Game Over: Australia Is Missing Out On The Multi-Billion Dollar Video Game Industry
“Press Play On Tape”.
The first time I saw that beautiful blue-in-blue digital typeface displayed by a Commodore ’64 on my television, I knew I was hooked on video games for life. Over the years I’ve run everything from a Tandy Colour Computer II to a PS4 and PC gaming monster.
There’s something about the art of video games that engages the mind and emotions more completely than any other creative industry. And the proof is in the worldwide success of video game development.
First-person shooter mobile device game, Call of Duty: Mobile smashed records following its recent launch, racking up more than 100 million downloads the first week. The free-to-download juggernaut earned developers Activision $17.4 million from in-game transactions within the first 10 days.
But the success of Call of Duty: Mobile pales in comparison to The Witcher 3: Wild Hunt, which catapulted Polish developers CD Projekt into the 13th largest corporation listed on the Polish stock exchange with revenue of over AUD $166 million in 2017 alone.
Unfortunately, the Australian economy has lagged behind the rest of the world in capitalising on the opportunities video game development presents, with successive governments neglecting to foster a healthy domestic game development industry.
Canada, for example, puts Australia to shame when it comes to the development of a vibrant and economically progressive video game development industry.
According to a recent submission to the federal government by the Interactive Games and Entertainment Association (IGEA), Australian game developers achieved revenues of AUD $118.5 million and employed 928 workers in 2018. By contrast, Canadian game developers generated AUD $3.5 billion in revenue with 21,700 employees in the same year. Even the game development industry in New Zealand outstripped revenues from Aussie developers, bringing in $135 million in 2018.
The opportunities are rife if the Australian Government were to implement incentives to help grow the domestic game development industry.
According to the IGEA, there are roughly 2.2 billion video gamers across the globe, with about half located in our own backyard: the Asia-Pacific. The industry body also highlighted that globally, video gaming was worth $200 billion in 2018.
Australians spent more than $4 billion on video games and gaming hardware in 2018, more than on films, streaming services, pay TV, music and books. The research also showed that two out of three Australians played video games in 2018; almost three out of four Australian game players were adults; and games were played by men and women roughly evenly.
There have been some domestic success stories when it comes to video game development. The Brisbane developed Fruit Ninja has been played by over one billion players, while Crossy Road out of Victoria has been played by more than 200 million users.
However, examples of Australian success stories are few and far between.
An essential first step in developing a dynamic game development sector is to provide the same tax incentives that game developers in other countries receive and which are also available to other creative industries in Australia.
Most nations with a well-developed and economically viable video game industry provide some form of tax-offset of between 25 and 40 percent. In Australia, the creative production industries of film and television receive a tax offset of 40 and 20 percent respectively, with 30 percent provided for post-production -- all run through Screen Australia and the Department of Communications and the Arts.
If the same tax and funding incentives were offered to the video game development industry, it would provide the opportunity for small studios to develop into large studios, as well as attract international investment from major global players.
This strategy has proven successful for our commercial film sector, attracting the development of blockbusters like Mad Max: Fury Road, Alien: Covenant and most recently the next instalment of the Thor franchise.
With manufacturing relegated to a dying industry by many commentators, our farming industry in the grip of a national drought and mining battling the combined forces of activists and government red tape, it’s perhaps time the Australian government looked to new industries like video game development to help with some of the economic heavy lifting.