Powering up Australian gaming

For many years, the Australian videogame industry has been trying to carve a niche for itself internationally. There have been moments of success and moments of decline, but the sector's true potential has never been fulfilled.

But could we now be on the verge of a sustainable videogame industry in Australia? It would seem so – and, to be honest, it's about time.

The nation's game industry emerged in the late 1980s and experienced significant growth in the next decade-and-a-half, with the establishment of many game development studios.

These studios were located mainly in Brisbane and Melbourne. They included (in Brisbane) studios such as Auran (1995), Wildfire Studios (1995), Krome Studios(1999), Pandemic Studios (2000) and Halfbrick Studios. In Melbourne they included Torus Games (1994), Tantalus Interactive (1994), and Blue Tongue(1995).

But the past few years haven't been great for the industry, with several pioneer studios in Brisbane, Melbourne and Sydney closing their doors. Among these are Pandemic Studios in Brisbane, which closed in 2009, Krome Studios, whichclosed in 2010, and THQ's Brisbane and Melbourne studios, which shut down in 2011.

There are three main reasons for the downturn in this sector:

• the rise of the Australian dollar
• tax breaks for game developers overseas (for instance, the Quebec government in Canada subsidises 37.5 per cent of videogame studios' payrolls)
• the decline of middle-ground games (that is, games that fall between triple-A titles – such as Call of Duty: Modern Warfare 3 – and smaller, independent games, such as Flight Control).

These challenges collide with the fact that, according to the Interactive Games and Entertainment Association's (IGEA) Digital Australia 2012 report, 92 per cent  of Australian households have devices for playing games (compared to 88 per cent last year) and that Australians spent $1.7 billion on videogames in 2010.

But Australia respresents only two per cent of the world market, so Australian game companies need to export if they want to survive.

One primary concern with the closure of keystone studios in Australia is the fact many professionals, or “talents”, are leaving to find work overseas.

All of which raises the big question: where to from here?

If we look at interactive entertainment in Australia in 2006/2007, the industry's total income was $136.9 million with $116.9 million (85 per cent  of income) coming from the provision of services to other businesses. Of this service income, 93 per cent came from overseas sources. In comparison, the film and television industry relies less on fee-for-service work.

The film and television industry in Australia has experienced more government support than the video game industry because it employs more people: 13,844 people in June 2007 compared with 1,431 workers in video games. (These 1,431 people were spread across 45 game development businesses, located mainly in Queensland and Victoria.)

The fact the Australian game industry was mostly relying on international game studios and publishers (which is especially true for Queensland) is one of the main weaknesses of the industry. 

Flight Control, designed by Firemint, is one of Australia's most successful video games. Pic: Krunoslav Husak

Victoria has been the most proactive in supporting the industry and it was the first Australian state to provide government funding for its game industry in 1996.

In 2000, it launched Game Plan, a statement of support for the computer game industry, followed by Game Plan: the Next Level in 2001. With the creation of Film Victoria in 2001 – which administers the Digital Media Fund – Victoria has a long tradition of supporting the videogame industry.

Videogame studios have also had support in Queensland, but to a lesser extent than in Victoria. At the national scale, the Game Developers' Association of Australia (GDAA) has four objectives:

• to promote the growth of the game industry in Australia
• to represent the interests of GDAA members
• to attract capital and publishers from offshore
• to retain and attract talent in our local industry and to promote a sense of community within the industry.

Since 2006/2007, the make-up and focus of the sector has changed. There has been the closure of studios focusing on console games, and the emergence of many independent developers specialising in online games and games for mobile devices.

As one representative responsible for the game industry at Multimedia Victoria told me: “Our strategy is now to encourage local game developers to develop their own IP [Intellectual Property] through the Digital Media Fund.

“Australia has never been able to deliver a huge triple-A title … our aim is now to nurture the local industry, even though we are still active in trying to attract international video game companies. The objective is to develop a sustainable video game industry”.

The State of Queensland (through the Department of Employment and Economic Development) is also trying to adapt its policies to the recent changes in the industry. A government ICT business advisor told me:

“The attraction of large studios won't be our main focus … we see the mobile [games for mobile devices] as the way forward … we are also starting to look at the Asian market [Korea, China] … why not try to swap IPs from one country to another, take a successful Australian mobile phone game and ‘Koreanise' it for the Korean market?”

While there are obviously plenty of opportunities to develop a sustainable video game industry in Australia, the key appears to be an ongoing dialogue between industry and policy advisors at a state level, and an association such as the GDAA.

The Australian game industry should “play” with its strengths (local talent, proximity to the Asian market, expertise in online gaming and mobile games, competitive university programs in computer programs, etcetera).

It needs to make the move from being a “contender” to being an international hub for the video game industry.

Sebastien Darchen is a lecturer in planning at the University of Queensland. This article first appeared on The Conversation on February 10. Republished with permission.