Denham Sadler
January 24, 2017

Games sector finds home in Victoria

Exports

Games sector finds home in Victoria

Gamesmanship: Victoria is now home to more than half of the Australian games development sector

Strong support from the state government has helped consolidate more than half of the Australian games development sector in Victoria, as other states lag behind in supporting the “economic powerhouse” industry.

A Games Developers’ Association of Australia (GDAA) survey completed late last year found 51 per cent of game studios are based in Melbourne. Australia-wide the sector has total revenue of $115 million, with 81 per cent of this income coming from offshore.

Game developers in Victoria enjoy financial support from the state government through Film Victoria, with two different grants on offer.

The assigned production investment aims to assist local games companies to produce a prototype or full game, with up to $150,000 on offer.

The games release grant is aimed at smaller studios to help with the delivery of a “well-planned and marketed release of their project” and dishes out up to $30,000.

The latest round of funding in December last month saw nine game developers share in just over $440,000, while the $115 million creative industries strategy launched in April included digital games at the forefront.

This sustained support for the export-orientated and fast-growing industry has led the Victorian community to be vastly more mature and successful than the rest of Australia, GDAA chief executive Antony Reed says.

“We have a proactive Victorian government supporting tech and innovation, and games have always been part of that process,” Mr Reed told InnovationAus.com.

“We have a Minister for Creative Industry which no other state has, and that’s exceptional. They understand the benefit of games,” he said.

“They have been hugely proactive in their support and understanding of the space so they can make informed calls. It’s been an amazing circle of trust, understanding and knowledge that has led to Victoria leading the way.”

While Victoria paves the way forward, the rest of Australia is lagging behind in its support for, and understanding of, the sector, with only Queensland currently taking steps to address this, Mr Reed said.

“No other state offers Victoria’s level of funding,” he said. “It’s still very early days in Queensland and they haven’t funded that many games yet, but they’re making very positive steps forward for what was once something they were completely oblivious to.

“But in most other states there’s nothing at all, there’s no support.”

Most other state governments still viewed the games industry as a novelty, rather than a solid export performer.

“Legacy industries continue to be supported, but games are still perceived as being toys for kids,” Mr Reed said. “People aren’t seeing them as the economic powerhouses they are.”

While the games industry doesn’t want to become entirely reliant on government support, he says, but some assistance is required until the funding gap is covered by private investors.

“The industry has a really strong desire to not become patronage, to not rely on government handouts, but there’s no investment in the sector,” Mr Reed said.

“We don’t have an investment community that likes risk or innovation that much. Why would you when you can dig a hole in the ground and make money? So government support is critical to grow the industry.”

While Victoria’s funding model is a good starting point, other states will have to consult extensively with the sector to work out the best way forward.

“In Victoria the industry is fairly mature, which is different to New South Wales, which is still growing and finding its feet,” Reed said.

“You couldn’t implement what Victoria has right now, because very few developers would qualify for it.”

The games industry hasn’t received any federal support since the $10 million left in the Australian Interactive Games Fund was cut in the first Abbott-Hockey budget in 2014 and redirected as budget expenditure reductions.

This cut severely stunted the growth of the industry, and placed the burden onto state governments, Reed says.

“More than anything it stopped growth and that was a concern for us,” he sasaidys. “A lot of graduates are coming out of the tertiary education system and can’t get jobs. That’s the killer for us. We’re seeing a lot of talent just vanish.”

Using the bipartisan support of a Senate inquiry into the future of the video game development industry in 2015, the GDAA will soon be refocusing its efforts on the federal level.

“We’ll be focusing quite heavily on federal activity,” Mr Reed said. “We have seen this growth and extraordinary success around the world – it’s rare that an Australian-made game isn’t in the top 10 on all the stores.

“This is money coming into the country – developers make money and they get taxed on it.”

But the recent revolving door of Innovation Ministers we’ve seen on a federal level has meant that the organisation has had to mostly centre its activities on education.

“We do feel like we have to teach people why games are important,” Mr Reed said.

“The days when we had half the Senate playing Fruit Ninja are gone, now we need to be back in there making them play Crossy Road.”

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