Game industry welcomes push to extend tax breaks for films to video games

The local video game industry has come out in support of comments made by arts minister Simon Crean, which advocated extending tax credits available for filmmakers to the games sector as well.

The comments come after a shocking few years for the industry. While mobile developers have succeeded, nearly all the larger studios have closed as work-for-hire dries up and major publishers retreat to headquarters as the cost of doing business in Australia continues to rise.

Firemint founder and chief executive Rob Murray says the two-speed nature of the industry means more support needs to be given out to larger studios.

“We’re doing quite well, and we’re part of a big multinational company now. But you need a large thriving industry across all of Australia, not just in the few outliers that have really succeeded very well,” he says.

“I’m totally supportive of extending this to games.”

The comments were made by Federal arts minister Simon Crean, who told Fairfax that there is a “strong case” for extending the producer rebate, which is eligible for 40% of “eligible Australian expenditure”.

The producer rebate has enabled a number of feature films to operate out of Australia.

“Until I went to George Miller’s studios… I hadn’t understood the extension of the film industry to the game industry,” he said. “It’s a logical extension to what we’ve already proved our worth at and the international market already values.”

The comparison between the film and games industries is apt. The latest PwC media outlook pinned it as the fastest growing sector over the next four years, and blockbuster games regularly net more than major box office hits – the latest Call of Duty title earned $US775 million in less than a week.

And as Murray points out, Australia has plenty of talent to add. There are scores of university courses and private institutions that train good designers and developers, who then leave for major development cities.

“I don’t know what I would have done if I hadn’t have gotten a job, I would have perhaps had to look elsewhere. And so many people want to actually work here and do creative things.”

The industry welcomed the new R&D tax credit which will help software developers, but is still suffering as trained artists head for areas of higher employment.

But that issue has been made more difficult as work-for-hire dries up, which has caused many smaller studios to fail. Just this year alone, Visceral Games was shut down, along with THQ’s decision to close its Brisbane studio and the Blue Tongue Entertainment studio.

But it isn’t just smaller, independent studios. Team Bondi, the studio responsible for the blockbuster game LA Noire, was revealed by SmartCompany to have fallen into administration. It is believed employees from there were merged into George Miller’s studios.

While Murray says studios such as Firemint and Halfbrick have found plenty of success in the mobile market, he argues there is too much creativity to waste.

“We have the perfect companion to the mining and financial services industries. We need these opportunities to work in a creative sphere.”

“We’re part of EA, and they are very bullish about Australian talent. If you get the economy right, you get the business environment strong, that’s a great plus for the industry.”