By Jens Hansegard and Sven Grundberg
MALMÖ, Sweden--The Nordic tech scene has been at the heart of recently booming demand for mobile games, with titles such as King Digital's Candy Crush Saga, Rovio's Angry Birds and Supercell's Hay Day all born in the region.
Their success has opened the floodgates to venture funding and created businesses valued in the billions.
Now, Nordic developers hope to make inroads into the console games market they previously dominated, where the initial success of Microsoft Xbox One and Sony PlayStation 4 suggests demand is picking up there too.
Mojang AB, the maker of the popular Minecraft franchise, will launch a more polished version of the game for the new consoles in coming months.
Other Nordic firms, ranging from EA-owned DICE to Massive and Avalanche, all in Sweden, are preparing more titles to meet growing demand from publishers and players.
This marks something of a comeback for console games. The growing popularity of games played on mobile devices--which are often free to download and can be played in short spurts--has taken much of the shine off the console games industry, whose games are often distributed on discs priced at around $60 and demand greater attention from gamers.
In February spending on videogame hardware in the U.S. increased 42% from the same period in 2013, spurred by brisk sales of the PlayStation 4 and Xbox One, according to NPD Group. Executives at gaming firms, including Massive Entertainment, a division of Ubisoft Entertainment SA based on Sweden's southwestern coast, say the trend is likely to lift investment.
"When I saw the [console] data, I knew there were a lot of green lights in secret meetings," Massive's Chief Executive David Polfeldt told The Wall Street Journal. "The next couple of years will be a very nice time for gamers."
Massive is betting hundreds of millions on Mr. Polfeldt's prediction being right. Set to launch Tom Clancy's The Division later this year, the company is looking to hire 30 additional employees, beefing up a staff of about 250 to handle the demand for a blockbuster.
Console games often cost hundreds of millions to develop. The Division is heavily engineered, relying on years of research and huge technology to create an alternative New York that is devastated by a pandemic.
Massive didn't disclose the costs but said it is one of the most expensive entertainment products to be made in Sweden. The goal is to get friends teaming up to spend hours together playing the game online.
Hitting it big is essential in console gaming. Given the high production costs, it has become more difficult to make money, said Fredrik Rundqvist, The Division's executive producer.
"The games at the very top sell more than ever before," he said. "But you have this huge segment of games beneath the top chart that doesn't make money at all." He compared the computer games industry with the movie industry, with fewer but bigger blockbuster hits and a shrinking mid-list.
Starbreeze, an independent game studio in Stockholm, is among the smaller console game developers waiting on the sidelines for sales of the new generation consoles to pick up further. The developer's CEO Bo Andersson Klint said it is still early days.
"Sure, sales of the new consoles are strong, but we're not spraying Champagne on each other just yet," Mr. Klint said.
He said his company will wait until the installed base of new consoles reaches at least 20 million from today's 10 million, to make it worthwhile. "We don't have the marketing muscle that the big publishers have," he said, adding that it won't publish any next generation console games for at least a year.
But for the bigger game developers with larger cash piles, rising console sales are welcome news.
"Low console sales would have presented us with lots of tough questions about The Division," Mr. Polfeldt said. Instead, he suggests executives at mega-publishers such as Ubisoft, Activision, EA and Bethesda are now saying "OK, let's go."