Black Lantern Studios latches onto growing $7 billion national video game industry

By Jennifer Muzinic Springfield Business Journal Contributor 9/11/2006

In the world of video games, change happens quickly – and so can the growth of a business.

Three years ago, the seven individuals who founded Black Lantern Studios Inc. balanced day jobs with weekly meetings in garages, basements and spare bedrooms. In January 2004, those seven became full-time employees of Black Lantern.

Work came quickly.

President Richard Woods estimated first-year sales at $40,000. The company already has passed the million-dollar mark, and Woods says it is on target to reach $1.4 million in sales by the end of the year.

Black Lantern creates video game software, artwork and music for second-party publishers, who usually handle the licensing, production and marketing of the games. Already released titles include “Board Game Classics,” “Candy Land/ Chutes and Ladders/Memory,” “The Game of Life/Payday/Yahtzee” and two editions of “Elf Bowling.”

This year, the company moved from its 4,000 square foot space in the McDaniel building to 222 E. Water St., where 7,000 square feet of office space accommodates the 32 full-time staff members now at Black Lantern.

Woods says the company's primary focus is on licensed properties for handheld consoles, such as the Nintendo DS, Game Boy Advance and Sony PSP.

Platform specialization is not uncommon in the industry, says Douglas Boze, producer for game publisher Kemco USA.

“Certainly, many development studios cannot afford the manpower it takes to develop for all platforms,” says Boze, whose company recently selected Black Lantern to develop a game based on a major comic book.

$7 billion market

Black Lantern's success was no doubt aided by a U.S. computer and video game industry that has ballooned to $7 billion, according to the Entertainment Software Association. Other market factors have also attributed to the company's growth. Today, the average age of the game player is 33 years old – up, Woods estimated, from 22 years old in 1996. The broadening market allows for new types of games and devices, including cell phones and PDAs.

“Now, we have a lot of options that appeal to a lot of different people,” Woods says.

A decade ago, Woods says, the industry and its consumers held a fairly rigid idea of what constituted a game. Now, games such as “Brain Age,” where players “flex their brain muscles” by solving basic math problems and reading classic literature aloud, or “Guitar Hero,” where users “play” along to more than 30 rock songs, have proven there is a market outside the traditional games.

Opportunity also knocks in terms of technological developments; hardware changes for handheld consoles, for example, occur approximately every five years, Woods says. While the technology for handhelds tends to lag behind consoles such as the Xbox or PlayStation 2, the platforms are becoming more advanced with time.

Midwestern advantage

Woods estimated that Black Lantern is one of a handful of independent development studios in the Midwest; the majority of studios are located on the east and west coasts, namely Seattle and Southern California.

Game publisher Boze says Black Lantern's enthusiasm and ideas were among the many reasons Kemco chose the studio to work on a current project, but location also had its advantage.

“Due to the cost of living in Missouri, as compared to say, California, they were slightly more reasonable than some other companies we were looking into,” Boze says.

Not only are the costs of business comparatively lower, but staff recruitment also benefits.

“There are not a lot of opportunities in the area for people interested in gaming. We find great, talented people here,” Woods says.

The company also has several programs in place to help retain employees. Vice President of Business Development Derek McDaniel says the average industry retention rate is five years.

The sheer number of new technologies and products can be overwhelming, Woods says. And deadline crunch times can demand much more than a 40-hour workweek.

To offset crunch-time hours, a mandatory two-week vacation each year is Black Lantern policy, McDaniel says; employees also have another two weeks of vacation time annually.

Additional benefits, including company outings and a policy that rewards creative ideas with a portion of the company's royalties, help to promote teamwork, Woods says.

Fun Facts

• Hasbro compilations are among Black Lantern's top-selling games.

• At least six game titles are scheduled for release in the fall and winter.

• Black Lantern's development time averages between four and nine months. “Some games can be years in the making,” says Black Lantern President Richard Woods.

• Black Lantern has been privately funded and employee owned since incorporating.

Black Lantern Team

All seven founders remain with the company:

• Devin Clasby

• Justin Mayfield

• Derek McDaniel

• Chris Moore