Ben Kvalo had a good run in the game industry, most recently in a role where he helped Netflix expand into the game business. His way of giving back and carving out a new path is starting Midwest Games.
After nearly five years at Netflix, Kvalo left California and started his company in Madison, Wisconsin, which has a growing community of game developers. He got it going at the end of 2022 as he was watching the indie space that he came to know well while working at Netflix.
Kvalo is trying to create a groundswell of growth in the region with support for MDEV, a Midwestern version of San Francisco’s Game Developers Conference. And he’s raising a new round of funding soon.
And since the fledgling industry needs a boost, Midwest Games is also working with the Entertainment Software Industry, the naitonal game industry trade association, to get a 30% video game development tax incentive in the state of Wisconsin.
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Midwest Games is part of a new hub has emerged in Madison with Raven, Respawn, PUBG, Zenimax Online, Lost Boys Interactive, and PerBlue all within a 15 mile radius of one another, mainly focused around live services titles.
“I just saw there was just a lot of challenges with what indie games were trying to do to bring their games to market. I got to know a lot of them so much better than I had previously, having worked more previously in triple-A and a lot of the larger game scene. And so I saw that happening in the Midwest specifically, which is where I’m from originally, and how there just been a gap that has been formed ever since Midway went out of business 15 years ago,” Kvalo said. “But I knew that there was a lot of strong talent. There’s so many people that I have worked with in my career at the many stops I’ve been at that are from the Midwest. And then they have had to move. They didn’t have a choice. They had to leave where they’re from. There were no opportunities in that market. But it has changed post-Covid.”
He added, “I was seeing how Madison was becoming a hub with Raven Software working on Call of Duty. EA is building a Respawn studio. Suddenly there’s this live services hub in Madison, Wisconsin, and so many of these developers go into these bigger hubs and bigger shops and then eventually want to spin out, there’s not somebody they can go to. There’s not a great investment scene in the region, especially not savvy to video games.”
An overlooked region
For Kvalo, this meant a lot of people and startups were being overlooked.
“I saw those dynamics happening, and I just saw an opportunity in that moment to say, ‘Okay, what if we start something in Wisconsin?,” he said. “What if we come back? We put our flag in the ground and say it can be done here, and we want to support folks that are here and in other underserved regions throughout the world, where it’s a very similar story, there’s strong talent pipeline, but there’s not a lot of opportunities.”
Earlier, Kvalo focused on publishing and worked at 2K in its early days and he helped build out its central technology group to service all the games. He also worked on esports at Blizzard.
The company has 10 people now. About 60% are in Wisconsin. Overall, there are perhaps 800 game jobs in the state.
Regarding the tax breaks the ESA is working on, “We’re hopeful that at the end of this year we can get it really pushed forward,” Kvalo said. “The education system has a really strong STEM program and the talent output is quite strong in fields” related to games. Kvalo is worried that the slowdown in venture capital investments in games will also slow down the growth of games in the region.
“Part of my goal is to get more investment in the state,” he said. “There isn’t as much funding happening, so some of the game developers can’t be full time, even though they are doing really impressive things. If we get more investment to happen, and we get more full time game developers in this region and that allows for just further growth. All it takes is one company’s hit to blow up into something much larger. If you compare the Nordic regions, it really transformed from mobile game hits into a huge game development hub. Even Netflix acquired a studio in Helsinki.”
He noted that the Midwest also doesn’t suffer from the high cost problems that many of the regions in the U.S. have when it comes to the expenses of game development.
“The money goes further here. And we’re fortunate that a lot of universities are actively doing game development education and actually have really strong game developer programs,” he said. “They have just been shipping their talent to the West Coast consistently. And so we actually have some some established programs. And there’s a number of schools that actually have really strong game development programs. But again, if the talent wants to go into games, they’ve been forced to move. We’ve consistently lost that talent, and they go do amazing things just elsewhere.”
Looking for talent in new places
As for Midwest Games, Kvalo is looking to balance the portfolio across categories and genres while taking advantage of the specific game talent in the Midwest.
“We’re balancing our portfolio across a number of different genres, and we are trying to give our give audiences a taste of great games that come from other places that aren’t always invested in,” he said. “We try to showcase where they are from Graphite Lab is from St. Louis. One thing I’ve always been inspired by is that Dungeons & Dragons was invented in Wisconsin, and that’s such a huge brand now. And Midway in Chicago was in our backyard. That can inspire the next generation.”
He noted there are incubators, some associated with universities, that are starting to take off as well as tech week celebrations happening in various Midwestern states.
Along the way, Kvalo picked up talent like Alyssa Walles, COO, a 20-year veteran who had experience at Disney Gift Catalog, Sony PlayStation and Backyard Sports. Larry “Major Nelson” Hryb served as an adviser for Midwest Games. (Disclosure: Gina Joseph, the chief strategy officer at VentureBeat, is a member of Midwest Games’ board).
“They can advise us on our business to make sure that we’re thinking about things in the right ways with somebody from an outside perspective,” Kvalo said.
Kvalo noted that about 40% of the team comes from diverse backgrounds and it is a priority to support underserved developers in underserved places. He learned a lot about approaches to diversity while at Netflix, which found that South Korean film content was ready for an explosion in entertainment. And the consequence of this view on diversity is being able to ready to tackle difficult topics.
“We have to be more representative of the world around us, and we need to do that by actually having people around us that represent the world. And so it’s a big piece of how we approach our hiring process,” Kvalo said. “We want to create strong entertainment for many people, and the only way you do that is by actually having people that have those different perspectives.”
As for the layoffs in the game industry over the last couple of years, Kvalo said it’s been a strange time to be building something as while others are scaling back.
“We’re building while so many other things are happening in the environment,” he said. “The industry hasn’t been building with much of a sustainable mindset. The layoffs are just a gut punch after gut punch.”
It makes him ask, “How are we going to do things differently moving forward, and how are we going to not get ourselves in this situation again by acting more sustainably and maturing as an industry?”
While many smaller companies in games are supporting external development, Midwest Games isn’t going there yet. Mainly because the company doesn’t have skills in that area, where developers make games or components of games for other developers on a work-for-hire basis. Rather, Midwest Games focuses on services for game devs like marketing, localization, quality assurance and more.
Midwest Games released one game in April on the PC and more will come next year. This fall, another game called Dark Sky is coming. All told, the company has signed up 10 games with nine developers.
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