Currently, a bill still in its early stages geared to provide subsidies for film studios that set up shop in the state includes similar support for game development. Game developers in Massachusetts would be able to claim tax credits for 20 percent of the cost of establishing a facility, if they invest at least $US 500,000 of their own money – the same initiative recently signed into law in Georgia.

With 1,000 video game industry employees, Massachusetts ranks fifth in the country behind California, Washington, Texas and New York as far as how many developers are employed in the industry there, according to the ESA. Turbine, Blue Fang Games and Harmonix are all headquartered in the state.

It remains unclear whether the bill will achieve final approval, but a legislative committee recently passed it by a narrow 5-4 margin.

Turbine CFO Peter Faubert talked to the Globe about how the tax credit might help the company expand:

Peter Faubert, Turbine’s chief financial officer, said film-style tax credits could be a boon for video game companies. He said Turbine, which has been growing rapidly and recently raised $US 40 million in venture capital, is searching for a larger headquarters in the Boston area. The company has 300 employees, but plans to hire as many as 100 more by the end of 2009 and requires additional space.

Faubert said some towns have already mentioned the possibility of offering Turbine property tax incentives, though they probably won’t be large enough to affect the company’s decision on where to site its headquarters.

“We’re trying to make our plans based on our business today, rather than a tax incentive”, he said. But Faubert said tax credits could help the business expand further.

Game makers may get a break [Boston Globe via Develop]

The GDAA has been very active of late, its most recent move an alliance with the Interactive Entertainment Association of Australia on the issues of classification and tax consessions.

But that’s not all the organisation has been up to, so I threw a few questions Crago’s way. He was more than happy to fill in the blanks, and on a few occasions, colour the blanks with green and pink highlighter.Kotaku AU: Greg Bondar recently resigned as CEO of the GDAA. Who is currently handling CEO responsibilities, and when do you believe a permanent replacement will be found for the position?
Tom Crago: For the past few months we’ve had Mike McNabb on board in a full time capacity as COO. Mike has absorbed all of the CEO’s responsibilities, and of course the Board is working a little harder to ensure that the GDAA is flying the flag for the local industry. We will look at appointing a CEO later this year or early next year.

Kotaku AU: Is Game Connect still full steam ahead? Can you tell us what the GDAA has planned for the event?
Tom Crago: Absolutely full steam ahead. There are some details up on the site at present (www.gameconnectap.com) with more to be announced soon. Primarily, this event is about bringing the local development community together. We also try to bring in a number of international speakers to talk about their experiences working on big titles. Another component is the annual GDAA Awards, which recognise the best and brightest from the Australian industry.

Kotaku AU: How will Game Connect 08 improve on last year’s event?
Tom Crago: Naturally we’re hoping to make it bigger and better (as opposed to worse and smaller). I guess the key areas here are the speakers, in terms of both depth and quality. More details will be revealed in the next couple of months. We’re calling for abstracts at present, in fact, and anyone interested should hit the website.

Kotaku AU: What are the GDAA’s priorities at the moment?
Tom Crago: We have six key priorities:
• Promoting the Australian game development industry here and overseas
• Running our national developer conference, Game Connect: Asia Pacific
• Lobbying Federal and State Governments for a better deal for our industry
• Addressing the skills shortage by working with industry and educational institutions
• Providing a voice for our industry in the local and international media
• Arranging for participation and representation at international trade shows

Kotaku AU: What has the GDAA achieved in the last 12 months?
Tom Crago: I’d like to think we’ve kicked a couple of goals in each of those key strategic areas. Obviously the push for a better deal from the Federal Government has been a big priority, and we’ve seen some steady progress there. We also ran a very successful event at GDC in San Francisco. It really is the case that, internationally, Australian game developers are held in higher regard than ever before. That’s a good indication that the GDAA is functioning well as the peak industry body.

Kotaku AU: What avenues do developers have to communicate with the GDAA? What issues does the organisation help with on a day-to-day basis?
Tom Crago: Any member of the GDAA can call me any day of the week! We field a whole range of enquiries, and try to offer help and support both to developers, and to people outside the industry. In a typical week we will be contacted by media outlets, government, and educational institutions, in addition to game developers. There’s a lot of interest in video games. We try to put up a wide array of relevant information on our website, which is a pretty good first port of call.

Kotaku AU: We recently heard that the IEAA and GDAA are working together on both tax and classification issues. How is the GDAA assisting the IEAA with classification, and the IEAA helping the GDAA with tax concessions?
Tom Crago: We’re really glad to be working with the IEAA on a bunch of issues that impact upon both developers and publishers. They support our call for the extension of the tax offset, and we’re right behind their push for an overhaul of the classification system. Of course, we’re both on the same page in terms of stamping out piracy.

Kotaku AU: What progress has been made on the tax concession front? Do you believe we’ll see something put into effect before the end of the year?
Tom Crago: Our goal is to make it into the next budget. We’re sitting down with Government in August to take the next steps towards that goal. There is still a long way to go, but we’re hopeful common sense will prevail, and that video games will take its place alongside film and television as a legitimate screen art.

Kotaku AU: What barriers have prevented the industry from receiving financial support from the government?
Tom Crago: Well it’s fair to say the previous government didn’t have a lot of time for video games. I don’t think they recognised just how many Australians were playing games, and just how mainstream an activity it had become. It seemed a fairly antiquated mentality, which is something we come up against a lot. I see a lot of jaws drop when I tell people that nearly 80% of Australian households have a device for playing games, and that the average age of Australian gamers is 28. And that’s before you tell them that 41% of gamers are female. Gradually, these barriers are being broken down, and I’m hopeful the new Government will have a more up to date perspective. We have our fingers crossed.

Kotaku AU: Are there any issues facing the games industry in Australia at present that you feel haven’t received enough attention, such as employment opportunities, skill demand, etc?
Tom Crago: The skills shortage is the big one. All the major companies are looking for people, and we’re just not finding enough of them in Australia. I’m really hoping that will change. The strong Australian dollar is also a curse for us, as an entirely export-focussed industry. Of course, a near total lack of support from the Federal Government is a factor, but we’re doing what we can to address that. The games business is also intensely competitive and hit driven. To that end, the biggest challenge we all face is ensuring we continue to make games that sell well and that meet the quality standards that gamers demand.

Kotaku AU: Do you have any advice for games developers in Australia? For example, what they should be thinking about in the next 12 months?
Tom Crago: I think all our developers are big and bad enough not to need to take advice from me ;) In terms of general trends, though… who knows? Will the Wii continue to dominate, or will it be Sony’s Xmas? Will mobile finally hit its stride, and what will happen more generally in the handheld space? What about the rise of so called ‘casual games’? So many possibilities, which of course is one of the cool things about being in such a dynamic industry.

Jason Hill of Screenplay managed to get in contact with AL’s CEO Zareh Nalbandian to find out exactly what motivated the company to go with LA over Melbourne or Brisbane:

“We felt that there was a rich pool of talent … that we have more options in Los Angeles at this point of time than we have elsewhere.”

Options and talent? Sure, those are important factors, but I find it hard to believe that tax breaks had nothing to do with it.Nalbandian also clarified how ALI will function as a business:

“We’re actually pursuing the games business from the point of view of being a creative production company in the same way that we work in film. We aim to start with a core of around five to 10 people and within that paradigm of being key creatives, key technical leadership and key production heads so that we can drive the creative and technical production enterprise, but not necessarily try to do everything else ourselves.”

The article goes on to quiz GDAA president Tom Crago about the development, and the general state of the industry. Well worth a read.

The Logic behind tax breaks [Screenplay, via Sumea]

It seems the Game Developers Association of Australia and the Interactive Entertainment Association of Australia want to make sure our current government continues to investigate the issue and as such, the two organisations have joined forces.

Said Tom Crago, Tantalus CEO and GDAA president:

“Australian game developers cannot be expected to be internationally competitive when global market conditions are ‘not level’. We owe it to the companies themselves to offer these incentives and we also need to make an investment into Australia’s ’smart economy’.”

We know how awesome tax rebates have been for game developers in other countries, so there are no problems as far as logic is concerned. The government just needs to get its act together.

Full release after the jump.

THE GDAA and IEAA CALL FOR TAX INCENTIVES FOR GAMES DEVELOPERS

MELBOURNE, June 12, 2008 – The Games Development Association of Australia (GDAA) and the Interactive Entertainment Association of Australia (IEAA) have today announced an alliance to urge the Australian government to offer tax incentives for the local interactive entertainment industry. The GDAA and the IEAA have also aligned to support intellectual property protection and the introduction of an R18+ classification for video games.

According to Tom Crago, President of the GDAA, the local games development community produce world-class games and have worked hard to create a community of innovation and excellence and deserved the support of the Australian government.

The Australian games development community employs over 1400 people and in 2007 generated a total income of $136.9 million.

According to Crago, tax incentives have been deployed in Canada, France and elsewhere in the world, and have been shown to assist local industry to develop its potential. “There are over 300 companies in the video game industry in Canada employing over 8000 people. The growth of the Canadian industry has been in no small part thanks to Government support,” he said.

“Australian game developers cannot be expected to be internationally competitive when global market conditions are ‘not level’. We owe it to the companies themselves to offer these incentives and we also need to make an investment into Australia’s ’smart economy’.”

Ron Curry, CEO of the IEAA says that the popularity of video games rivals, and in many cases surpasses, releases of popular books and film. “Interactive entertainment is a huge, mainstream business and like our home grown film and television industry, it’s vital that our local games developers are given the best chance to be competitive on the world stage.”

GDAA and IEAA will be holding joint discussions and industry round tables to highlight the importance of government support of local innovation for interactive entertainment.

Greg Bondar, CEO of the GDAA said that “the joint GDAA and IEAA campaign will be called “Game-On’ to coincide with the GDAA’s Asia Pacific GCAP conference to be held in November in Brisbane.”

The other industry issues the GDAA and the IEAA will work closely on include the need for an R18+ classification for video games and strategic reforms to address the problem of games piracy.

While there’s a lot of interesting info in the report, I found the opening paragraphs the most poignant:

At end June 2007, there were 45 businesses in Australia involved in the provision of digital game development services. These businesses employed over 1,400 people and generated a total income of $136.9m which represented an average of $3m per business.

Sadly, these numbers contrast poorly with the industry’s expenses:

Total expenses incurred for the same period were $128.5m. Almost two-thirds of this amount was attributable to labour costs ($83.8m).

Two-thirds in labour costs? If this doesn’t stick a massive flashing sign on just how much a 40% tax rebate is needed, I don’t know what will.

Hit the jump for a press release from the Game Developers Association of Australia, which includes a few words from president Tom Crago.

GDAA Welcomes ABS Data on Games Industry
OVER $136 MILLION IN INCOME FOR AUSTRALIA’S DIGITAL GAME DEVELOPERS: ABS (FED)

MELBOURNE – Thursday 10 April, 2008 – The GDAA welcomes the Australian Bureau of Statistics (ABS) data on the Games Industry in Australia – see: http://www.abs.gov.au/AUSSTATS/abs@.nsf/mf/8515.0?OpenDocument

” The Australian game development industry is growing at a rapid rate,” said Tom Crago, President of the GDAA. “We’re seeing year-on-year increases of around 15%, which emphasises both the strength and potential of the industry here in Australia. In an environment where many other industries are contracting, Australian game development is going from strength to strength.”

Games developed for console formats (e.g. PS2, PS3, Xbox, Wii) accounted for nearly three-quarters (71.1% or $83.2 million) of game development services income. Games developed for PC and Mac formats accounted for 14.6% ($17.1 million). Two states – Queensland and Victoria – accounted for the majority of game development income (40.4% and 33.2% respectively) and employment (48.6% and 33%).

CEO of the Game Developers’ Association of Australia (GDAA) Greg Bondar said whilst the data highlights the fact that the game industry is a hugely successful export earner, it should be noted that the data understates the value and size of the industry somewhat, in that it does not include companies that are ancillary to the industry such as art production houses, and audio providers.

About the Game Developers Association of Australia:
The Game Developers’ Association of Australia (GDAA) was established in December 1999. Today, the association comprises corporate members from game development companies and educational institutions, associate corporate members (in service sectors that support the industry), individuals and students.

The main purpose of the GDAA is to increase the profile of the Australian electronic games industry both domestically and internationally in order to:

• Promote the growth of the game industry in Australia
• Represent the interests of GDAA members
• Attract capital and publishers from offshore and increase local investment
• Retain and attract the talent that exists in the local industry
• Promote a sense of community within the industry

Stats and facts about the games industry:
• The Australian games industry is worth an estimated $140 million per year
• Australians spend over A$2 million per day on interactive computer games
• Total sales in 2006 for the industry was $1 billion
• Annual compound growth of the industry is 12.3%
• 12.5m games were sold in 2006
• 6.1m video game consoles have been sold since 2000
• 3.6m Australian households have a video game console
• 4.8million Australian households have an internet enabled PC which is capable of playing games
• The average age of gamers is 28 years
• 60%of gamers are male and 40% female
• 35% of gamers are parents and 8% are seniors
• Families are an integral part of playing games
• 8,500 Australians are directly employed in the video game industry in 2007

Digital Game Development Services, Australia, 2006-07 [Australian Bureau of Statistics]

“We must be sure that the measure will promote only genuine cultural projects and that it will not have the effect of an industrial policy instrument in favour of the videogames sector.”

EU approves tax breaks for games [GamesIndustry.biz]

This exciting bit of news was announced yesterday, and the Game Developers’ Association of Australia (GDAA) couldn’t be happier.

Said GDAA CEO Greg Bondar:

“The GDAA now looks forward to working with Senator Conroy to progress the establishment of a high level committee to review the GDAA’s call for a 40% tax rebate for the games industry”

Now, let’s pray that this was one of Labor’s core promises.

Full GDAA press release after the jump.

MELBOURNE – Thursday 29 November, 2007 – The GDAA welcomes the appointment of Senator Stephen Conroy as Minister for Communications, Broadband and the Digital Economy.

“More importantly, the positioning of the Communications, Broadband and the Digital Economy portfolio into the Cabinet is an indication that Kevin Rudd’s Labor government is taking the digital content industry seriously” said Greg Bondar, CEO of the Game Developers’ Association of Australia (GDAA).

“The GDAA now looks forward to working with Senator Conroy to progress the establishment of a high level committee to review the GDAA’s call for a 40% tax rebate for the games industry” added Bondar.

Weeks before the election Senator Conroy met with representatives from the Game Developers’ Association of Australia and CEOs from some of Australia’s major game development companies to discuss the GDAA’s plea for a 40% rebate to assist the further growth of the local games industry.

-ends-