Thursday, September 17, 2015

What will it take to make Australia's video game development industry grow?

Screenshot of Australian Senate website


Submissions are closing tomorrow for a Senate inquiry into the future of Australia's video game industry. I have added my two cents worth with respect to the terms of reference:


a.how Australia can best set regulatory and taxation frameworks that will allow the local video game development industry to grow and fully meet its potential as a substantial employer,

b.how Australia can attract video game companies to set up development operations in Australia and employ local staff,

c.how export opportunities from Australia's local video game industry can be maximised, and

d.any other related matters.


Ultimately, I came up with about five recommendations based on anecdotal evidence and online studies/articles which I thought would encourage growth of Australia's very small video game development industry.

1. Generous Tax Incentives

The Federal Government should take the lead in offering generous tax incentives to video game developers but not only on a federal level but encouraging the states to follow suit too. When Screen Australia's Interactive Games Fund had its funding cut last year by the Abbott Government, I believe Film Victoria did the right thing in ensuring they still offered a means for (Victorian) game developers to request financial support.

Australia should look to countries like Canada where it now has the largest gaming industry in the world on a per capita basis: there are over 329 gaming companies employing over 16,500 people and it's mainly thanks to generous tax incentives on a state and federal level. For example, the Ontario Media Development Corporation (OMDC) offers to pay back 35-40% to gaming companies for any dollars spent on developers, artists and marketing. The ODMC also supports new game projects through the Interactive Digital Media Fund which covers from $150,000 up to 50% of a game's development budget. In the last year, apparently 23 games have received this fund. There are also generous federal funds for game development.

Australia should also open up generic innovation and research funds to game development as well as they do in Canada and the United States. Australia could also encourage the acceptance of graduates and interns into game development studios by providing tax breaks or funding to the companies that encourage it.

2. Reinstate the Interactive Games Fund

I am not exactly sure about the current state of Screen Australia's Interactive Games Fund but I'm assuming that the funds have run dry. In places that have become game development hubs such as Canada, the United States, UK and Sweden, there are often generous game development funds. I say "generous" but in reality they usually make a very small percentage of a state's GDP. For example, Texas, one of the gaming hubs of the USA (which also happens to be where Cloud Imperium Games, the developer of the largest crowd-funded game ever, Star Citizen, is situated with $89 million+ in funding) allocated $85 million to fund games development this year. Considering the Gross State Product is around $1.6 trillion, that's about 0.005% of it. The UK has earmarked $171 million over 4 years towards game development, so if we say that's about $42 million per year that's 0.0014% of the UK's $2.9 trillion GDP. In comparison, Australia had the Interactive Games Fund which contributed $20 million over 3 years, although half of it was cut. If Australia wishes to remain competitive when it comes to promoting home-grown video games development, I would recommend somewhere between $20 million - $65 million per year given these figures.

3. Make Australia attractive for game developers to live in

Software engineers and computer scientists are at the forefront of technology and so it makes sense that they would find countries that are similarly forward thinking and progressive as ideal places to live. In order for this to happen, some of Australia's current policies need to be changed and priorities shifted. With respect to the Internet, a proper National Broadband Network (NBN) would be beneficial to future proof Australia's network infrastructure (or at the very least, ensure we do not fall behind when compared to other nations). We should also repeal draconian measures such as Australia's policies with respect to Internet censorship and mandatory filtering.

While Australia already has some of the most liveable cities in the world thanks to our cities having relatively clean air, wide open spaces and being close to nature, there is still room for improvement especially with respect to public transport and our over-dependence on motor vehicles to travel to just about anywhere. Telecommuting should be encouraged whenever possible to help reduce traffic on our already congested highways.

4. Educate those with capital

Those with the money to invest may not realise that the video games industry can be a very profitable one and that some video games can now earn more money than blockbuster films. By educating those wanting to invest in new businesses and showing that the video games industry (worth billions of dollars worldwide) is only going to get bigger, this would encourage more investment into the video games industry from the private sector.

Gamers also need to be treated with dignity and respect. There is an old perception here in Australia that gamers are all children, most likely a significant factor in why the R18+ rating arrived so late in Australia. We need to foster a positive gaming culture since if we can do so, a more diverse group of individuals will enter the world of video gaming and the more people you have playing video games, the higher the chances of seeing some of these gamers pursuing careers in the video games development industry themselves.

5. Promote Software Engineering/Games Development Courses

This suggestion not only applies to video games development but software engineering/development in general. Software Engineering needs to be seen as a valid profession and not a means to an end. Often, computer programmers are seen as individuals that only build software or technology to support existing primary or secondary industries such as mining, meaning there is very little demand for software engineering or innovation in Australia, resulting in many individuals finding better employment opportunities overseas where the work is either more challenging or their skills are actually valued.

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