Despite a few successes, the early 2000s were a difficult period for the Finnish Game Industry. Risky investments in gaming were halted, and despite a promising start, mobile game development also ground to a halt. Publisher-driven PC and console game development was too challenging for most small game studios.
Luckily Nokia saw a business opportunity in mobile games. Nokia was confident that its N-Gage PDA, launched in 2003, would revolutionize mobile gaming and therefore invested in the development of game content for the handset, including investments in Finnish companies and their games.
The N-Gage failed. The device was expensive to manufacture, clumsy to play on and games were distributed only in traditional brick-and-mortar stores. Still, the foundation for the mobile game ecosystem had been laid, and a number of new game studios were established in 2003–2005, including Sumea (later known as Digital Chocolate) Mr. Goodliving and Universomo.
Towards the end of the 2000s, the Finnish Game Industry ecosystem continued to grow steadily. What was once a hobby had finally transformed into a serious sector of its own.
However, growth was relatively slow. The turnover of the game industry grew from around 40 million euros in 2004 to approximately 87 million euros in 2009. The relatively slow growth is explained by the value chain of the distribution of the games, which was functional but not particularly profitable for the game developer. But change was coming.
The digital distribution of games became the true driver of change in the gaming industry. Digital distribution first began on a PC platform but later expanded to consoles and smartphones through Apple’s App Store and Google Play.
The new distribution methods represented a change in the balance of power within the industry. With digital distribution and app stores, game developers were able to reap 70 % profits instead of the former 15–25 %. This made a huge difference, and Rovio’s Angry Birds and its sequels were among the first to benefit from these new opportunities.
As markets opened and international investors started to take interest and make investments in Finnish companies, the number of game studios blew up. The turnover of the industry almost doubled in just two years, from approximately 87 million euros in 2009 to 165 million euros in 2011.