Still Standing: How The Australian Games Industry Is Moving Forward

Post the closure of THQ’s local studios, the Australian Games Industry is reeling, but there are those who staunchly believe it can recover. We spoke to GDAA CEO Tony Reed, and the heads of Firemint and SEGA Studios Australia to discuss the impact of the closures, and the ways in which our local games industry can evolve in the future.

“It was very sad, I know a lot of the guys at Blue Tongue, and trying to find positives in this situation is difficult — it’s really just a negative thing.”

We’re talking to Rob Murray, CEO of Firemint. As his studio readies itself for the release of new IP Spy Mouse, riding high on the success of mobile titles such as Flight Control and Real Racing, he is keenly aware of the widespread effect the closure of major studios such as THQ Australia and Blue Tongue can have on local industry.

“I felt a great deal of sadness and concern for all those people,” he continues. “It’s easy to tell them to go out and start an indie or something, but that’s inviting people to start a business, it’s not much comfort to someone with a family and kids.

“I hope all the talent from both those studios find a way to, you know, use their skills in the industry and stay connected somehow, because I really feel that the Australian games industry has a great future ahead of it.”

In the wake of the THQ closures, it is difficult to find positives. An abnormally strong Australian dollar combined with dropping share prices have seen major publishers eager to consolidate. The industry is growing, but in spurts — spurts that are becoming increasingly difficult to predict as the market continues to splinter, developing in multiple areas simultaneously.

Blue Tongue’s closure in particular — a small studio committed to making innovative, relatively cheap console games — was difficult to predict.

“Did I see it coming?” Asks Marcus Fielding. “You know, I probably didn’t see it coming. But the more I read about the share price and the difficulties with the dollar — difficulties that we too face — maybe it isn’t a surprise. Maybe the writing was on the wall.”

Marcus Fielding is the director of the newly rebranded SEGA Studios Australia, and he understands the pressures that come with being an Australian studio reliant on overseas publishers for security. He was among those made redundant when Krome closed and is now tasked with steering a new studio through some of most difficult circumstances the Australian games industry has ever faced.

“My reaction is disappointment, I was quite saddened,” says Fielding. “I have friends there. I know what it’s like to be an international recruit and be told you have 28 days to leave the country.

“And it’s sad for the industry — it’s good to have competition that size around the corner. It’s good for talent growth, recruitment, so it’s really disappointing on that level as well.”

In the wake of such closures it’s tempting to endless discuss the whys and wherefores, but for Tony Reed, CEO of the Game Developers Association of Australia, the immediate task at hand is stimulating the growth of the local games industry to ensure closures of this kind can be avoided in the future.

But was the closure of Blue Tongue and THQ unavoidable?

“THQ has been reviewing its strategic direction for quite some time now and an unfortunate consequence of the decisions made in the US was the closure of the Australian studios,” says Tony. “It’s difficult to know whether anything could have been done to prevent the closure without an insight into THQ’s plans. It’s certainly a possibility that we could have presented options to prevent the closures, but without knowing all the motivations for the decision that’s pure conjecture.”

It appears the strength of the Australian dollar, in the current economic climate, was almost too difficult to bear.

“I couldn’t really speculate on THQ’s reasoning,” begins Firemint’s Rob Murray, “but they’re not necessarily in the strongest position. It’s the dollar — it’s high, and it’s moved high really quickly.”

Tony Reed agrees.

“The strength of the Aussie dollar has been a contributing factor,” he says, “as is the fact we have no supportive government programs in place to compete with other development territories, but we can’t dismiss the fact that the industry is still changing and many companies are slowly coming to terms with the opportunities that now exist.”

As a publisher-owned studio working on pre-existing IP — the upcoming Olympics Game — these are challenges that Marcus Fielding and SEGA Studios Australia are currently attempting to manage — but for now, as a studio, the focus is squarely on the product.

“I think in the bigger picture the dollar can affect us, but as a company we are really focused on the game,” claims Marcus. “I’ve seen headcounts increase here, so it hasn’t really affected us. I think in terms of longer term growth we do have to be cautious, but in all honesty it hasn’t affected us yet.”

Rob Murray from Firemint, despite his company’s recent acquisition by EA, is confident, but as a proven developer in a rapidly growing mobile market, you get the sense that he has every right to be.

“I feel very fortunate that we own our own IP here,” says Rob. “It’s a strong position to be in.

“We were a very successful company before acquisition and we’re a very successful company now. As I said, there would be more risk of me having wind the company down that EA doing it. We’re a long way from any risk there.”

A strong Australian dollar has many positives for the Australian economy in general, but both Tony Reed and Marcus Fielding of SEGA are discussions at various levels of the Australian government to make sure that the future of the local games industry is secure. The R&D offset is a great start, allowing developers the opportunity to write off much of the cost involved in early prototyping, but Tony Reed is looking for more — he wants to make Australia a global centre for games development. But for now, he’s coy on the specific details.

“The government initiatives [up until now]haven’t been purely games related, but they have definitely considered the needs of the industry in the development of new incentives, such as the R&D Tax Credit.

“The Federal Government has been very receptive to learning more about the industry and there’s unfortunately a fair bit I can’t talk about, but I can say there has been a significant perception shift of the games industry and plans are afoot.”

Marcus Fielding is another industry figure petitioning for more government assistance.

“We’re arranging very high end meetings with the government and we’re very hopeful they will take us seriously,” he says.

“It’s time to make a change. We all know what’s happening in Canada — I worked with the EA Montreal studio for six years and saw first-hand the benefits of what they’re doing over there. Why can’t Australia do the same? That’s the question we’ll be asking. We’ll be showing them the talent we have here and asking — can you help us?”

Rob Murray sees things a little differently. Whilst he’s receptive to any outside help the government can provide, it’s not really a priority for him or Firemint as a studio — the focus for Rob is the development of local talent.

“I see a strong future for the Australian Games Industry, but I don’t think it’s dependent on the R&D offset tax, although everything everyone does to promote the industry helps,” says Rob. “It’s about the skills and creativity here in Australia. As long as we have those skills and people taking risks and moving forward, we’ve got a good future.”

But in addition to high end meetings with the Australian Government, SEGA Studios Australia is also committed to growing the endless stream of development talent that exists in Australia — even if the amount of applications they receive on a daily basis verges on the overwhelming.

SEGA Studios’ newly installed Director of Studio Marketing Gareth Gower believes that as one of Australia’s last remaining ‘major’ studios, they have an obligation to help develop and grow the local industry — albeit with a level of sensible restraint.

“As one of the largest studios, and being owned by a big publisher, we do feel a responsibility to help the gaming community in Brisbane and Australia,” claims Gareth. “And we’re already in discussions with the government about assistance and incentives on behalf of the wider community. We’re doing a lot of things like internships. We want to work closely with those guys and harness the local talent in addition to those from overseas.

“We really do take the responsibility to lead the industry seriously. We want to see it thriving again.”

This enthusiasm, however, is tempered with the financial realities of the current climate. No single studio could ever hope to accommodate the incredible amount of graduates streaming out of the numerous different game design courses scattered throughout the country.

“There’s clearly too much supply, and especially now,” says Marcus Fielding. “I think that we have to take small steps, to make sure we take the right interns and see how that goes. We just have so many CVs coming in; we have so many requests from the colleges. We just have to do things slowly and properly.”

Tony Reed, however, is far more optimistic. He believes that a new golden period of Australian games development could be imminent.

“It’s true we’ve seen studios close, but we’re also seeing more studios open, created by some very talented and experienced people,” he claims. “The foundations are in place for a substantial industry in the future. With incentives to invest in the industry we could quite easily become a dominant territory in a reasonably short period of time, and the work is already underway to provide that stimulus.”

In short — if you want to create video games for a living, you should pursue that goal, with gusto.

“In the medium to long term I think there will be plenty of opportunities for young Australians,” continues Reed. “I should also mention that there’s nothing to stop people keen to try game development. There are many game development resources available for free and it’s simply a case of finding like minded people in a classroom or circle of friends.”

Despite some reservations, Marcus Fielding remains motivated and enthusiastic about the future of the Australian games industry.

“I’m optimistic, but that optimism gets derailed when you see studios closing,” he says. “But still, I wake up feeling optimistic. I work alongside the best talent in the industry and I’m recruiting the best talent around the world — that’s why. I see the game development processes we’re implementing, we’re innovating.

“It’s exciting. I’m optimistic.”


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