James Riley
September 15, 2015

Game developers at Crossy Roads

Game developers at Crossy Roads

Trouble in paradise: The Australian games development sector is shrinking

If you watched the stylishly gargantuan Apple product launch in San Francisco last week, you could be forgiven for thinking that the Australian game development industry must be going through a bit of a purple patch.

There on stage was that nice young bloke from Melbourne – Andy Sum – telling a global audience of Apple crazy-people about Crossy Roads, his extremely successful and somewhat annoying arcade-style game.

Andy Sum – from the very cool developer outfit Hipster Whale – is like a walking advertisement for everything that is right about game development in Australia. Young, smart, creative and passionate. Successful. And good fun.

Australia has a rich history in this sector. Some great work done over a long period of time.

It turns out, however, that the Crossy Roads star-turn at the global Apple launch is not representative of an industry that is struggling. Shrinking, in fact. And some of our best and brightest – and most experienced ‘grey beard’ talent – is being lured offshore to better opportunities.

There are questions being raised now about the structure of government programs designed to assist the sector, and whether it has fallen through the cracks between the portfolio interests of different ministers.

The stark reality, according to the Interactive Games and Entertainment Association, is that the video games development industry has suffered a serious decline in employment figures.

In 2012 the industry employed just one-third of the number it had employed five-years earlier in 2007. That is one-third the number it employed in the pre-smartphone ers! Income generated in Australia from games development fell from $116.9 million to $89.4 million.

These are disappointing numbers.

The Senate Environment and Communications References Committee chaired by the Greens’ Scott Ludlam is conducting an inquiry into the Australian video game development industry. Submissions to the inquiry close on Friday with its full report due at the beginning of April.

The great shame is that this inquiry is considered necessary. The games industry globally is a fast-growing sector. The addressable market for its products is global. And contemporary competitors in this market – Canada, Russia and the US – are enjoying especially strong growth and have attracted talent from Australia.

It has fallen to the Interactive Games and Entertainment Association (IGEA) to lead the charge for policy changes that will help sustain the somewhat brittle eco-system. This in itself is cause for reflection, as IGEA is the industry group representing the publishers distributors and marketers of game; the bigger multinational groups like Microsoft, Nintendo and Electronic Arts.

Australian game developers tend to be the lean, very innovative and without the kind of resources that enable this kind of big picture advocacy and lobbying.

But IGEA chief executive Ron Curry says the vibrancy of the whole sector starts with a healthy games development community. And Mr Curry is concerned. If the sector is only employing a third of the number it boast five years ago, and if its revenues are shrinking against a growing global industry, then clearly there is a problem.

At stake is Australia’s position in the global supply chain. Once Australia drops off the radar as a place where experienced games developers can drive the expertise of new talent coming through, it gets tough indeed to get the ecosystem back to health, Mr Curry says.

The thinking is that although game developers are like startups, they’re not startups. They are the same, but different. The creative element in the development process sets them apart, and as a consequence has seen them fall through the crack – between the Arts portfolio, the digital economy parts of the Communications portfolio, and the more generic industry development components of the Industry portfolio.

Under scrutiny will the role of Screen Australia as the ‘home’ agency for games development support, and more generally its position with the Arts portfolio under (at least until now) the Attorney-General, George Brandis.

There are certainly things government can do to help sustain local developers (and there is a list of seven key recommendations put forward by IGEA listed below.

But what the development community needs from policy-makers right now is interest. It currently does not have a champion from within the government ranks looking out for its interests. Governments can’t create super-innovative, super-commercial games successes.

But it can help the developers who do create these things to get over the non-commercial phase of their development. Just like startups, but requiring tailored strategies to cater to the different demands of competitive creativity.

There is a lot of research on the gaming sector conducted over many years (much of it by IGEA) that debunks much of the mythology about who plays games. It make interesting reading. Most fascinating is the sheer size of the market – rivalling or outstripping traditional entertainment sectors of music and movies and live entertainment.

Australia makes up just two per cent of the world market for interactive games. Australian retail sales were nearly $2.5 billion in 2014 (this excludes revenue from games development fees or exports). This makes the global market a very big number indeed.

Games developers in this country do not develop games for the two per cent of the global market that live in Australia. They develop games for the world, for the 98 per cent of the gamers across the planet.

This is a weightless export industry worthy of our support.

The IGEA list of seven key recommendations to the Senate committee are:
• Extending the Producer Offset to interactive games development
• Self-sustaining funding for interactive games’ projects and studios
• Supporting innovation clusters, including in regional areas
• Developing and retaining cutting-edge games developer talent in Australia
• Creating targeted support for digital economy focused export initiatives
• Committing to the updated classification regime
• Updating Australia’s National Digital Economy Strategy

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