Inside the world of business

THE COMPUTER games industry now rivals Hollywood for size. And in that €50 billion-plus a year industry few names are bigger than Electronic Arts.

As such the news that its BioWare subsidiary will establish a European support centre in Galway creating 200 jobs is a major feather in the hat of IDA Ireland.

The country now has a small but significant video games industry. Activision Blizzard came to Cork in 2007 promising 100 jobs at its European support centre by this year but last year employment had already grown to 600. A number of other significant players in online games such as PopCap Games, Gala, GOA and Big Fish Games also have set up shop in Ireland in recent years.

Those operations are largely focused on support and the challenge now will be to add more high-value activities such as product management and ultimately games development.

Havok, an indigenous Trinity College Dublin spinout acquired by Intel for $110 million in 2007, which provides tools to allow developers to create more realistic games, shows that Ireland has the skills to play at the heart of the industry.

Many of the technology multinationals who are central to our economy came here in the 1990s with support operations. The aim of the IDA and others will be to assist EA and the other games companies to make the same kind of transition.

C&C a moveable feast

C&C HAS gone through a massive shift since it was floated earlier in the decade. Back then, it mixed drinks and snacks, selling everything from cider and whiskey to crisps and mineral water. The company will next month enter the final stages of its transformation when it asks shareholders to approve the €295 million sale of its spirits business, which produces Tullamore Dew, Irish Mist and Carolans, to Scottish distiller William Grant.

It would be surprising if shareholders turned down what looks like a good offer for the division. If they say yes, the transformation of C&C from a broad-based business to one focused on beer and cider will be complete.

At that stage cider, the Bulmers and Gaymers brands, will account for around 60 per cent of its business, with Tennent’s beer taking up the rest. Most of its sales and profits will come from Britain, as will around two-thirds of its production capacity.

There will be fewer reasons for it to stay in Ireland. In fact there will be only two: it is profitable to remain here; and Bulmers has a heritage as an Irish cider. The heritage issue is easily dealt with: while it might be stretching a point to ask consumers to drink Irish whiskey that’s distilled in Beijing or scotch that’s distilled near Prague, it’s not so much of a leap with cider – you’d get away with sticking “made to an Irish recipe” on the bottle.

In any case, a real stickler for heritage would point out the Bulmers recipe originally came from an English company, HP Bulmer, which still controls the brand in Britain, which is why C&C’s cider is sold as Magners over there.

The profitability issue is far more important. The good news is that the Clonmel-based cider business is profitable and chief executive John Dunsmore says that the group is focused on building an international business based from Ireland. But even that commitment comes with the caveat “as long as Ireland remains competitive” – which really could mean anything.

Neary set to sing?

The report of Central Bank governor Patrick Honohan into the performance of the regulatory authorities in the run-up to the financial crisis should make for interesting reading. Honohan is on schedule to hand over his report to Minister for Finance Brian Lenihan on Monday, though the Cabinet may need time to peruse it before publication.

The Government will also have to digest the other report by banking experts Klaus Regling and Max Watson into the causes of the financial crisis, so it may be early next month before the two reports receive a public airing in a fully disclosed or redacted format.

Together, they will form the basis of a statutory commission of investigation into the crisis.

The roles of former Central Bank governor John Hurley and Financial Regulator chief executive Pat Neary, and the relationship between their organisations in the run-up to the September 2008 financial meltdown, should feature in Honohan’s report.

Neary has remained a silent figure since his departure in January 2009 over the regulator’s handling of Seán FitzPatrick’s hidden loans at Anglo Irish Bank.

Pressure had been mounting since his disastrous appearance on RTÉ’s Prime Timethe previous October when he said the Irish banks had plenty of capital to withstand any losses on property loans.

His early retirement – before the nationalisation of Anglo – meant he avoided probing questions about his supervision of the financial sector and the shocking details that have emerged at the banks over the past 17 months.

Neary may have some fascinating points to make about pressure that was brought on him by a senior establishment figure when the regulator belatedly tried to rein in the banks on speculative lending to developers and 100 per cent mortgages in 2006. If and when he sings – potentially to a commission of inquiry – Neary’s song may strike discordant notes for some listeners in officialdom.

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The Director of Corporate Enforcement will release his 2009 annual report, while Elan will host its agm and the CSO is scheduled to issue trade figures for March.

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