A once burgeoning sector, the video games development industry has suffered harsh decline in recent years with international competitors poaching talent, while Abbot’s Government closed the $20 million Australian Interactive Games Fund, just 12 months after it was established.
So much so that a Senate Inquiry, backed by Scott Ludlam, into the future of the industry is closing to submissions on Friday September 18.
Despite the apparent doom and gloom, Australian company Black Delta, a predominantly simulator focused games developer, secured private equity funding in January of this year, which has enabled the studio to grow from just two employees to 14 in a little over six months, while setting it up to take on the international market.
There is a combined total of 70 years’ development experience within the Melbournian team.
The launch of KartKraft, an Oculus-Rift-supported kart racing game, in Germany in August saw twenty thousand ‘buy’ votes amassed in just six days, on Steam’s Greenlight platform. Steam being the online games go-to social network. The Greenlight platform allows developers to test their concept directly with the market and if enough votes are recorded, parent-company Valve Corporation will work to bring the game to the digital marketplace. Not surprisingly KartKraft has enough votes and will launch later this year.
But like all high-growth companies, rapid evolution hasn’t come without its challenges and Founder Zach Griffin says nurturing talent is an industry issue that needs to be addressed.
I sat down to talk to Mr Griffin about the journey so far and the plans to expand.
Tell me a little bit about Black Delta and the story so far?
Zach Griffin: Sure, so Black Delta was started by myself a couple of years ago, producing a game prototype and doing some automated simulation work. About July last year, we began talking with a number of investors and then we won a local venture capital competition called the Big Pitch here in Melbourne.
The deal fell through with them, but with assistance we went on to raise private equity which we finalised in January this year. Since January, the company has grown from myself and my business partner (Tigran Aganesov) to 14 full time in house staff, and then various contractors, that we use for outsourcing around the globe.
The company is pretty well known in the gaming development industry. So do you still refer to yourselves as a startup?
Zach Griffin: We’re certainly a start-up in terms of the time from January [‘s funding injection] to now, it has only been nine months.
However due to the growth, moving to 14 people so quickly, we’ve had to implement processes you’d usually see in a more established businesses. And we like to model ourselves on big successful corporate organisations, looking at models that Google have had for example, and in particular companies like Atlassian who have had that high-growth.
So we certainly wouldn’t call ourselves a startup in terms of the experience that we’ve got, the experience of our talent, our developers and our key personnel here in the studio.
What do you see as the biggest challenges with getting to this stage, post-funding?
Zach Griffin: I think the climate in Australia regarding private equity and funding is not as mature as it needs to be, particularly if you contrast it with Silicon Valley, areas like Boston and America in general, and even tech-hubs like Singapore. Australia’s got a long way to go.
You can start to see some chips in the thinking, innovation hubs being established for example, and I think that’s certainly helping. But we’re still a long way off the kind of thing Singapore and America have, and that’s not just in terms of traditional funding either.
Outside of funding, the next stage is acquisition of talent, and actually getting people who are experienced, particularly within the games industry here in Melbourne and Australia.
We certainly have the talent, but we don’t have the combination of talent with the experience required. Outside of the core development areas of programming and art, the business and publishing talents just doesn’t exist here in Australia. And if they do, they have been poached offshore.
Of course. One of the key recommendations made by the Interactive Games and Entertainment Association (IGEA), in their submission to the Senate Inquiry ahead of this weeks’ closing date, is to develop and retain cutting-edge developer talent in Australia. So how are Black Delta sourcing and retaining talent right now, to ensure those experienced developers are kept in Australia into the future?
Zach Griffin: We’ve been lucky enough so far to find exceptional talent who have had experience with simulation, as well as virtual reality. We’ve taken it on board ourselves to provide the climate in which we can foster talent and grow talent here, taking someone as a fresh graduate, and putting them through a really intense paid internship to develop those skills.
It requires us to invest in them earlier on and divert those [recruitment] funds to develop talent in-house, as opposed to in America say, where you can go and get someone who is a lot more experienced, who has had a better education and who is really at a higher level. But that’s not to say we’d chose that person over what we have here in Australia.
It’s something that needs to be addressed as an industry though. We need to raise the profile of game development as a career here in Australia. We need to get the education system working correctly to funnel graduates that are ready for development and build that talent within Australia so that we can have a stronger organisation that produces stronger products that then will allow the eco-system to thrive and self-perpetuate.
But at the moment with all these triple-A companies outside of Australia, our talent goes overseas and it’s difficult.
So, I guess you’ll be hoping for some positive outcomes from the Senate Inquiry. What sort of things would you like to see coming out of Canberra in the next year?
Zach Griffin: I’d certainly like to see plans for incubators that are geared towards fostering industry veterans that have produced prototypes, allowing them to take those prototypes all the way through to a finished product, providing an environment for that – whether its assistance for companies that take on more people, wage incentives, tax breaks for staff in the sector.
So what are Black Delta’s plans to grow further at this point?
Zach Griffin: Well our market has always been international – releasing our racing game KartKraft this year, and with the weak Australian dollar, it’s good to be receiving income in American dollars.
So in terms of our growth, we’re really looking to establish ourselves in the gaming industry and to continually invest in our own IP, and also into other areas in simulation and virtual reality. Black Delta has an extremely strong skill set from working with some of the top studios here in Australia.
But we’ve also got unique skill sets in simulation, so we have capabilities to produce simulations for aeronautical, automotive and military applications and this is where we see the real key driver for us. So we’re really investing in talent right now to harness these areas in particular.