The Federal Budget Missed A Massive Opportunity To Support Local Video Game Development

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The Federal Budget Missed A Massive Opportunity To Support Local Video Game Development

Despite the historical success of the Australian Interactive Games Fund and the continued success of state-backed development, and lobbying from within their own party, the Federal Budget was another squandered opportunity to support one of the country’s most burgeoning and COVID-resistant industries: the local video game sector.

The 2020 Budget was one of the biggest and most consequential in modern times, given the impact of the coronavirus and its throttling of national growth. The inability to trade, or survive, has forced governments worldwide to change their approaches towards supporting small and medium-sized businesses. So there was hope that the Federal Government might be more forthcoming to the screen industries this time around, particularly given the lack of support in the most recent entertainment package.

But despite a budget that included $10 million for internet access on a train line, funds to roll out biometric verification for MyGov, $6.9 million to support “industry-led pilots” for blockchain technology, around $50 million to help businesses affected by the downturn in conventions and trade shows, $15.5 million for COVID-safe Australia Day events next year, a $1.3 billion package to support long-term manufacturing projects and helping research become commercially viable, the government couldn’t find any money — none at all — to re-establish one of the most successful screen industry ventures of the last decade. Even potential programs that could assist game development, like a wage subsidy program for new trainees and apprentices, isn’t applicable to local video game development.

Understandably, the local video game industry — and those closest to the sector — had a few choice words.


Angharad Yeo, host of ABC’s Good Game: Spawn Point

Image: Supplied

Australia’s video game industry has long been left behind when it comes to government support, which can be frustrating because it feels like it should be a no-brainer. It’s a $200 billion industry that outstrips music and film, but is undervalued as a growth area.

We have the talent, the ideas, and the hunger, but making games is a long and expensive process that could greatly benefit from this support. It seems a great shame not to invest in Australia’s standing in this highly lucrative industry which intersects cutting edge technology with creative products in a way no other medium does. It’s hard not to see it as a disservice to the future of Australia’s economy and cultural output.


Interactive Games & Entertainment Association (IGEA)

Image: Untitled Goose Game

We, alongside our members and friends in the Australian video games sector, were hoping that the Australian Government would use last night’s Budget to finally recognise the profound impact that supporting Australian game development would have on our country’s export growth, global inward investment, digitalisation of the workforce, and cultural output.

With so much talk from government around forging a path to economic recovery and supporting high growth potential sectors, we strongly believed games would finally be provided a much-deserved seat at the table.  Unfortunately, this did not happen.

Despite the Government recently announcing a range of screen policy reforms, including significantly increasing its funding of film and TV production and equalising the Producer Offset for film and TV at 30%, video game developers remain locked out of all federal screen funding and tax incentives, even though we create screen content.

In fact, of the roughly $1 billion that the Australian Government will be providing Australia’s creative and cultural sector this year, pretty much none of this is available to game developers. This means that despite video games being the most valuable and fastest-growing creative industry in the world, it remains the least supported creative industry in Australia. This is why our game development industry, despite its resilience and ability to punch above its weight, is less than even a tenth of the size of the same industries in the UK or Canada, which together employ tens of thousands and generates billions in exports annually.

So where do we go from here?

While we are disappointed that there were no announcements last night, we know the Government’s policies are not just made during Budget.  And we are absolutely confident that the Government will eventually see the light, because while it may not always seem like it, there are many supporters of our industry within their ranks.

They include Parliamentarians like the LNP Senator for Queensland James McGrath, who gave a speech to Parliament just last month calling for game production incentives, and all the Government members of the Coalition-chaired Joint Standing Committee on Trade and Investment Growth, which in June handed down a report recommending the Government introduce a game development tax offset. There are also government agencies like Austrade who are unwavering advocates of our industry and are doing everything they can to prevent a future-focussed, high-growth export industry from slipping away.

We also believe that the economic potential of our industry – which Australia needs now more than ever – has been dawning across the Government’s senior decision-makers. Over the past year, we and our members have had many meetings with Government Ministers and senior policy advisors, and despite the lack of policies to date, we are confident of this.

They know Australian game developers are among the most talented and creative in the world.

They know our games businesses create highly skilled full-time jobs, and they were hiring, not firing, during COVID.

They know video games are a well over $200 billion export market, and it exists right here on our digital doorstep.

They know global AAA companies are ready to commit hundreds of millions of dollars, and eventually billions, to build studios here.

And they know our local game developers really need access to existing screen support or would achieve so much more with it.

We remind the Government that supporting game development is not a partisan issue, and we’ve just seen the Liberal South Australian Government double-down on our sector by introducing Australia’s first ever rebate for game development. We also remind the Government that as it has already announced changes to the Australian Screen Production Incentive, which will require amending tax legislation, there is no reason why a further change to accommodate game development cannot also be made.

Support policies weren’t created in the UK and Canada overnight, but eventually they simply could not ignore our industry. We believe that it’s just a matter of time until this happens in Australia. And until then, we will continue to fight for our industry’s equitable access to screen funding and incentives.


Ashley Ringrose, SMG Studio Founder

australian game developer awards
Image: Moving Out

There’s only a few industries that are "COVID proof” and games are one. So yes, very short-sighted and ignorant to what’s happening to not look at supporting industries that have survived in this pandemic and are keen to grow further.

We don’t need billions too. We just need something -- the last fund, which we spawned from was just $10 million which is tiny. It’d be the cheapest good headline the government can buy!

I see potential for game dev via the apprenticeship/trainee hiring scheme where 50% is offset. I feel it’ll encourage more studios to hire juniors, which in tern builds the next generation of seniors. There’s so few junior positions available.


Ron Curry, IGEA CEO

Ron Curry (pictured left). Image: Supplied

To say IGEA is disappointed that games were ignored in the Federal Budget last night is an understatement. Given the much needed focus on economic recovery, a federal tax incentive or a grant provided to the game development industry would have provided an easy solution to the government, having a multiplier effect on jobs and growth.

Both IGEA and other forward thinking international jurisdictions have proven this time and time again. We won’t give up on the path to recognition and we know our members and the industry will keep on producing great content and telling Australian stories for hundreds of millions of consumers around the world to enjoy.


David J Ross, Creative Supervisor/Head Writer, 15BiT Games

Image: Road to Nowhere (15BiT Games)

The arts have been gutted, changes to education will push the industry backward and emergent media has all but been ignored for a decade.

We are flailing, when compared to incentives available to the sector in both Canada and NZ. Luckily, there are plenty of collaborative opportunities overseas that will likely result in revenue circulating back to AU, but our production costs are disappearing offshore. The LNP is no friend of ours.


Tim Watts MP, Shadow Assistant Minister for Communications, Assistant Minister for Cyber Security

Image: Twitter

The Liberals have been ignoring the video game industry since they were elected in 2013 so the lack of support in the Budget is no surprise, but it is a missed opportunity. Labor sees the creative economy, including video games, as a key priority for job creation. This is even more important as we enter the first recession in nearly three decades.


We're likely to hear more on this topic from federal politicians later today. The Shadow Assistant Minister for Communications and Cyber Security, Tim Watts, is giving a talk this afternoon as part of Game Asia-Connect Pacific (GCAP) alongside the CEO and MD of IGEA and Koch Media. The Labor MP has been a strong advocate of video games in the past, and I'd expect him to make some remarks on the Coalition's approach.

Funding local video games is one of the easiest wins the Coalition could have had. As pointed out by industry when the fund was originally cut, video games are a weightless export. They bring in a huge amount of export revenue that can help grow the country's taxation base. As the then-director of IGDA Melbourne said at the time, the federal support for the video game sector was "a small amount on the scale of a Federal Budget".

Video games are one of the biggest, most successful and most COVID-resistant entertainment industries in the world. It's a shame that in a time when everyone needs support, the government couldn't see the wisdom in supporting the future.

Comments

  • The government has been actively trying to kill Australia’s arts industry for half a decade now, and they’ve taken advantage of Covid to do as much damage as possible to it, so it’s not surprising that they wouldn’t fund video games at all.

    On the whole, it seems to me that their answer to the complete failure of a half-century of “trickle-down” economics is… more trickle-down economics? These people are morons.

    • Trickle down economics was never, nor is now, a thing.

      Scott Sumner writes about it here:
      https://www.themoneyillusion.com/when-do-the-dems-believe-in-trickle-down/

      This is really old news dude. You may as well be talking about Laplacian evolution or luminiferous aethers. Nobody’s ever advocated for “trickle down economics”; but as Sumner states, some seem unable to fathom that sound fiscal and monteary policy might benefit the common man.

      Now, I have no doubt you’re already typing a furious response with all the wrath of a corrected ideologue but consider reading this first

      https://www.econlib.org/archives/2015/02/have_an_opinion.html

      “Suppose we were talking about string theory instead of macro. Imagine I was debating a string theorist, and I told him the theory was a bunch of worthless nonsense, as it was not refutable. He might respond that I didn’t know what I was talking about. And to be honest I would have to agree with him, I don’t know what I’m talking about in the realm of string theory. And having once read someone who does, who also criticizes the theory for being unfalsifiable, doesn’t change that fact…
      Perhaps because people can immediately recognize that fields like physics and biochemistry are way over their heads, but macro looks deceptively simple. Macro uses a lot of terms like money, saving, interest rates, investment, income, demand, unemployment, inflation, exchange rates, debt, deficits, etc., that seem to correspond to things in our everyday experience. And we obviously do have opinions on things in our everyday experience. And we are entitled to those opinions. But in fact almost none of these terms mean the same thing in macro as in everyday life.”

      And I think when people throw around terms like “trickledown economics” or have a faulty view of our political history (50 years of trickle down? liberalisation began under Keating); its evident that they’re labouring under this almost conspiratorial notion that the Other is some kind of malign influence bent on destroying everything good and true. It’s just not so.

      Further more, you’re commiting an economic fallacy, as is the author. Bastiat covered this over 200 years ago.

      You both are arguing that we should invest in the arts on the ground that it delivers X fiscal return; and that by not doing so, we are sacrificing return of X.

      But that’s only what is seen, not what is unseen. What you’re not seeing is that if a return, or in this case, supporting industries hit hard by Covid19, is the objective– then that money might be better invested elsewhere.

      There’s nothing wrong with the government funding the arts– provided it is for its own sake– because once you start arguing that it should, because, then you’re committing the same fallacy.

      Alex does this slightly differently, by arguing that a COVID19 resistant industry should get additional funding because…? But if the objective is to resucitate the economy, is that where such dollars can deliver the biggest bang for buck?

      This relies on several assumptions, for example, can this industry even absorb that extra capital, can it invest it efficiently, and will there be a demand for this product? Are these projects shovel ready? Is it going to help the most people?

      The answer to all of this ranges from probably no to almost certainly not. The games industry is notoriously underpaid, and its not especially labour intensive. Let’s not even get started on conditions.

      Games are luxury goods. How much demand are there going to be for luxuries when the coronabucks run outs and everyone has to tighten their belt? Especially in this day and age of torrents, free to play and piles of shame? How many of these games are actually going to generate profits, let alone see completion?

      On top of that, if you’re trying to stimulate an economy, why invest in projects that might circulate a little bif of this funding through the economy over 3 – 5 years?

      I mean these are all impressive figures that these industry figures (who frankly want this money) are quoting. But let’s think about the *reality* of where the biggest chunk of this one money comes from?

      Look at EA’s business models for example; most of their revenue basically comes from gambling. Look at the revenue models of free to play and mobile games. That’s before we even go into skinner boxes and the like.

      The way this is presented is that there’s all this great money to build innovative AAA games; but its the same arguments made by RSLs and hoteliers for having pokie machines. I guess, this is kind of the inverse of Bastiat’s previous assertion; the economics look great, but what’s not seen is the terrible cost it inflicts on peoples lives. Now who’s talking about trickle down.

      • Thanks for the essay, dude, but if you haven’t worked out by now that the LNP’s #1 policy is tax cuts for the wealthy then you haven’t been paying attention. You can label it whatever you want, but trickle down works just as well as anything else.

        • Well, no it isn’t.

          You do realise that most people have read the Emperor Has No Clothes right?

          That’s what you just tried to pass off as an argument.

          As for calling it whatever I want, well, I can throw the same argument back at you. Instead of say, supply side economics; maybe I call it “responsible fiscal management” and say what your describing is “baby murder”

          Then I can say, “So you oppose ‘responsible fiscal management’ to ‘baby murder’?”

          It’s technically true, right? You did just say I can call it whatever I want.

          It’s an equivocation fallacy, you’re redefining the term to fit whatever you’re upset about, then rely on the outrage generated by the generally accepted meaning of the term; even though, we both know that’s not actually what you’re referring to.

          Taxes are a drag on growth: fact.

          Now, you can argue that “hurr hurr LNP are teh bad, trickle down” etc. but the only people who are going to take that seriously are those who already labour under this incomplete view of the world.

          Anyone else who thinks about the specific matter at hand can see that Whited’s Law applies: “It’s a bit more complicated than that”.

          But since the only razor you have is LNP = teh bads, that’s what you boil everything down to. And that doesn’t necessarily mean that it is or is not the case; but you’ve nowhere exercised any constructive analysis to reach such a prediction. A broken clock is right twice a day, after all.

          And its painfully obvious when people deploy their partisan razors with such certainty; that they aren’t think about the matter at all. It’s just a reflexive response.

          So when you make fallacious and misleaidng arguments then resort to your partisan razor, you just scream to all the adults in the room that you don’t know what you’re talking about. It’s your life and your intellect, do what you want with it; but be aware– that’s exactly how it presents.

        • I would presume that at least a working knowledge of Econ 101 and maintaining that knowledge, is a useful prequisite for commenting on economics.

          You disagree?

  • So your saying that a industry that is resistant to Covid19 (and just happens to align with your own interests) should be allocated funding over industries, and by extension, people hard hit working in these industries, by Covid19?

    This seems both parochialist and counterintuitive.

    • No more counterintuitive than cutting support for people made unemployed by covid even when many are still under total lockdown, giving people unaffected by covid by virtue of the fact that they still have a job a large tax cut, and throwing billions of dollars at construction which is largely still going strong while completely ignoring and even in some instances actively punishing industries, particularly female dominated industries, that have experienced massive downturns such as entertainment, education, tourism and hospitality.

      But sure, if your head hurts after hitting yourself on the head with a brick just keep hitting yourself on the head with that brick until the pain stops.

      • You do realise that this is textbook whataboutism right?

        When you stop arguing the point and start saying “well what about all these things?” to support your argument, its a fallacy.

        • Pretty sure it’s not ‘textbook’ whataboutism. I just commented that the government’s actual policy is shit, and that supporting game devs couldn’t be any worse. It was just an argument that the government’s actual policy is shit and maybe some brainstorming about how to do it better isn’t a bad thing.

          This is quite a bit different from justifying the American invasion of Iraq based on the fact that the USSR invaded Afghanistan a few years earlier so everyone does it.

          Regardless, strictly speaking, although you didn’t explicitly support the government’s current policies, you did imply that funding for game devs would be at the expense of “funding over industries, and by extension, people hard hit working in these industries”.

          Aside from the fact that government support is a not zero sum game (you can do both), nobody’s taking money away from covid effected industries because the government isn’t actually providing much at all in the way of support for covid effected industries, as I describe in another post below.

          Indeed, one can make quite a strong argument that improving job opportunities in the game development sector is far more likely to create opportunities to absorb some percentage of currently unemployed white collar workers than construction and random tax cuts ever could, dollar for dollar.

          • [quote]Pretty sure it’s not ‘textbook’ whataboutism. I just commented that the government’s actual policy is shit, and that supporting game devs couldn’t be any worse. It was just an argument that the government’s actual policy is shit and maybe some brainstorming about how to do it better isn’t a bad thing.[/quote]

            Oh, so just vageuly grey whataboutism is your defence? C’mon.

            Yeah, you asserted the government’s policy is shit. However, since this is the premise under discussion, that’s a point that has to be defended rationally. You’ve asserted it’s shit because its the government’ policy; now you’re asserting the government is shit because this is its policy.

            Classic circular logic.

            The second part of this paragraph assumes that the people who do this work for the government are stupid or didn’t think of this. This is not America. Those people are ridiculously sharp. Do you know why? Because of the Darwinistic nature of student politics.

            Unless you are an obscenely talented and ruthless individual, you just don’t get a look in on this scene (trust me I’ve tried). But you’re like “hey maybe they shoulda brainstormed?”. Nice dude, thanks for that, some real novel input right there.

            C’mon, you think nobody thought of that?

            “This is quite a bit different from justifying the American invasion of Iraq based on the fact that the USSR invaded Afghanistan a few years earlier so everyone does it.”

            The fuck you talking about? I don’t know a lot about how this figures into the conversation, but I know a lot about meaningless tangents; and this is *definitely* a meaningless tangent. [-Trent]

            “Regardless, strictly speaking, although you didn’t explicitly support the government’s current policies, you did imply that funding for game devs would be at the expense of “funding over industries, and by extension, people hard hit working in these industries”.”

            Do you wanna do this one again?

            “Aside from the fact that government support is a not zero sum game (you can do both), nobody’s taking money away from covid effected industries because the government isn’t actually providing much at all in the way of support for covid effected industries, as I describe in another post below.”

            That’s not entirely true. There’s a school of belief that you can go funding everything on forever by printing cash asq long as you control inflation. Oh there’s more (I basically type in real time because googling and nitpicking everything is dishonest for internet comments imo)

            >>>>>>>>>>>>
            Regardless, strictly speaking, although you didn’t explicitly support the government’s current policies, you did imply that funding for game devs would be at the expense of “funding over industries, and by extension, people hard hit working in these industries”.

            Aside from the fact that government support is a not zero sum game (you can do both), nobody’s taking money away from covid effected industries because the government isn’t actually providing much at all in the way of support for covid effected industries, as I describe in another post below.

            >>>>>>>>>>>>>>

            No, this isn’t an accurate portrayal at all. Just because its not a zero sum game, doesn’t mean that scarcity stops existing. Economics is literally a science about “the allocation of scarce resources”; why do you think goon bags are such a viable catalyst for teenage pregnancy?

            Also protip: Effect is a noun, affect is a verb. So you will have “Covid-affected industries”, because -Covid affects those industries it does the thing to them. Whereas we might say “Industries are suffering from the Covid Effect”, where what Covid does to industries in general is the ‘thing’.

            Look, I know it seems churlish, but you’re showing your age and it’s a common mistake. This is how I remember it because I used to make the same mistake when I was young. I am being a bit self interested here; not because I want to make a point, but at my age, I just want things to be easy to read. I apologise if you’re ESL, but see above.

            Okay so that aside; the burden of proof now lies with you to demonstrate how this money could have been better spent; *and* that the government’s position is *specifically unreasonable*.

            It’s all well and good to criticise a strategy, like perhaps mine that we should buy ARM, annex the moon, hold the world ransom by building heaps of moon nukes and withholding iron ore from the rest of the planet to enforce my … erm … our monarchic absolute rule, then colonise Ceres using nuclear pulse propulsion; that went entirely unanswered despite it being in an entire facebook comment, then maybe you should offer an alternative?

            Then beyond that, you’ll need to demonstrate about how putting funding into what are mostly going to exploitative pay to win skinner box mobile games further our society and species, *as well as* our economy.

            To conclude, you can point at all the other places that the oney went like mining, or “big business”; but then you’d need to demonstrate from a risk perspective, why these industries weren’t good *economic* bets.

            The problem here, and as I’ve outlined elsewhere, is if you can’t outline a better idea on your own terms; without just pointing to someone else’s idea.

  • That’s what happens when you elect an incompetent insane cult member as PM and bring his stupidly regressive party to power. Australia, we need to do better, let’s not become the next USA.

  • I’m happy to bash the government as much as the next person, but the video games industry has grown during covid… All that money needs to go to… you know, the areas that need it, that have gone down, where we lost jobs.

    The asset write-off is going to assist almost everyone too. Everyone will be upgrading their development hardware, servers, etc. Its hardly a kick in the nuts for one of the most successful industries going.

    Play nice, argue on merit.

    • Is there a source for this Australian games industry growth? I guess it wouldn’t be hard to have grown from stuff all to stuff all +1. Certainly we wouldn’t want to invest in something that’s basically been ignored for decades and has massive future potential.

    • The asset write-off is NOT going to assist almost everyone. The only areas it will assist are industries that already have good cash flow and incentive to invest. Industries actually effected by covid are the last areas that are going to benefit as they’re hardly going to be investing given that their cash flow, and customer and employee levels, have crashed.

      And if you had to pick some form of corvid-related assistance, giving tradies incentive to buy a new imported ute and a shiny new set of imported tools, and maybe a new imported computer for ‘bookkeeping’ (that is, for the kids to use on weekends), is hardly going to make a difference to anyone.

      It’s true that the video game industry are hardly the worst hit sector in the economy, but if you had to invest in an area with huge potential for growth and capacity to absorb some of the unemployed from related areas, such as education and entertainment, you could do a hella lot worse.

      • What industry do you think wont benefit from the asset writ off?

        You don’t need good cash flow, that shows your lack of business knowledge – you operate just fine with access to cheap credit – credit hasn’t ever been cheaper.

        Our economy works ok without manufacturing everything here, jobs are jobs, and there is a deep network of local service businesses that lay under every sale of an import item.

  • Given LNP’s funding priorities, these companies just need to become mining companies and then they will instantly get billions in funding from the LNP.

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