“As for visas, if you are a worker outside Europe we try to avoid” recruiting, says Funcom CEO

Rui Casais is Portuguese and, from Oslo, Norway, he leads Funcom, an international studio behind video game titles such as “Age of Conan”, “The Secret World”, “Conan Exiles” or “Dune: Awakening”, a worldwide launch that had a “strong contribution” from the Lisbon studio.

In Portugal – where Funcom has been present since the 2019 purchase of ZPX –, the studio has a team of 126 people, of which 81 reside in the country and the rest are spread across 15 countries . They are part of a team of more than 500 people, spread across five studios located in markets such as the United States.

Despite the good reputation that the national gaming industry is beginning to have, recruiting international talent is a real game with several levels of difficulty . Starting with the cost of living — “as the cost of living and housing, both in Porto and Lisbon, is high, it is not easy to attract experienced foreign staff to come” —, through to the high tax burden , which takes salaries out of workers’ pockets, and the slowness in granting visas .

How to boost the gaming industry in the country, entrepreneurship and the impact of artificial intelligence (AI) on the sector are other topics covered in an interview with the CEO of Funcom.

You launched “Dune: Awakening” with strong input from Funcom’s Lisbon studio. Is the gaming industry in Portugal also ‘waking up’?

I would say yes. In recent years, maybe five years ago, there has been a clear difference in the Portuguese industry. Many more studios have come and Portugal is more on the radar of everything that is information technology, including video games .

It is still a small industry, but I am confident that it will grow, because there are many developers who work not only in Portugal, but also abroad. There are many people who, like me, left and worked abroad and then wanted to come back. There is no doubt that the industry is growing and has a good reputation.

They are present in markets such as the USA. What can Portugal do to attract more studios and accelerate the growth of the industry?

There are certain countries that have programs to support the video game industry that work very well, others where they don't work so well and there are still other countries that have no support at all.

I lived in Canada a few years ago and they have a very good support program. Norway, where I am now, has a program. Sweden doesn't have any support program, but it has a very strong association of studios there. There are several models.

Portugal had a low cost for a Western country. This cost has been increasing.

Salaries are not high, but they are not low. They are average, medium-high. However, the corporate income tax burden is almost as high as in France, higher than in Scandinavian countries such as Norway, for example, and this means that the company's total cost of living per employee is high. And since the cost of living and housing in both Porto and Lisbon is high, it is not easy to attract experienced foreign staff to come here.

Are you referring to salary costs?

Salaries and cost of living, which have consequences on the general level. There is a high tax burden, which is one of the things that complicates things. Salaries are not high, but they are not low. They are average, medium-high.

But the corporate income tax burden is almost as high as in France, higher than in Scandinavian countries such as Norway, for example, and this means that the company's total cost of ownership of its employees is high. And since the cost of living and housing in both Porto and Lisbon is high, it is not easy to attract experienced foreign staff to come here.

Our strategy was to open in Lisbon, to buy ZPX, they don't have people with 20 years of experience, we have to attract people from outside who come to teach and train people here . And that has become more difficult. But in terms of support, I think there are two aspects. There is one aspect in which Portugal did it, then stopped and then came back, which is a tax benefit for those who come from outside.

Refers to the now IFICID+.

We even lost some people when it was cancelled, considering they could earn more in Spain or the UK doing the same job.

I really like the Canadian model, especially in the Quebec region, where they provide support in the form of tax credits, in which, in practice, for certain industries, part of the worker's costs are returned to the company at the end of the year. And it's automatic, in a simple process, all video game companies have this, so much so that Quebec today has a very large video game industry that was created from nothing, partly because of this benefit.

There are more examples, but this is the example that I think is good and have direct experience with.

I said a little while ago that your strategy was to attract more senior international talent, but then…

At first it worked well, because we didn't have the real estate crisis that we are having, and there were tax benefits for those who came from abroad. Lately it has been more complicated, we have to pay more to attract people. Because compared to Spain, with the same salary, in practice the person ends up with more money.

In other European cities, we have people in France, in smaller cities, which is much cheaper than being in Lisbon. In Germany too, except for Berlin, the rest of the cities are cheaper than Lisbon.

Have you been feeling the problem of visa delays? Or has the biggest impact on attracting international talent been the fact that, considering the costs, more salary is left in your wallet working in other countries?

I would say that the biggest impact is what remains in the wallet. As for visas, in practice, if the worker is from outside Europe, we try to avoid them. Whenever we have someone who comes from outside the European Union, it takes a long time and we don't get a response.

When the war in Ukraine began, we had someone who was Russian, fled Russia and wanted to come to Portugal, and ended up having to go to the Border Services [now AIMA] in Vila Nova de Gaia just to be able to speak to someone.

It took a long time, but it took a long time, and it causes a lot of stress for people who don't know if they'll be able to stay in the country. In practice, we avoid it, we focus more on the European Union.

As for visas, in practice, if the worker is from outside Europe, we try to avoid them. Whenever we have someone who comes from outside the European Union, it takes a long time and we don't get a response.

Because of visa delays, they avoid recruiting outside the European Union, is that it?

Exactly, exactly.

Do you also feel this bureaucracy in other markets?

It varies a lot. And it also varies because not every year is the same. There are years when there is more pressure on the immigration service in one country than in another. It is always bureaucratic in all the countries we are in…

There are countries that are more transparent with bureaucracy and others that are less so. I would say that Portugal is not very transparent in this regard. Of the countries where we operate, Portugal is the most difficult.

Given these difficulties, what are the plans for the studio? Will it expand its current structure? And what is the strategy for doing so?

We are not planning to grow any more right now, but we are more confident that we have the people who can train the next generation. We need to continue to have more internships and continue to have younger people.

In the national ecosystem, they maintain some connection to the Unicorn Factory Gaming Hub. Do you believe that this type of cluster strategy works?

The cluster strategy works when companies are very small, with 5-10 people, that are innovating and when one company doesn't work, people from that company can move on to others. After a certain size, it doesn't work as well, because the companies are bigger, the projects are bigger, they are more focused on their own production, and there is more job security within the company itself.

What I see in Europe, compared to the United States, and in Portugal, even compared to other European countries, is that in the US there is a culture of 'go big or go home' , of 'high risk, high reward' . In Portugal it is more, 'ah, I'm going to do a business. What are you going to do? I'm going to open a restaurant'. That is not a big risk, not a big return. And there is a culture that if the business fails, it looks bad, it is not good.

There is a European strategy to attract and retain startups and scaleups. What is missing from this strategy for an industry like gaming to also be more robust?

I don't know the details of this strategy, but what I see in Europe, compared to the United States, and in Portugal, even compared to other European countries, is that in the US there is a culture of risk-taking , 'go big or go home', of 'high risk, high reward'.

In Portugal it's more like, 'Oh, I'm going to do a business. What are you going to do? I'm going to open a restaurant.' That's not a big risk, it's not a big return. And there's a culture that if the business fails, it's bad. It's not good.

From the point of view of what can be done, I think it is to encourage, especially recent graduates, who are used to not having a salary, not having very high expenses, to incubate. To have loans without collateral, low rents, services, small amounts, just to help a group of four or five people set up a company. Maybe they receive 20,000 euros for equipment, rent for six months and they will try to do something. Maybe it will go ahead or not, and it doesn't matter if it doesn't work.

Any system to encourage entrepreneurship has to encourage people to take risks, to learn from failure, when things don't work out. There has to be an organization that supports startups, entrepreneurs, where they spread the word at conferences, lectures: 'this company didn't work, we learned this, this worked really well, I want to use it for the next opportunity'.

Artificial intelligence is impacting all sectors. Some technology companies are reducing the hiring of engineers because of this. Are you already feeling this impact in gaming?

Our industry is always pushing the boundaries of what is possible from a technological standpoint. Many of the advances in computing are thanks to the gaming industry putting more effort into improving games and having more computing power.

At the moment, making a high-quality game is becoming increasingly expensive. What AI will do in practice is improve the tools we have, so that we don't need to grow our teams even more. In other words, from my point of view, AI helps keep costs from increasing.

Because every person who has to work with tools for art, design, training, whatever, will be more efficient. So instead of having to hire one more person for a project, we can keep the people we have doing higher quality work.

When digital drawing tools came along, many of the artists who worked by hand left the industry. The ones who stayed were the ones who adapted to the new tools and already had the knowledge of the new tools. From my point of view, the same thing is happening with AI. There will be people who will lose their jobs, yes. Who won't lose their jobs? Those who adopt the new technologies.

Don't you think there is a risk of substitution? The case of Ghibli studios made it clear that there are AI tools with great capacity to recreate visual environments.

Twenty or thirty years ago, people who designed video games drew by hand because Photoshop didn't exist yet, there weren't any digital drawing tools. When digital drawing tools came along, many of the artists who worked by hand left the industry.

Those who stayed were those who adapted to the new tools and already had knowledge of the new tools. From my point of view, what happens with AI is the same. There will be people who will lose their jobs, yes. Who won't lose their jobs? Those who adopt the new technologies.

In terms of the number of employees, I think most teams won't change. The composition of the team is likely to change. Because maybe we need fewer people, or at a certain stage of a project we don't need as many artists, because we can have AI bring in images and change them more quickly. But then we need to take those images and make a game.

Even in simpler things, like just text, there are still no books, novels, high-quality prose written by AI. Something is missing.

In other words, in a simpler scenario, they're not there yet. So in a more complicated scenario, a game, something interactive, will still take many decades. I think we're reaching a plateau, a limit where improvements on the AI ​​side will start to slow down.

But do you feel that any 'ChatGPT' could allow people with a few prompts to create a “Dune: Awakening” or are we far from that scenario?

I think we're a long way off. What we see is that even in simpler things, like just text, there are still no books, novels, high-quality prose written by AI. Something is missing.

In other words, in a simpler scenario, they're not there yet. So in a more complicated scenario, a game, something interactive, will still take many decades. I think we're reaching a plateau , a limit where improvements on the AI ​​side will start to slow down.

What we're definitely going to see is certain types of games that incorporate this. Maybe we're going to have games that are an adventure where the character you're talking to has an AI that adapts to what you're saying.

Instead of pressing a button for dialogue options, we are playing, we speak directly to the computer and, on the other side, an AI character can understand what we are saying, our accent, our language, directly translates the language we are using, and has broad game parameters to respond in a more customized way to us. This will happen.

I see you very confidently saying that. Are you already doing that?

No, we're not doing it, but I know of technologies that are doing it. But it will still take decades to replace the entire creative process.