The Importance of R&D in Game Development

Milan’s Milestone Studios were established 20 years ago and have become well-known for developing racing games like Superbike World Championship and World Rally Championship. To keep up with the industry, Milestone has had to invest heavily in research and development in technology and expanding IPs. They are now building new IPs and looking to expand internationally.

Although it has been a slow process to grow the company, the risks they took were worth it. They have grown from €2 million to €28 million in five years. Five years ago, Milestone decided they had to change their game engine.They needed to achieve better quality games and their engine was proving to be outdated and have limitations.

Irvin Zonca from Milestone stated, “It was an engine that was getting old in almost every way. We couldn’t create open worlds, the shaders were not great. It was quite old. Not flexible at all. It was okay for 15 years ago, maybe not even for ten years ago, but we talked with them and we said, ‘We have to invest in technology. Technology is the core of a video game.”

Zonca states that the previous manager was not thinking in terms of taking risks and expanding the company. Eventually they asked themselves, “Where are we heading? Do we want to keep up with our competitors or not?”

Milestone’s new commercial manager Luisa Bixio has focused on future growth and has been integral to building the company. Bixio said, “We want to be in business… To do that we have to change and we have to get better.” Their expansion has resulted in hiring more employees to help with vital R&D for solutions like physics and AI.

Ivan Del Duca, Head of the R&D department, said that they did 10 months of creating the technology to integrate and expand Unreal Engine, such as vehicle physics and driver AI. Thanks to their technological improvements and resulting increase in profits, Milestone can begin international expansion.

Companies like this must conduct research and development in order to stay competitive in a world with ever-changing technology. Every time a console is released, it is essential that the developers catch up on the recent developments. “You have to keep learning if you are working as a game developer. So it’s not something that scares us, it’s just a reality. This is why we were happy about changing the game engine, because it was better.”

To encourage innovation and growth, Italian companies who conduct these kinds of activities may be eligible for R&D tax credits. To discuss the eligibility of your project, contact Swanson Reed R&D Tax Advisors for a free assessment.

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