Eugene still fostering video game startups.

Byline: Sherri Buri McDonald The Register-Guard

The future for computer game development in Eugene looked bleak when Dynamix began laying off workers and eventually shut its Eugene studio in 2001.

But several startups formed by Dynamix alumni have proven that the game is not over in Eugene.

Eugene suffers from some of the traditional obstacles to new business development, such as the lack of venture capital, said Kelly Asay, president of 4-year-old Tesseraction Games Inc., which develops games for the PC computer market. "But I think Eugene is being known as a place for game development post-Dynamix," he said.

Video games are a $10 billion-a-year industry in the United States, according to The NPD Group, a market research group in Port Washington, N.Y.

In addition to Pipeworks Software Inc., which was acquired in April by independent games developer Foundation 9 Entertainment Inc., these three gaming companies started by former Dynamix employees call Eugene home:

Buzz Monkey Software 

Founded in 2001 by four senior Dynamix employees, Buzz Monkey Software now employs about 30 people in downtown Eugene. The company approximately doubled the number of employees in the past year, said Barry Drew, a co-owner and art director of the company.

Buzz Monkey produces licensed action and arcade titles for companies such as Disney, Paramount and Nike for a range of game platforms, including Nintendo's GameCube, the Sony PS2 and Microsoft's Xbox.

Buzz Monkey has a bright future, Drew said.

"Interactive entertainment is just getting bigger and bigger each year," he said. "It's getting to the point where it's rivaling the movie industry, so we see it as a good sign for us."

GarageGames.com

Started by Dynamix founder Jeff Tunnell, GarageGames.com is an Internet publishing label for independent games and gamemakers.

The Eugene-based company has about 18 employees and licenses technology tools, such as its Torque game engine, to independent developers, hobbyists and university students learning about programming. GarageGames licenses the Torque engine for $100. Under the terms of the licensing agreement, if an independent studio using the Torque engine creates a game that earns $250,000 or more, then the developer must buy an upgrade for $395, said company spokesman Benjamin Bradley.

"So all they have to pay is a total $495, even if they have a monster hit on their hands," he said.

Tesseraction Games Inc.

Founded by eight co-workers just a few months after Dynamix folded, Tesseraction develops games for PCs.

"We picked a market that's underserved and difficult to translate to consoles, such as (Microsoft's) Xbox and the Sony PlayStation," said Asay, Tesseraction president.

The eight-employee company plans to release in September the second chapter of "Enigma: Rising Tide," a naval combat game.

The first Enigma product, released in April 2003, sold 250,000 units - a money maker in the PC game market, Asay said.

Eugene-based Tesseraction expects its second Enigma product, which will be self-published, to have as much, or more, appeal as the first one, Asay said.

The firm also plans to announce another project - a World War I naval combat simulation game, Asay said.

Tesseraction has had its hands full with legal problems, however.

Two years ago it filed a lawsuit in U.S. District Court in Eugene alleging nonpayment against GMX Media Software Limited, a London-based software publisher.

In court documents, GMX denies the allegations. Tesseraction is asking for $1.66 million in damages.

"We've had pretty bad luck with publishers," Asay said.

Nonpayment can be a problem when developers do deals with middle-tier publishers in Canada and Europe, he said.

"If they run into financial trouble, the developer is the first one to feel it," Asay said.

Tesseraction has stayed alive through fund-raising and additional investment by its owners, he said.

- Sherri Buri McDonald

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Eugene still fostering video game startups