Hotter than Hollywood

In October 2004, Sefton Hill and Jamie Walker lost their jobs at Argonaut, a leading UK video-games developer. It had collapsed and been forced into administration, along with 20-odd other studios. Sitting in Walker's attic in Finchley, they drew up plans for a new company, with a simple goal: to make the best games on the market. They found a temporary office around the corner, called their company Rocksteady Studios and started coding. This October, they released Batman: Arkham City, which sold 4.6 million copies in its first week. Its previous title, Batman: Arkham Asylum, hit the market apparently out of nowhere in 2009, quickly became a smash hit and won a BAFTA (yes, there's a best video game category). Now, Rocksteady has more than 100 employees. 'I never thought it would be as successful as it was,' says Hill. 'But the industry is growing and becoming more and more mainstream.'

Hill is understating the case: video games, from titles such as Arkham City for consoles, to free-to-play Facebook games, are the biggest entertainment business in the world. Call of Duty: Modern Warfare 3 (from US developer Activision) took a record $775 million in the first five days of its release and is expected to top $1 billion by Christmas. To put that in perspective: the biggest-grossing film of 2011, Harry Potter and the Deathly Hallows Part II, took only $202 million in its first five days.

'Modern Warfare 3 is the biggest entertainment release ever, on any media,' Ian Livingstone, life president of Eidos (now part of Square Enix), the Wimbledon studio behind the Tomb Raider series, tells me. The first-person shooter game is leading the charge, but the whole sector is thriving. The global games industry was worth $66 billion in 2010, according to DFC Intelligence; it will reach $81 billion by 2016. Compare that with films: the Motion Picture Association of America said the global box-office take for 2010 was $31.8 billion.

And as the gamers are getting less niche, so are the developers. 'We have people who are nerdy, but also people from the mainstream,' says Hill about Rocksteady. 'We're competing with advertising agencies and film studios for staff.' Although Hill and Walker have worked in games their whole careers, they are not antisocial dweebs, and style-wise they've ditched ill-fitting hoodies for V-necks and plaid shirts. But there's still a veneer of geek to the Rocksteady offices in Finchley Central. The entrance is an industrial, rusted-steel door, echoing Batman: Arkham City's own moody aesthetic. A life-size model of the Dark Knight stands guard. Inside, hundreds of magazine covers adorn the walls, and a trophy cabinet boasts a clutch of awards for Batman: Arkham Asylum, including the BAFTA. They're now building a bigger trophy cabinet, in expectation.

It's less Dungeons & Dragons than slick office space, with 100 designers, artists, programmers and audio technicians sitting together in a sleek open-plan, purpose-built converted factory, sip-ping on unlimited free Ribena cartons. Plants and plasma screens dot the space. A large board full of neatly arranged Post-it notes, showing the company's production schedule, occupies one wall. Rocksteady employees work hard. 'During projects, we do incredibly long hours, for a very long time,' says Walker, 40. The 'crunch' for Arkham City lasted about eight months, with people working until 11 or 12 each night, with an 8am start. 'When I started working in the industry 20 years ago,' he goes on, 'you used to work until three or four in the morning, then roll in at ten the next day. We're a bit more professional now.' Rocksteady doesn't allow its employees access to the internet during the day ('culturally quite a shock,' says Walker) and has created a scheduling system to monitor each designer's progress: 'If you haven't done the task, the system knows and lets your manager know.' The idea isn't to terrify employees into activity, he says, but to let managers know what's holding up the process. The system also measures employees' happiness, asking them to rate how content they are out of ten each week. It sounds intense, but only seven people have left the company of their own accord in seven years.

Rocksteady is one of a handful of London studios making big games for consoles. Sony Computer Entertainment London occupies a seven-storey office in Soho, where it develops the SingStar series of games for PlayStation. Splash Damage, an independent studio in Bromley, produces multiplayer first-person shooters such as Enemy Territory: Quake Wars, and Brink. Rockstar, which created the Grand Theft Auto series, has its European publishing headquarters in SW3, although the company is based in New York. Rockstar's founders, brothers Sam and Dan Houser, along with Terry Donovan (brother of the TV comedienne Daisy Donovan), grew up in London and attended St Paul's School. They didn't take their cues from the video-game industry: 'We were more heavily influenced by companies working in other media [than video games], which had a sense of style that we admired - record labels, obviously, and clothing companies, which were obsessed with details and with an integrity between design, product and marketing,' Dan Houser told the Design Museum. Grand Theft Auto showed that games could be for grown-ups, and sell better than any record: the series has sold more than 124 million copies (Michael Jackson's Thriller album has sold about 110 million).

These days, competition among the top tier is tough: AAA titles (big blockbuster games on consoles) cost a lot to make (Modern Warfare 3 probably cost about $50 million to develop and $150 million to market) and can sink a studio if they don't sell. 'There are fewer and fewer AAA titles,' says Hill. 'If you're outside the top tier, it's difficult.' But Walker is optimistic, especially about London's prospects: 'It's a great future. It pays well, it's very enjoyable and it's creative no matter what you do. Games definitely still have some stigma but it's an amazing opportunity: there are lots of studios in London. As a British industry we have the opportunity to be best in class. In the world.'

In the UK alone, 31 million people play games - more than half the population - for a combined total of 43 million hours each day. Newzoo, a research company, estimated that gamers spent £3.6 billion in the UK in 2011. And video games are not the sole preserve of spotty teenagers: 42 per cent of all gamers are female. In fact, women over the age of 18 represent a much greater proportion of the game-playing population than boys aged 17 or younger. 'The second golden age of games is happening right now,' says Livingstone.

Rocksteady codes its games, puts them in boxes and sells them through traditional outlets. However, that method is becoming the exception rather than the rule. 'The world of gaming has changed dramatically with the rise of connectivity and social networks,' says Kristian Segerstråle, co-founder of Playfish. 'Games are moving from being physical products, played on a stand-alone basis on big screens and paid for upfront, to digital services played on multiple platforms and paid for over time.'

In 2007, Segerstråle and three other co-founders started Playfish, from an office in Kensington, to develop games played on Facebook. The company now has five other studios around the world, in Beijing, Norway, Montreal, San Francisco and Tokyo, and in 2009, it was acquired by Electronic Arts, a major American video games company, for $400 million. London was the perfect place to launch. 'London is a city with fantastic technology companies, innovative thought leaders and great talent,' says Segerstråle, who studied at Cambridge and the London School of Economics. 'But more so, London was home to a lot of pas-sionate and talented entrepreneurial-minded people who weren't afraid to work hard, and try again and again to push technology and services forward. As we set out to revolutionise social gaming, working with this talent was critical. It still is.'