At first glance, one might think that the Los Angeles gaming industry is confined to the so-called Silicon Beach, which encompasses global giants such as Culver City-based Riot Games Inc. and Santa Monica-based companies Activision Blizzard Inc. and Naughty Dog. However, another set of thriving gaming companies does business a few miles north in the San Fernando Valley. Some, like Woodland Hills-based Infinity Ward Inc. and Burbank-based Insomniac Games Inc., have held onto their Valley headquarters for more than a decade, staying through acquisitions by other major companies and significant events such as the Covid-19 pandemic and the 2008 financial crisis.
The San Fernando Valley does share several demographic characteristics with Santa Monica, according to the Census Bureau, including similar population densities and employment levels. Over time, many Valley residents and business owners have asserted that it has a separate identity from the rest of Los Angeles, a claim that has been acted upon through several attempts to secede from L.A. proper over the last 50 years.
On its own, the local economy is bolstered by the entertainment and media industry, including companies such as The Walt Disney Co. and Warner Bros., but also by a growing aerospace and aviation industry. The Los Angeles County Economic Development Corp. ties the Valley’s “independent and quite entrepreneurial” business community to the reputation it has earned for being business-friendly and proactive, with less government oversight and a wealth of business assistance programs.
Similar to Silicon Beach’s gaming companies, several of the Valley-based gaming companies have gone through acquisitions. Infinity Ward, which developed the best-selling “Call of Duty” franchise, was founded in 2002 and acquired by Activision only a year later. Although Activision – itself recently acquired by Microsoft Inc. – is in Santa Monica, Infinity Ward has never moved from the Valley.
Jack O’Hara, co-studio head of Infinity Ward, says that while there are pros and cons attached to both Silicon Beach and the Valley, Woodland Hills has been home to its studio and team for more than 20 years. As for the company itself, O’Hara says the Valley is well situated to give it access to talent around the county and beyond, adding that Infinity Ward employees commute from Culver City, Santa Clarita, Pasadena and even Palmdale.
“We have folks that live east, west, south and north of the studio, and meet here every day to make record-setting entertainment” O’Hara says. “The location provides access to a large pool of talented individuals from across the region and, for out-of-state candidates, the San Fernando Valley can be accessed from a lot of areas in L.A.”
O’Hara says that, although Activision is in Santa Monica, its Valley studio location is focused on allowing it to hire the best people and make the best games, rather than proximity to its parent company’s headquarters.
Other companies stay at home
Another local studio, Insomniac Games, has been in Burbank since 1994 and remains even following its 2019 acquisition by Sony Interactive Entertainment LLC for $229 million.
Chatsworth-based Respawn Entertainment LLC was founded in 2010 by two former leaders of Infinity Ward and was purchased by Electronic Arts Inc. in 2017. Respawn has since opened another studio in Vancouver, British Columbia, and announced last year that it will open a branch in Madison, Wisconsin, but its headquarters haven’t budged from Chatsworth.
To Rory Bebbington, founder and chief executive of Marina del Rey-based Fabric Staffing, there are two things that keep video game company executives, particularly those at smaller studios, committed to their Valley offices: cost and convenience.
“It’s probably close to where the founders live, and it’s a lifestyle choice because they don’t want to commute to Santa Monica,” Bebbington says. “The second reason is rent prices … Santa Monica would put their operating expenses up by 50%. If cost was no object, of course they’d be in Santa Monica.”
While rent prices may not be the deciding factor for where a company chooses to set up shop, the cost difference between the Valley and Silicon Beach is stark. According to Jones Lang LaSalle Inc., asking rents for class A office spaces in the San Fernando Valley averaged $2.91 per square foot in the fourth quarter of last year. By contrast, asking rents on the Westside averaged $5.82 a square foot, and in Century City, the average was a whopping $7.29 per square foot.
Some firms have personal reasons
For Sherman Oaks-based Mythical Inc., the choice to operate outside Silicon Beach is a bit more personal. Mythical co-founder and chief executive John Linden says that the initial reason his company chose to set up shop in Sherman Oaks was because of its proximity to his home. However, Mythical has also seen some advantages in its access to talent due to its location, similar to Infinity Ward.
“We chose Sherman Oaks because it was near my house, honestly, and I was tired of driving to Santa Monica,” Linden says. “But I think, for us, we also chose that area because it was a good location to get people. We were able to get (talent) all the way from Burbank, to Pasadena, even coming up from Santa Monica kind of against traffic … that was primarily the reason, and honestly, it wasn’t bad being walking distance to the house for me, personally.”
Linden emphasizes that Mythical’s Sherman Oaks office, as well as its offices in Seattle and Lisbon, Portugal, are remote-heavy. While hybrid or remote work options are not exclusive to the gaming world, Bebbington says that Valley employers may be more inclined to offer such options when looking to acquire talent.
“Those companies that are in the Valley have to pull some levers to make it more attractive,” Bebbington says. “Using a hybrid model versus (requiring) five days a week in the office is an advantage, and if they don’t want to use those advantages the talent pool is going to become less and less.”
Although several of these companies are deeply rooted in the Valley, Bebbington says that the area may not appeal to many employees, particularly younger ones. While workers are sometimes priced out of Silicon Beach by its living costs, he says the area’s “power” in the video game industry and presence of leaders such as Riot and Naughty Dog still pull tech workers there over the Valley.
He adds that the appeal of working at a studio in the Valley may be greater to the “slightly older” crowd of individuals who might have already moved to the Valley to buy a house or start a family. According to the Census Bureau, the San Fernando Valley, Marina del Rey, Culver City and Santa Monica all have a median age of about 40.
“Here’s the thing: people will commute from the Valley to Santa Monica, but they won’t commute to the Valley if they live in Santa Monica,” Bebbington says. “Because they don’t need to. Santa Monica has pull because that’s where the ‘cool’ companies are, which is probably its biggest defining factor.”
Although most of L.A.’s large gaming titles operate in Silicon Beach, smaller studios are still cropping up around the Valley and big names such as Infinity Ward, Mythical and Respawn have remained at their local offices through purchases and pandemics. O’Hara says that, at Infinity Ward in particular, employees have developed strong ties to the area. Some Infinity Ward employees have been working in the Valley’s gaming industry for as many as two decades.
“I think the main draw are the games and the talent associated with our studio, but I know we also have some employees with deep roots in the area that appreciate it for all kinds of reasons, including housing,” O’Hara says. “We’ve been in the Valley for 20 years, so this is home for the studio and the team, and they have built up (their) families, relationships, favorite businesses and schools.”