Denham Sadler
March 14, 2018

Boom: Canada’s games sector

Policy

Boom: Canada’s games sector

Jayson Hilchie: Targeted support can make a huge impact

A range of new policies and incentives is required if Australia wants to follow in Canada’s footsteps and develop a world-leading games development industry, according to Entertainment Software Association of Canada chief executive Jayson Hilchie.

Visiting Australia as a guest of the Interactive Games and Entertainment Association last week, Mr Hilchie said the rapid rise of the game development sector in Canada was thanks to government support packages. This could be replicated in Australia.

“It’s definitely possible, Australia needs to put the right environment in place for companies to want to build and invest here. There is a lot of opportunity,” Mr Hilchie told InnovationAus.com.

“If you want to build an innovative economy based on young, highly skilled and paid people, I can’t think of a better industry to support than the video game industry,” he said.

“Look at the example we have in Canada: we built a nascent industry from 1000 people into a world-leader with 22,000 full-time employees in a country with 35 million people.”

Canada’s game development industry has grown to become the third largest in the world over the past two decades, and is the biggest in the world per capita.

It is home to 600 studios employing 22,000 people, and contributing $3.7 billion to Canada’s GDP.

In contrast, the Australian game development sector employs fewer than 1000 people in full-time jobs, and generated a modest $118.7 million during the last financial year.

According to Mr Hilchie, the growth and success of the sector in Canada has been due largely to a range of targeted support measures, including tax breaks, a large investment fund, and skilled immigration policies.

Canada was the first country in the world to extend the same tax breaks on offer to the film industry to the games development industry, and this was something that the Australian government should consider adopting, Mr Hilchie said.

“Australia could institute a refundable tax credit just as easily as Canada did. The incentives certainly are the number one reason why the Canadian video game industry has grown to the size it has,” he said.

The Canadian federal government also launched a $40 million fund for innovative IP development. In contrast, there is currently no federal support on offer to Australian game developers following the axing of the $20 million games development fund in 2014.

Mr Hilchie said that the Australian government also needs to implement and encourage skilled immigration to help the local sector plug the skills and talent gap that currently exists.

“There needs to be a focus on highly skilled immigration to make sure that the people that are going to drive the innovation can come here."

“It’s not taking jobs from Australians. From our experience in Canada, we had mighty holes that needed to be filled – there just weren’t enough people,” he said.

“We spent years lobbying the government to create a high-skilled fast-tracked immigration policy and last year we got it. So far it has been a huge success, we can now find the skills to fill the gaps, and there are great hopes that the industry will skyrocket.

“The talent is just as important as the incentives. You can have all the incentives in the world but if you can’t find the people it won’t work.”

During his visit to Australia, Mr Hilchie took part in federal Labor’s roundtable on games development, and discussed many of these potential policies with shadow communications minister Michelle Rowland.

Labor is currently formulating its own policy package to address the games development sector, but is yet to reveal which of the proposed initiatives it will be pursuing. The Greens also recently “laid down the gauntlet” on the issue with a $100 million commitment to the games development sector as part of the Batman by-election in Melbourne.

The commitment included a revamped games development fund, an extension of the film industry tax breaks and funding for co-working spaces.

Mr Hilchie said the sector was potentially lucrative for the Australian economy, and perfectly fitted for a focus on innovation and technology.

“It’s an industry that has been born from a global economy. Its natural resource is talent, it doesn’t need to be based near an oil deposit and it goes where the talent is and where the business environment is most favourable for it,” he said.

“If you want to build an innovative economy based on young, highly skilled and paid people, I can’t think of a better industry to support than the video games industry.”

“And it sits at the epicentre of the innovation ecosystem, driving things like artificial intelligence, virtual reality and healthcare.”

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