Industry growing in western Travis County

Texas is home to the second most video game companies in the United States, according to the Texas Film Commission. During the past three months western Travis County has gained two new gaming studios—Cloud Imperium Games and Hellfire Games—for a total of eight video game businesses located on the edge of the Hill Country.

“Video games are close to being a $100 billion-per-year business,” said Warren Spector, a local 30-year veteran of the video game industry and creator of games such as “Deus Ex” and “Disney Epic Mickey.” “With the advent of Facebook, tablets and the iPhone, it’s hard to find someone who doesn’t play games,” he said.

Video-gamers gravitate to where other developers are, and, in Central Texas, that has historically been northwest and downtown Austin, he said. Spector credits the northwestern studios to the availability of business space, parking, proximity to restaurants and supply stores in the area.

“The gaming industry goes in cycles—it grows and shrinks,” Spector said.

He said a studio startup may expand to 200 or 300 employees before shutting down a few years later. New, smaller studios then take hold in place of the larger gaming companies, he said.

“[Industry] growth will be in the independent scene—smaller studios that don’t have ties to major players,” Spector said.

Aspyr Media

Almost two decades ago, brothers-in-law Michael Rogers and Ted Staloch found a unique niche in the video game business.

Rogers said Aspyr Media, 1250 S. Capital of Texas Hwy., Bldg. 1, Ste. 650, Austin, began after many large gaming companies left Apple Computer’s platform.

“I thought if the big guys were leaving this [Macintosh] space, there might be room for some little guys,” he said.

Aspyr buys the license for a video game made for one platform and converts it into a format that can be played on a Macintosh computer, he said. It pays a royalty to the licensor and assumes the risk of developing and publishing the game, he said.

“The [licensor] gets a stream of income from a user group they wouldn’t have touched otherwise,” Rogers said.

With money borrowed from friends, family, credit cards and 401K plans, the business partners set up shop in Rogers’ Austin home in October 1996.

Now in their fifth Austin office, Rogers and Staloch continue to convert games into the Macintosh platform and have expanded to other format conversions including Nintendo DS, Microsoft’s Xbox and Sony’s Playstation.

Rogers said he found talented engineers in Austin and that his company offers the appeal of video game production without the uncertainty of whether the game will be successful.

In the 1980s, most of the local video-gaming staffers worked at video game development company Origin Systems Inc., which was purchased by Electronic Arts in the 1990s, Rogers said.

Some employees broke off and started smaller, independent studios in the area. They were motivated by state incentives for video-gaming companies, low cost of living, age demographics and the fit lifestyle the area provided, said Staloch, Aspyr Media’s executive vice president.

“It used to be that every [gaming company] wanted to be downtown,” he said. “But traffic, travel time and difficulty finding smaller blocks of [office] space changed that.”

Staloch said video-gaming companies are relocating to newer buildings in the suburbs equipped with better technology wiring that downtown Austin sites lack.

Affordable housing, good schools and restaurants for employees also entice gaming companies to the city’s western suburbs, he said.

“There are more and more [game] devices out [for game playing],” Rogers said. “Our job is to carve out places where we can be a good partner to [technology] companies.”

Cloud Imperium Games

After relocating earlier this year from a small, downtown Austin office to a 14,000-square-foot site in the Hill Country Galleria, Cloud Imperium Games, 13420 Galleria Circle, Ste. A250, Bee Cave, is poised for growth.

The independent video-gaming studio, founded in April 2012 by Chris Roberts, recently reached $39 million in a crowdfunding campaign to finance future project “Star Citizen,” Public Relations Director David Swofford said.

“We launched [the crowdfunding campaign] on Oct. 10, 2012 at 10 a.m.[EST]—a significant number in ‘The Hitchhikers Guide to the Galaxy,'” said President of Development Eric Peterson of the Douglas Adams novel in which the answer to life would be revealed Oct. 10, 2010.

“We felt that once we raised $2 million, we could prove to the investors there was a marketplace for our product.”

He said the funding campaign raised $6.23 million in 35 days. Cloud Imperium kept the campaign going, reaching $10 million in June and another $29 million since, he said.

Peterson said the staff decided the company’s first office would be located in Austin—a 2,800-square-foot space on 18th and Rio Grande streets. At the time, the company had five or six employees who worked remotely, he said.

Six months and 36 employees later, the company relocated to Bee Cave where it produces weekly webshows “The Next Great Starship” and “Wingman’s Hangar.”

“There’s a huge pool of talent in Austin,” Peterson said. “There’s a lot of video game developers [and] video game development programs at Austin Community College and The University of Texas.”

Why Austin?

Swofford credits today’s resource of local talent to Origin Systems Inc.’s rise in the 1980s.

“Austin’s always had this tech/art combo thing going in the city,” he said. “The guys we used at Origin were artists [drawing posters at] Armadillo World Headquarters. We took those guys in—Sam Yates, Micael Priest—and taught them how to use a computer for their drawing.”

Swofford said Austin is viewed as one of the main gaming centers in the nation.

“With South by Southwest, [Austin is] a real hotbed for exactly what we’re trying to do in gaming, and that is high tech art,” he said.

The relatively low of living in Austin is further reason for the industry’s growth in the region, Peterson said.

Cloud Imperium considered spaces in downtown Austin and The Domain before deciding on Bee Cave, he said. Commuting against traffic was a factor in the company’s move as well as the variety of amenities available and beauty of the area, he said.

Swofford said that although much of the video game publishing work is done on the West Coast, Cloud Imperium’s presence may bring more studios to the Lake Travis area.

“It’s always good when you have a group of people, competing companies, working—they challenge each other to push the bar,” Peterson said. “It’s also a good talent pool to recruit from or get recruited from.”


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