Orange County’s video game industry is in overdrive. And this isn’t a moment too soon for the county’s lethargic office market.
Online game developers and console-based video game companies occupy a little less than 500,000 square feet of office space in the county,small for a county that claims nearly 100 million square feet of office space.
But that sector of the tech industry is double the size it was just a few years ago, making it one of the faster growing local industries as of late, commercial real estate brokers say.
Continued expansion is expected, especially as companies are spun off or look to ride on the coattails of Blizzard Entertainment Inc. The Irvine software developer is behind the blockbuster fantasy game series “World of Warcraft.” It is the world’s biggest maker of video games as part of Vivendi SA’s Activision Blizzard Inc.
The sector “could grow pretty rapidly. You could see 20% growth (here) for the next three to five years,” said Phil Cohen, senior vice president for the Irvine office of brokerage Lee & Associates Commercial Real Estate Services Inc.
The video game sector grew 17% annually in the U.S. from 2003 to 2006, according to the latest figures from the Washington, D.C.-based Entertainment Software Association. California is the biggest source of computer and video game jobs in the country, with about 40% of the industry’s 80,000 workers based in the state.
“We’re not saying it’s going to be the next mortgage industry, but (it) is a growth industry,” said Steven Case, senior vice president of leasing for The Irvine Company.
The subprime mortgage industry shed nearly 4 million square feet of office space here during its 2007 implosion.
Blizzard
Blizzard,OC’s largest software company by revenue,is responsible for nearly half of the video game industry’s leased space in the county. Former employees at the secretive company, which combined with Santa Monica’s Activision Inc. in July, head up the smaller, upstart companies here.
Lee & Associates’ Cohen represented Blizzard last year when the company leased 235,000 square feet of space for its headquarters at the Alton Corporate Center in the Irvine Spectrum. Cohen doesn’t think the company is done expanding.
That deal doubled Blizzard’s space from what the company had at University Research Park. The company has more than 1,000 workers in Orange County, according to a spokesperson for the software maker.
Other growing game companies based near Blizzard’s new headquarters include Obsidian Entertainment Inc., which has made a “Star Wars” role-playing game for the personal computer, Xbox and PlayStation and is now said to be working on a game based on the “Alien” movies.
Obsidian signed a 36,000-square-foot lease in May for an Irvine Co. office at 8105 Irvine Center Drive. It is moving its headquarters from Santa Ana to the building.
Also taking up space at 8105 Irvine Center Drive: online developer Red 5 Studios Inc., which is subleasing about 24,000 square feet of space at the 15-story Irvine Spectrum tower. It moved to Irvine from Aliso Viejo.
Red 5 Studios, like Obsidian and Irvine’s K2 Network Inc., a distributor of multiplayer online video games, count former Blizzard employees as key executives or founders.
“It’s a small, close-knit group, they all know each other,” said Cohen, who represented Obsidian in its lease.
Cohen also worked on a roughly 17,000-square-foot Irvine lease for Ready At Dawn Studios LLC, a multiplayer online gaming company that moved its headquarters from Santa Ana late last year. Founded in 2003, two of Ready At Dawn’s three founders came from Blizzard.
Blizzard “spawned a number of growing companies. They’ve stayed here, and want to remain here,” said Case.
For the employers, the county offers a large base of well-trained engineering graduates just coming out of school, as well as more established workers with game experience, Cohen said.
Blizzard’s offices set the standard for amenities, with an on-site gym, cafeteria and volleyball court. Cohen says he gets lots of requests from game enthusiasts to provide tours of the company’s quirky headquarters.
“There’s a little of the Willy Wonka factor there. It’s very secretive,” he said.
Other Areas
The Spectrum isn’t the only hub of game companies in the county.
Closer to John Wayne Airport, Point of View Inc., a developer of games for the PC and console markets, leases about 30,000 square feet of space on McCabe Way.
Earlier this year, the airport area got its newest big name gaming company: NHN Corp., South Korea’s top online video game developer. The company moved its U.S. headquarters from Silicon Valley to Maguire Properties Inc.’s Park Place campus.
Whon Namkoong, NHN’s chief executive, said the area was recommended by a friend, Joshua Hong, K2 Network’s chief executive. Some 45 NHN workers relocated from Mountain View, while another 15 were hired locally.
