Hub back in scoring position

Alex Rigopulos and his crew at Harmonix Music Systems Inc. in Cambridge are getting ready to rock the gaming industry again.

The company's Guitar Hero was the surprise hit of 2005; its various versions have sold 4.6 million copies. MTV Networks, part of the Viacom Inc. media conglomerate, paid $175 million last year to acquire Harmonix. And the company's follow-up title, Rock Band, set for release in November, won best of show honors at last month's E3 videogame trade show in Santa Monica.

Three of the year's most anticipated new video games -- Rock Band, BioShock, and Lord of the Rings Online -- are products of Boston-area studios, and for the first time in two decades the world is looking to the Boston area for some of the coolest new computer games.

Companies like Turbine Inc. of Westwood, Blue Fang Games LLC in Waltham, and 2K Boston in Quincy, formerly known as Irrational Games, are making their mark in the $7 billion market for video game software, producing titles that attract critical acclaim and millions of players. GamerMetrics, which tracks discussions of games on blogs and websites, ranks 2K Boston's BioShock -- which goes on sale today -- as the 10th most anticipated game of the year. Turbine's Lord of the Rings was the best-selling game for desktop computers in April, the month of its premiere, and remained among the top 10 sellers in May and June, according to market research firm NPD Group.

While Japan and the West Coast still dominate the industry, David Cole, an analyst at DFC Intelligence Corps in San Diego, said Boston is well-positioned to capitalize as the video game market continues to expand. "It could be primed to be a hotbed for development," he said.

Harmonix, with 140 employees, just moved to larger quarters to accommodate the 50 workers it has hired since April. Many are bright young graduates of Harvard, the Massachusetts Institute of Technology, or other local schools.

While Harmonix is finishing up Rock Band, 2K Boston's parent company, Take-Two Interactive Software Inc., tripled the budget for BioShock, a dark, complex action game, and 2K Boston's workforce grew to 45 from 25.

The surge in the local games industry is giving designers a reason to stay put, rather than head for the industry's traditional center of gravity, California. And a deeper talent pool will attract still more game development business to the Bay State, in a virtuous cycle that could put the area on a par with regional game design hubs like Seattle or Austin, Texas.

"If we didn't have products like BioShock and Guitar Hero coming out of Boston, would we be able to support all these people? Probably not," said Jay Laird, assistant director of game design programs at Northeastern University. "It took some hits coming out of here to make people say, 'Here's a place I can stay and make something out of myself.' "

It should have happened long ago. One of the first video games, Spacewar, was created by a student at the Massachusetts Institute of Technology. In the 1980s, Cambridge-based Infocom, founded by MIT students, was a leader in desktop computer gaming with text-based adventures like Zork.

But as games became more sophisticated, the balance of power in the industry shifted. With its distinguished universities, California could match Massachusetts for technical savvy. But California also had legions of Hollywood-trained artists, writers, actors, and musicians -- skills just as vital to game design as a knack for programming.

Game Developer magazine, in its 2007 national census of the US video game industry, found that of 39,700 US video game software workers, 46 percent live in California. Number-two Washington state, home to Microsoft Corp. and the US operations of Japan's Nintendo, is a distant second with 11.6 percent. Boston has just 4.4 percent of the game design workforce -- about 1,750 people.

The surge of new game development has local companies raiding West Coast talent to make up for local deficiencies. "Most of the existing, veteran talent is on the West Coast," said Rigopulos, "and most people have acclimated to the Los Angeles or Bay Area climate. Getting them back to the Boston area is always an uphill battle."

Local game makers say they could play a better game of catch-up with help from Governor Deval L. Patrick. Many states, including Rhode Island, Wisconsin, Louisiana, Texas, and Georgia, offer tax incentives to entice game developers. Some states did this by expanding their incentive programs for movie- and TV-production companies. Massachusetts recently expanded its movie-production tax incentives, but hasn't extended the program to include game developers.

Most local game companies serve only as developers, toiling at the behest of giant publishers like Microsoft, Take-Two, Electronic Arts Inc., and Activision Inc. The publishers, which finance, market, and distribute games, are the real industry titans, and none of the majors is located here.

This makes it harder for local game builders to raise venture capital. "They develop games for the big publishers, which means they're kind of working for The Man," said Todd Dagres, partner at Spark Capital LLC in Boston.

But Nabeel Hyatt, founder and chief executive of Conduit Labs Inc. in Cambridge, said that local venture firms are starting to loosen up. His own company, which is developing an online game, landed its first round of venture funding last month.

"If we had tried to raise money three years ago, we would not even have gotten a hearing on the East Coast," Hyatt said. One reason for the change -- MTV Networks' purchase of Harmonix last year, which alerted venture firms to the big paydays to be had from a successful game maker.

Hiawatha Bray can be reached at bray@globe.com.