Playtime and Politics - the Future of Games Development in Australia

Government support for the games industry in Australia has a very sparse history. With a reputation as being too frivolous within the technology industries, too childish within the entertainment industries and too young to have earned it’s status amongst the arts, it has always had a hard time finding it’s place and it’s supporters in parliament. It’s clear that the games industry has suffered for it, with Australian employment in the sector as of 2014 at only 57% of its 2007 levels, despite being the fastest growing entertainment industry globally [1]. The future looked grim in 2014 when the Abbott government abruptly cancelled the only federal program that offered support to Australian game developers. However, recent events in the senate have given us cause for optimism.

In June of 2015 Senator Scott Ludlam called for a senate inquiry into the future of Australia’s game industry with a goal of determining the employment, economic and creative benefits it delivers to the nation, and what the government should be doing to support it [2]. There was a strong response from the industry, with 111 submissions coming in from all around the country [3]. We put in a short submission ourselves to add our voice to the cause, which you can read here. This was followed by a series of hearings in Melbourne, Brisbane and Sydney where industry representatives were given a chance to expand upon their submissions and answer questions from a panel of senators from across the major parties. The resulting report from the inquiry was released on the 29th of April, but before we go into the results I want to give a bit of background to show why this inquiry was both much appreciated and long overdue.

Recent history

Prior to the global financial crisis in ‘07/’08 Australia had a relatively healthy games industry, comprised mostly of contract work and subsidiary companies for international publishers. This changed over the next few years as the GFC and the rising Australian dollar saw the number of overseas companies outsourcing work to Australia shrink, resulting in 60% of the developers who made up the industry moving overseas or into other industries for work. The landscape has drastically changed since then, with digital distribution paving the way for the smaller independent companies which currently employ 76% of game developers in Australia [1].

In 2012 the Minister for the Arts, Simon Crean, announced the Australian Interactive Games Fund (AIGF). With $20 million in initial funding over three years, the AIGF was designed to be a self sustaining fund that supported the growth and sustainability of the industry. In its short lifespan the fund helped in the development of multiple hit games and allowed several studios to expand [4]. Despite it’s success, the fund was cut in the Abbott government's first budget with no explanation and no consultation with the industry [5].

Why fund games?

“Before we started at 9 am, I had this general view that people that played games were young teenage—Senator Reynolds used the word 'geeks'.” - Senator Urquhart [6]

There are a lot of misconceptions about what we’re talking about when we say “games industry”. Games are often thought of as being toys for children, mostly male. In fact, this sentiment was expressed by several of the senators who attended the hearings. But to say that the games industry is for children’s toys is akin to saying that the medium of video is for Saturday morning cartoons. In reality games are used as entertainment by a large majority of the public and have further uses in other sectors, including health, science, education, defense, and many more. The medium allows us to simulate and interact with digital worlds - it shouldn’t be surprising that the range of applications is vast.

(Screenshot from Sound Scouts - a game designed to test the hearing of children)

There were some great examples of games being used in industries beyond entertainment in the inquiry. Ron Curry of the IGEA described some of them in the Sydney hearing:

“Alzheimer's Australia are using games, not to treat Alzheimer's sufferers but to assist in dementia care. They are creating an environment where carers learn what it is like to have dementia in order to better manage the care of dementia sufferers. Interestingly, there is a small start-up in Noosa, Disparity Games, who are developing a game called Ninja Pizza Girl, which tackles the issues of teenage bullying.... My final example is an Australian game developer, Carolyn Mee, who created an interactive game called Sound Scouts, which helps identify hearing problems in preschool aged children. The success of the game as a diagnostic tool is based on the fact that kids enjoy playing it—very simple. Sound Scouts drives a targeted, cost-effective health sector outcome.” [4]

As did Professor Stuart Smith in his submission:

“Application areas are as diverse as engaging a person recovering from stroke in repetitive rehabilitation arm movements, to delivering critical incident response training to emergency personnel through to educating a child living with cancer about the impact of chemotherapy on their health or another about the impact of genocide in Dafur.” [7]

If you need more convincing see this blog post written by a friend of mine, PhD student Kelsie Long, about various games being used to aid scientific research, or this video of a dying woman using a VR device to experience the outside world again.

Even within the entertainment industry, games hold a lot more weight than they are often given credit for. The stories told in games are as rich and diverse as in any storytelling medium. There are games that tell stories of loss and life and art. There are games that preserve and spread awareness of the cultures of indigenous populations. There are plenty of games that tell incredible stories in ways that just wouldn’t be possible outside of an interactive medium.

It is also wrong to categorise gamers as being only young or male. The IGEA’s 2016 report into gaming habits in Australia[8] contains some statistics that will surprise some people:

  • The average gamer is 33 years old

  • 47% of gamers are female

  • 68% of the population plays games

(Page 5 of iGEA's Digital Australia Report 2016)

From an economic standpoint, a strong games industry would be great for Australia. Games are close to being a US$100 billion dollar industry globally and are by far the fastest growing entertainment industry [9]. Thanks to digital distribution, they are remarkably easy to export to the entire world at little cost. This is particularly good for a relatively isolated country like ours. As Ron Curry points out, “These are weightless exports. We do not need to dig them up, they are clean and there is a limitless resource”[4].

This is an exciting industry at the forefront of innovation. It’s making more money and growing faster than any other entertainment industry. It should fit right into this government's plan for an “ideas boom”.

How to fund games

“I think one of the great challenges the sector has had is that we straddle that really odd line between technology and arts... When we see programs launched, they are never actually directed at us because we do not really fit that mould. We will look at a program and be told, 'No, you are kind of arts.' We will go off to the arts and they will go, 'No, no. You should be over there in innovation.' It has been challenging for us. That is probably the single biggest reason we are saying, 'Look at us; we are different.'” - Tony Reed [6]

The needs of small startups like ours are vastly different to that of larger studios. To briefly touch on the later (which is not where our experience lies), the consensus from the industry is that if we want to attract large AAA studios back to Australia we need to provide some of the tax incentives enjoyed by the film industry. Canada is often brought up as an example, with its favourable incentives leading to it becoming the third largest games industry in the world [1]. Meanwhile, Australia’s last big budget studio, 2K Australia, closed in 2015 due to high operating costs [10].

Our submission to the inquiry focused mainly on the needs of small indie studios. For studios like ours a small amount of seed funding can go a very long way - enough to cover office costs, equipment and travel to conventions can easily be the difference between life and death. We’re currently developing Evergreen on a budget of $56,000 (secured through roundabout funding sources, not available to most new studios. See Micheal’s post about our finances for more info). That money has covered our running costs and allowed us to travel to Seattle to be a part of the Indie Megabooth at PAX Prime, to New Zealand and Melbourne for award nominations, and to various other events around the country that presented fruitful marketing and networking opportunities. I doubt we would still be operating as a studio without it.

Defiant Development presents a much better case study of a small studio success story than us though. Defiant have been operating for six years, doing a mix of work-for-hire and their own IP. They received $650,000 from the now defunct AIGF to fund their recent game Hand of Fate, which has returned $4 million as of March 2016. They have since created a dozen more jobs, and will pay an amount in tax this year “roughly equivalent” to the full funding they received from the AIGF [11]. Not every small studio will be so successful of course, but the AIGF managed to fund 35 other games in its short lifespan, many of which have had similar successes, which is a very promising indicator of its effectiveness [4].

(A screenshot from Defiant Development's Hand of Fate)

Results

On the 29th of April the senate committee published their report [12] on the results of the inquiry - and it’s very positive! Titled “Game on: more than playing around”, the report makes a comprehensive list of recommendations to the government that are exactly in line with the support that the majority of the industry has been calling for. The report itself is a hefty ninety page document, but the recommendations are neatly summarised on the first page. Of particular note are the recommendations to:

  • Reinstate the Australian Interactive Games Fund

  • Introduce tax incentives to develop games in Australia

  • Assist in the creation of shared working spaces and innovation hubs

  • Encourage the uptake of serious games for use in health care, education and other sectors

Conclusions

The report is a fantastic step in the right direction, but the task now shifts towards convincing the rest of parliament and the general public of the merits of having a strong games industry in Australia. Senator Back rightly points out that the industry has a branding problem:

“I know nothing about this industry... but it seems to me that you undersell yourselves by calling this 'interactive games'. That types you as some sort of frivolous operation that fiddles around with kids who have nothing else to do. Clearly I am learning what your industry does and the skillsets that graduates have… so I guess the challenge to you is how do you overcome that negative or neutral perception?”[4]

Despite his talk of an innovation revolution, I somehow doubt that Turnbull sees funding video games winning him any political points leading up to the election, whatever the economic benefits may be. Maybe I’m being pessimistic though. I do believe that it’s now a matter of when and not if we will see the industry gain some respect in the political world.

I’d like to issue a big thanks on behalf of Siege Sloth Games to all the industry representatives who did such a great job putting our case towards the government. We’ve got our fingers crossed that it leads to some positive results.

Resources

[1] GDAA senate inquiry submission

http://www.aph.gov.au/DocumentStore.ashx?id=3769392e-1795-4d9a-8330-155483f2946e&subId=402690

[2] Green’s Level Up and Secure Inquiry into Australian Video Game Industry

http://greens.org.au/node/11519

[3] Senate inquiry submissions

http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Environment_and_Communications/Video_game_industry/Submissions

[4] Senate inquiry hearing transcript - Sydney http://parlinfo.aph.gov.au/parlInfo/download/committees/commsen/3d68b5f9-050f-48bd-8ab3-6093aca8e91f/toc_pdf/Environment%20and%20Communications%20References%20Committee_2016_03_11_4274_Official.pdf;fileType=application%2Fpdf#search=%22committees/commsen/3d68b5f9-050f-48bd-8ab3-6093aca8e91f/0000%22

[5] Video game peak body baffled by budget fund cut

http://www.smh.com.au/digital-life/games/video-game-peak-body-baffled-by-budget-fund-cut-20140515-zrdag.html

[6] Senate inquiry hearing transcript - Melbourne

http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22committees%2Fcommsen%2F791c01e2-ba0e-4831-a773-4eb6aa82bf5f%2F0000%22

[7] Professor Stuart Smith senate inquiry submission

http://www.aph.gov.au/DocumentStore.ashx?id=eabbb022-c1d2-46e1-8d4f-2d2cae96295a&subId=402648

[8] IGEA Digital Age 2016

http://www.igea.net/wp-content/uploads/2015/07/Digital-Australia-2016-DA16-Final.pdf

[9] IGEA senate inquiry submission

http://www.aph.gov.au/DocumentStore.ashx?id=5b5dfdfb-fdd6-4556-957f-e95785c6dc75&subId=401729

[10] 2K Australia In Canberra Closes Its Doors

http://www.kotaku.com.au/2015/04/2k-australia-in-canberra-closes-its-doors/

[11] Senate inquiry hearing transcript - Brisbane

http://parlinfo.aph.gov.au/parlInfo/download/committees/commsen/251fea07-1b9e-457e-8840-3b7d0dd94790/toc_pdf/Environment%20and%20Communications%20References%20Committee_2016_03_10_4270_Official.pdf;fileType=application%2Fpdf#search=%22committees/commsen/251fea07-1b9e-457e-8840-3b7d0dd94790/0001%22

[12] Senate inquiry report

http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Environment_and_Communications/Video_game_industry/~/media/Committees/ec_ctte/Video_game_industry/report.pdf