Technology

How video games could become Australia's next big export

The results of a new independent survey of Australian video game developers suggests the industry has potential to become a "clean" national export, earning $114.9 million in the 2015–16 financial year, 81 per cent of that from overseas markets.

With global revenue for games expected to reach $US98 billion in the next two years, 78 per cent of respondents to the Australian video game development survey — funded by a grant from the International Game Developers Association — indicated they expect their business will grow in the coming year. 

The local industry employed 842 people in the last financial year, with programmers (33 per cent), artists (24 per cent) and management, administration and marketing (20 per cent) making up the bulk of the workforce, the survey found.

Around half of the respondents were independent developers which exclusively develop their own intellectual property (IP), while a further 42 per cent developed their own IP while also providing development work to clients.

The survey also found that the local games industry is concentrated in Melbourne, with the Victorian capital being home to 51 per cent of the developers, followed by Sydney with 14 per cent.

Ron Curry, CEO of the Interactive Games & Entertainment Association, says the sector is exactly the kind of innovative, jobs-for-the-future sector extolled by the prime minister and others, but that Victoria was currently the only place it was getting any of the government support and recognition it needs to grow.

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"I think if you look at the support the Victorian government gives to its game developer community, it's certainly the place to be," Curry says.

Through various programs, Victoria provides grants for game development, funding for developers to visit overseas conferences and is involved with the annual Melbourne Games Week and PAX expo.

"It's the state where government understands how important intellectual property and innovation is," Curry says.

The biggest challenge facing Australian studios, according to Curry, is competition from developers in other nations, which receive far superior "allowances, incentives and supports" from their governments compared to those in Australia. He also points to "a less than desirable NBN" as holding locals back.

Curry says the IGEA wants to create an ecosystem where big international companies will keep Australia in the mix when looking for places to set up shop.

"At the moment they just don't consider it," he says.

In 2016 Senator Scott Ludlam championed an inquiry into the future of Australia's game industry. The inquiry report was delivered in April with bipartisan support and many recommendations to further grow the sector. While Curry says there were many helpful recommendations, none have been acted upon so far. The IGEA says it is currently awaiting a promised "all of government response" to the inquiry.

The main thing needed to kick off the growth the industry needs, Curry says, are governments "who are brave enough to start engaging in the industry".

"There's not one solution," he says. "There needs to be a good series of cogs that come together to support the industry."

Australians 'on the cutting edge'

Australia was once home to several big development houses making so-called AAA console games, but changes in currency exchange rates as well as the rise of mobile gaming and the axing of Labor's Interactive Games Fund sparked a decline in the industry and a move towards independent development a a focus on mobile.

Luis Gigliotti, managing director of Melbourne studio Firemonkeys, says this climate has actually given the local industry a head start.

Firemonkeys, is a studio owned by US games giant Electronic Arts and is one of our country's most successful development firms. In 2016 it managed the mobile games The Sims: Freeplay, Need for Speed: No Limits and Real Racing 3 — which are all 'live services', meaning new content is made and published daily — as well as launching EA's first mobile VR project. 

Gigliotti says that as mobile games become more complex, and console games become more online-focused, the line between the two will blur. As a scene filled with developers that cut their teeth on console gaming before having to pivot and master the mobile business, he says the Australian industry is "perfectly positioned".

"I believe the entire games industry is merging," he says. "Look at Real Racing 3, it's console-level graphics on mobile. My friends who are still [developing games] on console are being told 'you need to be doing live services'."

Most mainstream games on console currently have online multiplayer and features that require an internet connection, but Gigliotti says most still follow a "downloadable content" model, where optional additions to the game can be added after release. In the future he expects this to change.

"What we do on mobile is every day, on every title. New, fresh, engaging content. I wouldn't be surprised if in the near future we see Microsoft, and especially Sony, saying that in order to get a project greenlit it has to be much more aggressive on the live services," he says.

"Australia is on the bleeding edge, ahead of the curve. If you only have one side of the core competency [i.e. console development or live services], you're not going to be prepared as Australia is."

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