Poland’s new $20 million R&D fund’s goal: breed a game-development juggernaut

Poland is the second-largest game market in Eastern Europe behind its neighbor and traditional rival, Russia. Research firm Newzoo reported the nation was a $408 million market in 2015, a 4.7 percent increase from 2014. It has more than 2,000 people working in game development in an industry that didn’t exist here until the fall of the Iron Curtain in the early 1990s.

And the Polish government has helped shepherd this progress. In 2011, then-Polish prime minister, Donald Tusk, presented President Barack Obama with a video game on his visit to the country, which is the 19th largest game market in the world.

In late April, Poland launched a pilot program for another 18 million euro ($20.46 million) investment fund for game studios. The country’s largest and most successful studio, thanks to the success of The Witcher role-playing series, CD Projekt Red worked with the government to set up this fund. “Any Poland-based company is eligible if only it has an innovative project to pitch, which fits within designated program parameters,” studio R&D manager Stan Just said in an email interview with GamesBeat.

This what a studio needs to qualify, Just said:

• Developers must have a budget of 500,000 Polish zloty ($129,461) to 20 million zloty ($5,178,464).
• A project timeline of up to three years.
• “Consists of industrial research and experimental development or experimental development only.”
• Contractors may only make up 60 percent of eligible costs.
• Work done in Poland.

Just breaks down the program further, explaining it’s neither a game-incubation effort or a package of tax credits, as other nations (and even some states in the U.S.) hand out to game developers. It’s all about making game studios stronger in Poland — and sharing knowledge that comes from investment in R&D.

“This is a program aimed at increasing the competitiveness of the Polish gaming sector through R&D,” Just said. “We want to stimulate innovation in companies that already have experience in pursuing such a path, as well as encourage new companies to start embarking on more innovative projects.

As for the form of this support, it is a non-refundable grant. Its intensity ranges from 40 percent to 80 percent of eligible costs and depends on the size of the company, type of conducted research, and optional bonus, e.g., for spreading the knowledge on conferences and/or science magazines.”

This all came about as part of a process that CD Projekt and several other Polish game studios started in a couple of years ago.

“In 2014, together with several of the biggest and most [renowned] Polish game developing companies like Techland, CI Games, 11 bit studios, CD Projekt formed the ‘Polish Games Treaty,'” Just said. “This initiative was the starting point of our common effort to achieve better economical conditions enabling the local industry to make higher quality games. We wanted to catch up with booming gaming markets in [the U.S.] or Canada, which are offering a wide range of financial support instruments to nurture the sector.”

In 2015, this “treaty” morphed into what Just said was a formal group: the Polish Games Association, which later did a feasibility study and pitched the R&D fund to the government. While it modeled this on the best practices of other funds in other nations, Just said that his group wasn’t modeling it after any particular program. And since European nations support their native game industries in a variety of ways, while this is a big investment this year, it’s not in league with what others do to help studios.

“We definitely know that it’s one of the biggest grant programs in Europe dedicated to games this year,” Just said. “However, we are still far from the support available in France or U.K.”

You could argue that CD Projekt could be setting up the system in which it creates its own competitors. Techland, a company that has worked with the studio, is becoming another strong studio in Poland, announcing last week that it was building on the success of zombie game Dying Light to enter the publishing business. But that’s not the case here.

“We all need to realize that the game development market does not constitute a big portion of Polish GDP. Some estimations talk about 0.5 percent in 2015,” Just said. “But on the other hand, about 95 percent of game production income is coming from abroad. Those are the best games in the world — e.g., The Witcher 3: Wild Hunt gathered the highest amount of Game of the Year awards in the history of video games — and this is a modern, innovative market that has huge potential to grow rapidly in the years to come. I think that those reasons are understood by the Polish government, and that will enable all of us to work together towards making a good use of this potential in Poland.”

It’s not about building competitors. It’s about building the next game industry juggernaut.