Puheeni Finnish Game Developer’s Association 30 v. illallisella 25.5.
The Finnish video game industry has a long history . In the autumn of 1979, Finnish company TopData published a Chess game to be run on an old Telmac 1800-computer. That game did not even have a screen. Fast-forward 43 years, to this day in 2022. Finnish game industry has evolved to a mature industry with a turnover of over 2.5 billion euros. This is an amazing number for an industry employing 4000 people – 625 000 euros per person. The pioneers of the industry, such as Housemarque, are approaching their 30th birthday.
The rise of the game industry has occurred at the same time with the broader changes of society and technology. Imagine trying to stream modern games with the connections of 2005? I was trained as an engineer in Vaasa, in 1990s. Those were the times of NMT-phones. Great phones, but they had very little opportunities for game development.
The games of this century are masterpieces of creativity and excellence, with graphical and visual features that we have usually seen in Hollywood movie productions. This has created new professions, new industries, a completely new ecosystem. The game designers are the engineers of the 21st century – like the graphic artists and the programmers are the painters and carpenters of today.
Game industry is indeed maybe one of the most visible features of the big change bubbling under the surface – the shift towards digitalized economies and societies. Much of my current work in the European Parliament is related to working to understand and shape this digital transformation towards socially beneficial and sustainable goals.
Digital transformation has a huge potential to take us towards the goals we find valuable, such as more sustainable, socially responsible and flourishing society. By we, I mean democratic societies. Capability to optimise resources, to understand better the world around us and automate the heavy, mindless and draining work is a way to take our societies to the next level.
Europe in general, and Finland in particular is very well positioned to take advantage of this transformation. Europe in general has a lot of expertise, educated workforce and industrial capacity to deliver this digital future – and also capital is starting to find its way. I am proud to say that in the peak of these capabilities is Finland. For many years, we have had the leading positions in the DESI-index, that measures the level of digitalization of European countries. We can be proud of our Nordic pioneering spirit in technologies, that has taken us this far. .
The challenges of the digital economy
However, with the digital transformation we are faced with new political problems. In a way these are traditional concerns. Who gets what, and how? What kind of direction we want to take this digital development? In the past years, the digital society has brought new forms of power and dependency. These have shown us that without action, the digital economy ends up growing crooked.
Let me give you examples. In the market-place, the digital economy has brought with it powerful gatekeepers. These gatekeepers control the access to markets, such as operating systems or application stores. This has created so-called private marketplaces, so-called “walled gardens” , that the gatekeeping companies are able to control. This gatekeeping position, the access to customers, is then used to charge 30% of the revenue from those, who want to deliver value to customers in those marketplaces. This is take-it-or-leave-it situation but in front of law it is a private contract. In the Data Act, we will face this. Efforts to try to contest this gatekeeping have been punished. Gaming industry has faced these questions as well. The public remembers the story of Fortnite from a year ago as a good example of the power by the biggest players.
The second element is the infrastructure. We tend to talk about “digitalisation” as an abstract thing. Something that happens “in the cloud”. Most customers do not know, nor they want to know, how exactly data moves around the world. The components and chips inside a smart-phone or in a console are often mystery to their users. I think this has now changed. We are starting to realize that digital world has very concrete roots. European digital economy depends on a cloud market, 70 % of which is owned by just 4 American companies. With the COVID-pandemic and the supply chain disruptions, we realize how dependent we are on chips manufactured abroad. This has impacted the game industry as well. The delays in Play Station 5 delivery to customers due to lack of chips has created aftershocks in the whole game development value chain. Infrastructure also defines the borders of the digital community. According to UN, 2.7 billion do not have digital connectivity. Here politics has the role as well. In Finland, we have good examples of how to get mobile data prices low.
The third point is the role of data. The capability to put information in the form that computer can understand has been the lifeblood of many key digital developments. Some speak of the data as the “new oil” of the digital age. This metaphor is not always the most useful, but it helps to focus on the central role data plays in the modern economy. It also helps us to see important the access and control of this resource is in the digital economy. Unfortunately, this resource has been hoarded by few biggest players. This has created situation, where the tools to compete and innovate are taken away from others, who could deliver value to customers.
So, while the digital economy has a great potential, at the same time it has brought us new monopolies; it has made us dependent on an infrastructure we don’t control and it has created a system where the necessary digital resource, data, is pooled in the hands of only few players. These are not only bad for our society. These also prevent us from claiming the full promise of digital technologies. These are obstacles that stand in the way of the future. These are obstacles that we must remove.
One of the reasons our societies have not delivered, is that answers to these kinds of question cross borders. For one country, for one nation, making rules for the digital age is very difficult, because legislation often tends to happen in one country. This is where we need broader shoulders. This is, I think, where we need Europe, its single market and its power to legislate.
Delivering for the Europeans – the solutions
Europe is the largest trading bloc in the world, home of 450 million people, and the most united international community history has ever seen. Europe has the power to create rules that shape the world. Together, we don’t have to bow to anyone. Together we can set a direction.
European Union has noted the question of digital economy. When the President of the European Union, Ursula von der Leyen took office three years ago, she said that in the digital age, “we must continue on our European path”. That path is one, where technology works for our values, not against them. Where human is in the centre, not in the sidelines. Where the economy is fair, competitive and socially sustainable – it is a market, not a monopoly, a place where values are set democratically.
Three years after, we see that these were not just words. Europe has delivered.
First, on the markets. Two months ago, 24th of March, we got a deal on the Digital Markets Act. It is hard to understate the importance of this law. For the first time, globally, the gatekeeping role of platforms is challenged. No more can they use their size and power to skew the markets to their benefit. The walls created by lack of interoperability are taken own. This has clear impact to your work as well. Same games can be sold on multiple platforms. The data generated by the players of the game are no more the hostage of the platform, but must be shared with the game developers. These are just few examples in this huge effort in making the digital markets more fair and competitive. My guess is that the next step will be ethical questions inside the industry. Europe has recently addressed dark patterns and targeted ads. In the future, one direction is how to make sure gaming benefits the children players as well.
On the infrastructure, Europe is now working on the Chips Act. Chips Act ensures that we don’t find ourselves in a similar loss of key components for the digital economy. The work on this file is just starting in the Union, but the key objective is to create technological capabilities inside the Europe as well. This does not mean, that we want to rewind the clock and try to become autonomous. It only means, that we take control of the key technologies that shape our future, so we are not ships, not shipwrecks in the digital future. More resilient digital infrastructure creates long-term certainty for game developers.
Lastly, on the data. Data is my great passion. I was leading the work of the European Parliament in charting our stance towards data economy, with the Data Strategy, accepted a year ago. After that, I started working on the Data Governance Act that laid the foundations for the European data economy. Now, I am starting work on the Data Act.
This is the last piece of the puzzle in the story of European data economy. It aims at creating truly flourishing data economy, where data will actually be exchanged on the markets. The manufacturers of products do not have the
In a way, it could be said that the Data Act connects many strands from the European digital agenda. First and foremost, it creates a rules and obligations for data sharing. No more can big players keep their leading position only because they have a monopoly over the data generated by the use of products, the key building block of the digital economy. This data must now be shared with others, so all players have a fair chance. There is a balance to be made between protecting the intellectual property of companies and the collective benefit of flourishing data economy. This balance is not simple, but it is possible.
The Data Act also addresses one of the key features of the infrastructure that I mentioned earlier – the cloud dominance.. One of the most important decision a digital company makes is the choice of the provider of cloud computing provider. The computing capacity is the necessary condition for many of the possibilites of digital age, such as streaming solutions for game industry. However, the current cloud providers have constructed legal, technical and economic obstacles that try to prevent switching of the provider. In the Data Act, we work to open these locks and open a space for truly competitive cloud markets.
What regulation cannot do
Regulating is what European Union does best. However, we should not think that this is the only thing that matters. Making rules can only do so much. It can remove obstacles. It can create guardrails. However, it cannot create the movement of technological innovation.
This is why rules must be complemented with focus on drivers of innovation. One of the most important driver is talent. We have no use of the new technologies if we don’t know how to use them. Ground-breaking graphical capabilities do not produce beautiful games themselves. Behind an artwork, there is always an artist. Behind a game, there is always a designer.
This is why it is important that we keep our doors open to global talent. Last September, European Parliament voted to revise the so-called “Blue Card” directive that makes it easier for talent outside EU to work and reside in the EU. In addition to foreign talent, we must also strive to develop the European talent. While this is mainly the job of the member states, in the European level we can share knowledge and best practices to address the shortage of key skills.
We can also support the development of programs and initiatives that seek to educate the Europeans. One example is the EU Code Week, supported by the European Commission, that organized over 78,000 activities across the Europe in 2021. These activities were directed at making coding a language among others. However, the main work happens in the member states. Here Finland is delivering well.
The pace of digitalization is not slowing down. We can’t say precisely what are the next technologies are. But we know the change is going to be huge. This is true for games as well. Now we can create realistic light and movie-like visuals for a game designed on a laptop. Tomorrow, we might be talking about holographs and virtual reality as a normal thing in the gaming industry. With these new opportunities, new challenges will emerge. I will be working to address them.