CCP in the Land of Fire and Crisis


An in-depth interview with CEO Hilmar Veigar Pétursson on how CCP and FanFest 2008 will be affected by the Icelandic monetary crisis.

by Jeff "Ethec" Woleslagle

CCP CEO Hilmar Veigar Pétursson

Earlier this month, Iceland's largest banks became the first major casualty of the recent global economic downturn when the Icelandic Parliament, voted to nationalize the tiny country's sizable banking industry in an emergency measure. Though the causes will be studied for years to come, it's clear that Icelandic banks didn't build their tenuous wealth in subprime lending. What is clear is that Iceland's modest central bank wasn't prepared to guarantee against the dramatic vicissitudes of the global economy, and through a series of events that aren't yet fully understood, the Icelandic króna (ISK) took a nightmarish plunge against the US dollar by over 35% (and even more against the Euro and Pound Sterling) since last month.

The economics are complicated; the reality is not. Such a steep devaluation in so short of time means serious trouble for any local economy, and though the media has turned the page on the Icelandic situation, the current reality is that the International Monetary Fund (IMF) administrators and loans - seem to be Iceland's best hope to thaw out the easy flow of currency in and out of the country again.

The most well known Icelandic company, at least to MMO gamers, is CCP, makers of EVE Online, owners of White Wolf Publishing, and developers of the World of Darkness MMORPG slated for 2011. Along with Icelandair, CCP was among the first to reassure its stakeholders that the company remains strong despite the economic upheaval in a special dev blog from CCP CEO Hilmar Veigar Pétursson. After the dev blog was posted, Ten Ton Hammer caught up to Mr. Pétursson with a few questions.

If I was hoping for some silver lining comments for the cloud hanging over the Icelandic economy, I soon realized that I was in for a dose of stony Nordic composure. "We certainly weren't expecting something of this size, but every move we made to make CCP more global was a good move." Nonetheless, Pétursson still has plenty of faith in his countrymen. "The fact that the country was able to build such a large banking system - although it wasn't the sensible thing to do with such a weak central bank behind them - in the span of five years is quite amazing. It's indicative of the creativity and audacity that exist in the country. Now if we can channel that into something that's more our cup of tea... I think we'll have a bright future, even though times will be tough here for the next one or two years."

And, ironically, Iceland's abortive banking endeavors might have weighed down the development of the country's creative talent, according to Pétursson: "What has been holding back further development on the creative industries front has been the banking bubble, which has really sucked oxygen out of the market in terms of bright people. As we see bright people come back out of the banking industry, I think we'll have a renaissance of creative industry companies here.

"Companies like CCP - now that there are lots of clever people coming out of the financial institutions - are definitely the solution to the crisis within the country. Companies like ours have their revenue abroad and then employ people in Iceland, so it's a positive effect on the import / export ratio. Any nation is looking for companies like CCP with a global revenue base and local cost base."

One of those bright people and "renaissance" men is Dr. Eyjifur "EyoG" Gudmundsson, a scholar and part-time statesman who now holds the post of EVE Online's resident economist. I asked Hilmar if the good doctor had been called up to active duty due to the recent crisis. "No, he has his own economy to manage. I'm not going to equate the Icelandic economy to the EVE economy per se, but it's an important economy." Important indeed. Last year a forum post pegged the EVE nominal GDP at a little over 10 million USD, conservatively placing EVE Online's nominal GDP somewhere between the real world island nations of Tuvalu and Niue.

What of the 80 plus ex-patriate developers working in Iceland, who are paid in Icelandic krónur but may have financial obligations abroad? "It has been a little challenging for them while the economic downturn has been going on here in Iceland. But, due to our status as a global organization, we're hard at work figuring out how we can take advantage of that to make sure that all of our employees around the world are fairly isolated from the economic downturn. " As for the feasibility of attracting new development talent to the island nation: "It's a little difficult to predict. It's dependent on how the government and the IMF sort out this mess, but I think it will probably increase."

This year's Fan Fest should benefit from a weak króna.

All this bad news for Iceland is good news for tourists, and with EVE FanFest 2008 only a little over a week from this article's publish date, a weak krónur means Reykjavik bargains for the EVE faithful. According to Pétursson, "Everything in Iceland has been cut in half from last year's FanFest, and even less" meaning that the 10-12 USD we paid for a draft beer last year should be more in line with what we're used to in North America. And if you're coming to Fan Fest (airfare and hotel packages are still available at print time), credit cards should work just fine, but don't rely on the local ATMs. From Pétursson: "I would recommend that people bring currency to exchange at the airport or a local bank. That at least is guaranteed to work."

And CCP is expecting quite a crowd for this year's FanFest. "We started a little bit later in terms of advertising FanFest and offering the packages, so we have been catching up to last year's numbers. The latest trends lead me to believe that our foreign attendee numbers will be slightly bigger, but I think we will have more local attendence this year than last year because CCP is an interesting company to Icelanders in these times."

Hilmar Pétursson hinted that we'd have plenty to talk about next week, both with in-depth coverage of the recently announced winter expansion for EVE Online and plenty more beyond the Quantum Rise expac. Will we finally hear and see more about World of Darkness too? Tune in to Ten Ton Hammer next week, live from Reykjavik, to find out!

A big thank you to CCP's Hilmar Veigar Pétursson and Ned Coker for their help in putting together this interview.