Building a weightless, ‘grey matter’ export success story

Recently, our CEO wrote a piece for the Australian Newspaper that was published on 4/10/16. In case you can’t get through their paywall, the article went like this:

There are few issues before the parliament in which lawmakers are in such enthusiastic agreement – recognition that the fast-growing video games development industry has fallen between the cracks of industry policy is certainly one of them.

This is an issue about which everyone cares, but no-one is will to take responsibility. Everyone wants Australia to build a strong and viable export industry that addresses this burgeoning $100 billion global market, but policy keeps falling through the gaps.

The problem has been well-recognised by all sides of politics. In fact, it was the subject of a recent multi-party Senate Inquiry that made a series of unanimous recommendations aimed at building a stronger local development industry through establishing better targeted policy.

How ironic that this Senate report – a highlight of which was the strong cross-party support for a rethink of policy aimed at the video games development industry – was released on the eve of the long and fraught federal election campaign, and has sunk from view.

This is a genuine problem now. The difficulties faced by the video games sector should be seen as a canary in the coalmine. Why? Because the games development sector is exactly the kind of jobs-of-the-future, export-facing, technology-based industry that government says will help under-pin our transitioning economy.

The policy settings, if indeed there are any,  that are supposed to support the sector are not working. In the context of those high-tech, high-value multi-disciplinary jobs of the future, the canary is struggling for clean air.

Here’s the thing about the games development sector that makes it an unusual policy challenge: It is intensely creative, but is also highly technical, very often at the very cutting edge of commercial technology.

If you think about video games, you might be drawn to the incredible storylines or the richness of the graphics, but you might also be stunned by the technical brilliance of the coding. That’s how this industry is – very creative, and very technical.

This perfect union of creativity and technology lends itself to an array of very different markets for video games, further shaping the challenge for policy-makers. Some games are fun; entertainment designed for leisure. Other video games are serious, such as those in education that help kids learn, or the healthcare sector that support patient outcomes. And others, seamlessly stitch fun and ‘seriouness’ together.

Is it any wonder then that the industry has fallen through the cracks? Should it be supported through the Arts portfolio? After all, it is intensely creative – and globally it is bigger than the film industry. And yet the Arts portfolio has funding programs for film development, but none for video games.

What about targeted support from the Industry portfolio, where some games development teams have been stymied?

And how does the Education portfolio deliver targeted support for the sector, to ensure it has the pipeline of multi-disciplinary skills it needs to grow? And what of our Trade Development programs?

This is not an issue of political will. We know that government recognises the video games development  sector has unique needs. And it is not necessarily a matter of additional spending. Far from industry looking for a hand out, it’s searching for a ‘hand up’.

There does need to be a more co-ordinated approach to introducing support programs. Otherwise the targets of any programs – the small, creative development shops – simply get lost along the way. Just trying to find these programs, if they indeed exist, across the portfolios is expensive and daunting for smaller development companies.

This kind of co-ordinated support is hardly unprecedented. The Federal Government has a number of Industry Growth Centres where it deems Australia has a competitive advantage. The latest Industry Growth Centre was announced earlier this year targeting opportunities in cybersecurity.

Game developers are a hybrid of specialised skills. It is both intensely creative and intensely technical. It requires precisely the mix of skills that exemplify the agility and innovation that our government talks about.

The global video games industry is expected to grow to more than $120 billion by 2020. This huge market exists almost entirely offshore. If you talk to the high-profile success stories like Hipster Whale (which developed Crossy-Road) or Halfbrick Studio (the people behind Fruit Ninja) they will tell you that only a tiny proportion of sales come from the domestic Australian market. The revenues they generate and are exclusively export income.

For a country like Australia, which boasts both incredible creative and technical talent – and hugely diverse population to fill that talent pool – a strong local video games development industry should be a priority. It carries an enormous potential export upside.

Adopting the unanimous recommendations of the multi-party Senate committee report would give the industry an enormous boost. It might even be enough to allow the local sector to achieve its full potential.

The committee recommended a more favourable tax treatment for smaller games developers, the creation regional innovation hubs, support for video games-specific co-working spaces and accelerators, and the reinstatement of the Australian Interactive Games Fund.

Australia has the capacity to deliver cutting-edge digital products and technologies that are globally competitive. The video games development sector is a weightless and ‘clean’ export industry.

The creative and technical skills of the sector are easily transferrable to other emerging digital industries that have been identified as priority areas for government.

These are exciting times to be involved in the video games development sector in this country. The challenges are not insurmountable, but the opportunities are immense.

It would seem a shame indeed if the bipartisan support for Senate recommendations that will meet the challenges faced by the video game industry is lost in the aftermath of the 2016 election campaign.