Australia’s multi-million dollar game development industry is now stronger than ever. But is our growth sustainable? GameSpot AU checks out the challenges the industry is facing and asks the question: do we really need a local game industry in the first place?
Despite the millions of dollars we spend as a nation every year at the cinema, not many Australians would guess that there's a local industry even more lucrative than film. The fact that video games are now making more money in Australia than the cinema box office would come as a revelation to many, and even more so that a whole local industry exists behind their development.
Yet the video game development industry in Australia is growing bigger every day-- with video games continuing to grow in popularity and the industry's growing international reputation and commercial successes, the industry has the capacity to become the dominant force in the Australian entertainment landscape. But despite the profitability of video games in Australia, there is very little government money actually spent on their making. The games development industry, like all creative industries, needs to be invested in.
Australian developers currently mainly work as fee-for-service contractors, making games by commission from international publishers--coming up with an original game from scratch would cost an Australian developer upward of A$10 million, something that only government funding would allow to happen. This lack of financial support, along with an ever pervasive skill shortage and only a fraction of the recognition of other entertainment industries, is limiting the full potential of the Australian industry.
Local developers and industry bodies such as the Game Developers Association of Australia (GDAA) have continually pushed for federal government funding--without success--as a way to secure the industry's future growth and its competitiveness on a global scale through the successful development and commercialisation of its own original intellectual property (IP). The industry now fears that without government support the industry cannot prosper, increasing the skill shortage already present and forcing more and more home-grown talent to move overseas. With such a predicament to face, it seems worthwhile to ask the question: does Australia really need a games development industry to begin with?
Show Me the Money
Australian game development studios are renowned throughout the world for producing high-quality games. Just in the past few years, studios throughout the country have been at the helm of some big game releases. Krome Studios has produced Viva Pinata:Party Animals, Star Wars: The Force Unleashed, and Ty the Tasmanian Tiger; Infinite Interactive has Puzzle Quest; Take Two Australia worked on BioShock; Creative Assembly has Medieval: Total War; while Team Bondi has the upcoming LA Noire. Unfortunately, this hasn't been enough to attract the attention of the Federal Government.
In April 2007, a very public debate broke out between the local game development industry and the local film industry over funding. The GDAA called for a federal government grant and the same tax break and 40 per cent rebate being offered to the local film industry. The Screen Producers Association argued that the local film industry shouldn't have to share any of their funding with the video games development industry because video games, unlike films, have little or no social and cultural value. Geoff Brown, a member of the Screen Producers Association, appeared on the ABC's 7.30 Report (on an episode which aired on April 26, 2007), and had this to say about government concessions afforded to the local film industry: "Those concessions, as they currently stand, are primarily for film and television production and they're there to serve the government's social and cultural objectives. The extent to which we can say games fall into that category, we think is problematic to say the least."
This comment sparked heated debate amongst Australia's gaming community. The local film industry is well funded by the Federal Government, with six separate bodies in place, such as the Film Finance Corporation and the National Film and Sound Archive, as well as further tax breaks designed to attract private investment and big overseas productions. This kind of government commitment is something the Australian games development industry is in dire need of.
In 2007, total film gross in Australia was A$895.4 million, with only four per cent of that total amount coming from Australian-made films. By comparison, Australian game hardware and software sales reached A$1.3 billion in 2007. The Australian Bureau of Statistics (ABS) conducted a report into Australia's digital game development services earlier this year and found that at the end of 2007, 45 businesses in Australia were involved in the provision of digital game development services, employing over 1,400 people and generating a total income of A$136.9 million. Of that income, 79.1 per cent was earned from overseas sources, while government funding contributed a mere 1.2 per cent of the total: this is what the GDAA has been fighting to change. The GDAA has petitioned the Federal Government on five separate occasions to date, submitting countless papers, reviews and proposals for funding with zero success--a baffling response given the industry's current profits and exponential growth rate.
The GDAA was formed in late 1999 by some of Australia's leading developers, with the purpose of increasing the profile of the Australian interactive game industry both locally and internationally. Throughout the years it has grown into the peak representative body for the Australian industry. Tom Crago is the current President of the GDAA and also heads up the representative board that is comprised of CEOs from some of Australia's leading game developers. Crago is also the head of Melbourne-based developer Tantalus. He says it is important that Australia keeps its own games development industry.
"It has taken time, but Australia has arrived as a premium destination for game development," Crago said. "We're pretty good at making games in this country, and in a way we always have been. That, for me, seems like a good reason to back it [the games industry]."
Currently, Australian developers get money from development deals and fee-for-service work on licensed titles. This will very likely remain the case until developers have enough funding to work on original IP, which Crago believes is what really drives value. "We've always had to survive by being profitable at what we do," he said. "If we were treated the same way as the film industry by the Federal Government, investors would rush in. This would mean that all Australian companies could grow, potentially tripling the size of the industry and access to talent would flow through our training institutions as they realise the full potential of the industry as an employer of their graduates."
Due to the rapid growth of the industry, the skills shortage is as serious as ever. The same ABS study shows that at the end of June 2007, there were 1431 people employed in the local video game development industry--34.3 per cent artists and animators, 29.1 per cent programmers, and 14.8 per cent managerial and administrative.
"It's about spreading the word that we are a serious and mature industry," Crago said. "Gamers need to ensure that their voices are heard more loudly. Already Australians are spending more money each day on interactive entertainment than they do on movie tickets, and yet for the most part our collective voices go unheard."
Having already formed a strong bond with universities and colleges offering video game-specific courses, the GDAA will now turn to spreading the message in high schools. "It's really important that parents look at our industry positively, and are prepared to encourage their kids to pursue a career in games."
This endeavour to educate and change outdated perceptions will also be useful in convincing the Federal Government to take a serious interest. Whether the government still believes the industry to be too young, or simply just an industry for children, remains to be seen. "What's really disappointing is that, in the case of federal government support and recognition, we are currently wasting such precious time," Crago said. "Each day that we don't grow our industry is a day lost to other countries whose governments understand the value of getting behind it."
"However, we feel there's a chance that the current Government may see the world differently, and to date our discussions with them have been productive."
So far, the GDAA has been submitting appeals for industry funding to the Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy. When pressed why the Federal Government has donated so little funding to the advancement and growth of the local game development industry, Conroy pointed GameSpot AU to a number of government initiatives that the industry already has access to, including the R&D tax concession, the Commercialising Emerging Technology program, Export Market Development Grants, and Enterprise Connect. Yet it is clear that the industry bodies such as the GDAA do not agree that enough has been done. On October 30 this year, the Federal Government will host a roundtable with representatives of the digital games industry including the GDAA, IEAA, and the Australian Interactive Media Industry Association. Conroy says this meeting will enable the government to learn more about the industry.
"We will be able to establish a more coherent approach across government and thus allow the sector to be appropriately considered among broader budget priorities," he said. "The meeting will also be an opportunity to discuss a number of issues facing the industry, such as skills and infrastructure."
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