Video game makers like what they see in Boston

"I think it couldn't be better," said Chris Parsons, product manager at Muzzy Lane Software Inc., a Newburyport company best known for its educational games. "Independent game development is really hitting its stride right now."

Parsons was among several dozen game creators gathered at Northeastern University this week for the Independent Game Conference East. The event has been held in Austin, Texas, for the past three years, with a fourth planned this summer in Los Angeles. But Steve Farrar, director of conference organizer Game Path Events LLC, said his company launched an East Coast event this year because of Boston's growing importance to the video game industry.

"Boston is a focus," said Farrar. "There's a real cluster of video game developing studios and digital media companies. Plus, the state of Massachusetts is actually engaged in a number of initiatives to market Massachusetts and Boston as a place where game companies should set up."

Earlier this year, Governor Deval Patrick met with executives at Microsoft Corp. and Electronic Arts Inc., both giants in the gaming industry, during a tour of the West Coast. Patrick was seeking to bring more of their development dollars to Massachusetts.

In another sign of the industry's growing clout, the Massachusetts Institute of Technology's MIT Sloan School of Management will today hold its first conference devoted to the video game business. Guests at the conference will include former Red Sox pitcher Curt Schilling, founder of 38 Studios LLC, a Maynard company that's developing an online adventure game.

A handful of Boston-area firms have created popular, high-profile games. Turbine Inc. of Westwood makes Lord of the Rings Online, a massive multiplayer role-playing game based on the popular novels by J.R.R. Tolkien. 2K Boston, owned by Take Two Interactive Software Inc. in New York, built the acclaimed action game BioShock. And Harmonix Music Systems Inc. of Cambridge created two music games, Guitar Hero and Rock Band, that are among the world's best-selling titles.

But most local companies have a much lower profile. They tend to be small operations that develop games under contract to larger publishing companies. Creat Studios, founded in St. Petersburg, Russia, moved its headquarters to Canton in 2005, and develops games for Sony Corp.'s PlayStation and Nintendo Co.'s DS gaming consoles.

Chief executive Vladimir Starzhevsky said the early going was tough. "Running out of money is a very typical thing for a small, independent developer," he said. Creat has yet to earn any royalties for its games, surviving instead on publishers' advances.

Yet Starzhevsky said things are looking good these days, thanks to strong sales of Cuboid, Magic Ball, and Mahjong Tales, all released this year. "The sales were much higher than we anticipated," he said. "We already break even on all those three games."

Starzhevsky and others at the conference said that independent developers are beginning to benefit as more games are purchased over the Internet, rather than at retail stores. This means that developers can publish their own work online and capture most of the profits, instead of having to do costly deals with publishers to get games in stores.

Jeffrey Anderson used to be chief executive of Turbine, whose role-playing games run over the Internet. He has since founded Quick Hit Inc., a Foxborough company that's developing an easy-to-play, free, online football game. Anderson managed to raise $8 million in venture funding last fall as the global banking crisis broke, but it wasn't easy. "It was a terrible market," he said.

In addition, Anderson is finding it more difficult to attract in-game advertisers who will generate revenue for his company. Banks and car companies, traditionally among the biggest advertisers for sports products, are cutting their ad expenditures.

But Anderson said that other consumer products companies will pick up the slack. "The Gillettes of the world still have money," he said. And he expects "a huge windfall" of advertising dollars when the economy recovers.

Galactic Village Games Inc. of Chelmsford has very little cash to work with, but founder Brad Myers said he and his colleagues have invested about $100,000 of their own money in their upcoming online game. It's a multiplayer adventure that's designed to be easier to play than rival products like the popular World of Warcraft.

Myers said that while venture firms in New York and California are willing to invest in gaming companies, Massachusetts firms are far more reluctant. "Here, the capital groups are not as educated or up to speed on what's going on in the gaming industry," he said. In addition, while Boston has lots of superb computer programmers, the region is short on video game artists.

Myers hasn't found a publisher for his game. But conference organizer Farrar said Massachusetts developers who produce excellent work will always be able to find support. "Publishers will go where the talent is," he said.

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