For many years the North East has been developing its reputation as a hub for tech firms, with much of this coming from the host of start-up companies founded in Newcastle.

While these companies have found success, helped along by co-working spaces and accelerator programmes, there has been little done to help these businesses scale-up.

But across the river, in Gateshead, plans are now well under way to grow the town’s tech community from a bubbling community of start-ups to an internationally recognised centre for digital businesses.

At the centre of this plan is the Baltic Quarter development, and the three commercial buildings at its core. Baltimore House, the Northern Design Centre and the recently opened Proto have been designed as a new hub for digital firms: the Silicon Valley of the North.

Atomhawk's concept art is displayed around the Northern Design Centre
Atomhawk's concept art is displayed around the Northern Design Centre

The initial plans were put forward back in 2008, and Gateshead Council’s involvement was initially going to be limited. But unforeseen circumstances, and an opportune move, saw the council take over the site.

“This place [The Northern Design Centre] was originally a One North East project,” says Chris Pape, portfolio manager at Gateshead Council. “The idea was that One North East would build half this building and the other half of the building would be built by developers, who would build it speculatively.

“The developers couldn’t do their bit any more and we were approached by the authority and asked to do our bit. We entered into a partnership with One North East but the Government decided to close the regional development agencies. One North East then asked if we wanted to do the whole thing.

“We were running the Gateshead International Business Centre and that was full of businesses that were out growing it quickly.”

The Northern Design Centre, with 60,000sq ft of space over four floors, provided a great place for growing tech firms to move into, but the council realised that it could do more to support businesses. Its next big step came when the council acquired Baltimore House, located next door to the Northern Design Centre.

With an additional building in its portfolio, Gateshead Council wanted to provide something new for local businesses, something that would allow them to grow.

“We were just buying Baltimore House and we thought about not just filling it with businesses but doing something within the space.

“We thought about launching an accelerator programme, they were really popular at the time. I was at the VRTGO conference and I was listening to the speakers when I realised 95% of the people there were from Gateshead. They said: ‘We are really excited about virtual reality (VR), and we are writing the rule book as we go along’. That was when I realised there was something going on with VR.

“I thought: ‘What can we do with that space we were going to use for an accelerator?’. We pivoted, and used it as a space for VR.”

The office led to the creation of VRTGO Labs, Europe’s only industry-led VR and augmented reality centre. The initiative allowed companies to access the latest VR equipment, as well as a demo room and co-working space.

Its facilities have attracted some of the region’s top VR companies, and it now houses a Hammerhead, Chronicle VR, Somniator Games, and even a team from Facebook’s VR company Oculus.

A host of North East companies are now focusing on developing, or at the very least, using VR technology. The technology is still evolving but already it has found its way into households through the video game market, with Oculus and Playstation both releasing affordable VR headsets.

As the technology became more prevalent in day-to-day life, Chris and his team realised that to make the Baltic Quarter a true hub for tech firms it would need to look other high level technology. That is now the focus of its latest building, Proto: The Emerging Technology Centre.

Proto is in the process of installing motion capture technology in its building
Proto is in the process of installing motion capture technology in its building

“We realised VR would eventually become mainstream so we decided to make it an emerging tech centre,” says Chris.

“As we speak the 360° photo gravity rig is going in. It is 120 SLR cameras all facing a central point. We can put you in the middle and all the cameras would go off and we would have a 360° model of you.

“The next thing to go in is a motion capture suite. We can take that model and get someone of a similar build go in and move around, and it will look like you are doing it.”

By combining the two pieces of equipment local companies will now be able to quickly create 3D models for use within their projects. It means that Hollywood actors or international footballers could be quickly captured and placed within a video game.

The technology paves the way for film companies and game studios in the region to make use of expensive equipment usually only available to larger firms. The ability to do this is a game changer for those based at the centre, such as game studio Pocket Money Games.

“The idea of Proto is to increase the economy by allowing interesting companies access to kit only big companies usually have access to,” says Frankie Cavanagh, CEO of Pocket Money Games. “Every step of the way the council are asking us what we need. Having access to kit like motion capture is hugely significant.”

Pocket Money Games has developed a number of games such as Dimension Hunter and Henry The Hamster Handler. It also runs a division called PerceptionXR, which uses its VR tech for commercial means, such as providing training for companies.

Accessing the equipment at Proto is a feather in Pocket Money Games’ cap, and has allowed it to compete with much larger studios, both locally and in London.

“Publishers don’t understand where I am,” says Frankie. “They ask how much we need and they say: ‘That’s ridiculous, you can’t build a game for that much’. They laugh at you as they don’t know how you can do it. They don’t understand I have a motion capture suite and a sound recording studio. When you take that out, it’s a big saving.

“The advantage is I can undercut a firm somewhere else by £100,000 and still be in huge profit.”

Gateshead, and the wider North East, has also benefited from a growing community of game developers, whose work is varied enough that studios are not always directly competing.

Much of this community can trace their roots back to the collapse of Midway Games’ North East office.

Midway was an American game studio famous for creating the Mortal Kombat series, and 10 years ago the company ran an office on Team Valley. The studio was the company’s only base outside of the US but when the company filed for bankruptcy it was forced to close suddenly, leaving many local developers out of a job.

However, many of the talented staff at the studio decided to launch their own businesses, the most famous being Atomhawk Design, which has created concept art for blockbuster movies such as Guardians of the Galaxy.

The company was founded in 2009 by former Midway studio art director Cumron Ashtiani, who was persuaded to set up his new business in the Baltic Quarter. The firm is still based at the Northern Design Centre and has proved so successful it was acquired by Sumo Digital last year.

Midway’s demise not only led to the creation of Atomhawk but also led to talented games developers moving to other ventures and creating a diverse ecosystem for tech workers.

Frankie is working hard to bring this community even closer together by creating a professional network in Gateshead that can host networking opportunities and bring in guest speakers to provide advice to its members.

This community is one of the reasons why AAA games studio People Can Fly decided to open their only studio outside of Poland in Gateshead. The company has worked on the smash hit Fortnite and is currently developing a new IP for Square Enix.

“As we are a bigger studio we have our own motion capture suite and access to funds, and the joys that brings,” says studio head John Walsh. “The location helps us though. The networking, the access to the council, and the recruitment opportunities it brings.

“The reason we set up here with the two Polish studios is because there is experience we can call on. I have been doing this for 24 years and there is a lot more experienced people that are willing to move to the UK. People from the US are more likely to move here than Poland.

“The plan is we end up with experience and the talent that Warsaw can’t manage, and the talent and experience from bigger studios and publishers. We can combine that in Gateshead and send it through to the other Polish studios.”

He adds: “If it wasn’t for those people and the network in place, we wouldn’t be here with a AAA studio.”

Gateshead is proving to be the ideal place for games studios and tech developers to set up shop: it’s cheaper than London; it has access to talent through the universities; staff are less likely to be poached by rival studios; and the quality of life is better than London. But despite all this Gateshead suffers from a serious branding issue.

While the council has worked tirelessly to create a tech hub, you will very rarely see Gateshead mentioned in a studio’s address.

“Our jobs are advertised as Newcastle as it is a better branded city,” says John.

Frankie adds: “For years I have had to refer to myself as Newcastle but as we get bigger that will change. If we want to keep building this it is our responsibility to start saying Gateshead.”

Both Frankie and John have great respect for the council’s work to develop the Baltic Quarter as a centre for tech firms.

Gateshead is still battling to create its international image as a hub for emerging technology, and its work is nowhere near finished. The immediate area surrounding the three tech centres in the Baltic Quarter is set to be developed even further in the coming years. A new residential building is soon to be constructed on site, while the £200m Gateshead Quays conference centre will be built nearby, promising to turn the area into a hive of activity by bringing with it hotels, office space, pubs, and restaurants.

The council is also investing in the future of the studios based in the Baltic Quarter by building a fourth commercial building on the site.

The Riga Building has been designed as a home for businesses looking to scale up their offering after finding success in the other three sites. Once completed Riga will provide around 47,000sq ft of space across its six floors, offering larger office space than its sister buildings.

Riga is an important part of Gateshead Council’s strategy, the final piece of the puzzle that will allow entrepreneurs to enter the Baltic Quarter as a start-up and move through the hub during their lifecycle of growth. It also provides space that could be used to attract larger, international firms to the region.

“We want businesses to grow here and create jobs here,” says Chris. “That is why we are building Riga, so the businesses here will stay around Baltic and Gateshead.

“If Riga goes really well I wouldn’t rule out Riga 2.”

Newcastle may be well known for its tech scene but if everything goes to plan, Gateshead will surpass it as an international hub for emerging technology.