the previous homegrown start-ups, the next wave of companies was heavily capitalized to allow for long development times. Among these companies were Laro Co. (later renamed PixelStream11), Matahari Studios, and Flipside Games.12 13
3 4 5 6 7 8 9 10 11 JETRO Philippine IT Industry Update 2007 No. 1 (Feb. 2007)

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COLLABORATION AMONG GAME DEVELOPMENT COMPANIES 2003 also saw the increasing collaboration among local game development companies, resulting in the establishment of the Philippine chapter of IGDA, the Independent Game Developers Association. Among the pioneer members of IGDA were Ranulf Goss (of Slycesoft), John David Uy, Gabby Dizon (then with Anino Entertainment), Niel Dagondon (also with Anino), Buddy del Rosario (ePLDT), Raffy Cabredo (De la Salle University), Alex Calero, among others.14, 15 By 2007, the major game development companies who were also part of IGDA established the Game Developers Association of the Philippines (GDAP) in order to further expand the global exposure of local game developers and improve their promotional capabilities. The intent was to consolidate the efforts of individual companies in promoting the capabilities of Philippine developers towards servicing the requirements of international publishers such as Electronic Arts. GDAP’s founding members included Anino Entertainment, Anino Mobile, Flipside Games, Glyph Studios, Matahari Studios, PixelStream, Skyrocket Interactive (now defunct – it’s founder, James Lo, launched a new company named Indigo Entertainment which eventually joined GDAP), and Secret Six.16 The successful promotion of the local game development sector via GDAP’s participation in the September 2007 Game Conventions Asia (GCA) in Singapore confirmed the viability of sustaining and expanding the collaborative environment of the Association. This resulted in GDAP’s commitment to attract other game developers to join the Association and to continue the organization’s medium-term development plan.17 GDAP was also successful in obtaining more than $0.9 Million in contract proposals from the same event,18 further indicating the viability of GDAP as a legitimate industry association. In January 2008, GDAP joined the Business Process Association of the Philippines (BPA/P) and officially started collaboration with CITEM for the promotion and development of the local game development industry to the global market. In 2006, the Philippine outsourcing industry (which included game development) generated an estimated US$3.7 Billion in revenues and employed about 103,000 professionals. It is estimated that the industry will grow to an estimated US$12.4 Billion by 2010. At the same time, global games development is expected to reach US$2.5 Billion by 2010. GDAP is committed to gaining a significant piece of this game development outsourcing pie.19

12 13 14 15 16 17 18 19 http:// PRWeb Newswire (5 September 2007) PRWeb Newswire (5 September 2007)

© 2008 Cesar S. Tolentino

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