Interactive gaming could be Australia’s next boom industry, a federal senate committee inquiry has heard.
As the country’s motor industry grinds to a halt and the rivers of gold from mining start to dry up, there are predictions that the interactive games industry could lead the way in creating jobs, shoring up export volumes and attracting talent back home.
The Environment and Communications References Committee has been tasked with reporting on the future of Australia’s video game development industry, examining how to increase employment in the industry, maximise exports and attract overseas video game companies to settle here.
The committee will also look at how the government can help the industry flourish by initiating changes to taxation and regulation.
Gaming is not confined to schoolkids and slacker adults playing Grand Theft Auto for hours on end, it has become a serious business. Interactive games have a huge variety of applications, whether it they are used in health, mining, aged care or education.
For example, interactive games can replace psychometric testing in job interviews; identify hearing problems, stave off dementia and combat teenage bullying.
CEO of the Interactive Games and Entertainment Australia (IGEA), Ron Curry told the inquiry: “We hold that interactive games, as the newest and most comprehensive entertainment medium, will open many opportunities for Australian companies which are far wider than just entertainment.
Mr Curry said there was huge potential for increasing exports, “These are weightless exports. We do not need to dig them up, they are clean and there is a limitless resource.”
The numbers behind the industry are staggering. In 2015 Australians spent almost $3 billion on interactive entertainment (downloadable content, software, equipment etc.).
Mr Curry told the inquiry that global revenue from the entertainment side of the interactive gaming business alone in the next couple of years was greater than the cumulative revenue of the global film industry.
“When we are talking about games that are being released that are bigger than all box office hits, I guess it is a bit mind-boggling for those who are not engaged in the industry to understand how big it is,” he said.
“We are not just creating a bunch of developers who are drinking Coca-Cola and playing shoot-em-up games; we are creating the next level of business, education, defence. This is where they are learning.”
Supporting this industry could have significant implications for regional Australia: both for creating jobs and to connect people to services and each other. It also makes the regional roll-out of the National Broadband Network a government priority.
“That is the exciting part about it. You can be in Noosa, or Wangaratta or Wagga and still set up a viable business in our space. What you need is the infrastructure [the NBN],” Mr Curry said.
“If the infrastructure is there it is possible to keep employment. We know this industry employs predominantly young people, so what we are doing is keeping young people in regional centres. We are employing them and we are creating an export market.”
Two of the biggest growth areas are Virtual Reality (VR), which is about stepping into a different world and Augmented Reality (AR), where you can add extra information onto what you are seeing in the real world.
Virtual reality is particularly exciting in Australia, where huge distances separate people, Mr Curry said.
“Regional centres can connect with experts in population centres using tools like VR and can get much more personal communication across – not just a voice on a video screen, but body language.”
How the government can help
The industry is pressing for the introduction of a producer offset, similar to the one enjoyed by Australia’s film and TV industry.
Neil Boyd, Director of Business Development and Marketing at Academy of Interactive Entertainment said that extending the producer offset to interactive games would help bigger studios, such as EA, Halfbrick and Wargaming, some of which had moved overseas during the global financial crisis when the Australian dollar was strong.
Large studios are training grounds for people who later establish independent studios. They also provide jobs and help stem the brain drain of developers going to the US, Canada and Europe.
Other industry suggestions for government help included start-up funding and mentoring for smaller projects and better targeting Export Market Development Grants to digital businesses.
Several industry figures also suggested that the government provide some help with travel expenses to attend domestic and international industry events, which were often critical for companies to score deals with companies like Nintendo, Sony and Microsoft.
The federal government cut short the three-year $20 million Interactive Games Fund in 2014, leaving $10 million unspent.
Leon Young, CEO of educational games company 2and2, said the biggest game market was China. He said it was “trending way above the US” and had the largest spend on apps and mobile digital content.
Mr Young said the Australian government could boost the industry’s profile by subsidising regular trade missions to China and helping Australian games companies that did business in China network with each other.
He said strengthening relationships with the Chinese government could help Australian companies understand and navigate regulations, which could limit the commercial risk to companies of having a game pulled or not published.