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Labor minister calls for 40% tax rebate for games industry

Friday, 25 November 2011 | By Michelle Hammond
A local games studio has welcomed a push by Federal Arts Minister Simon Crean to extend a 40% tax rebate to the games sector, saying any government support would be welcomed.

 

Crean will make the case for an extension of the 40% producer tax rebate, which saved the local film industry, as part of the expenditure review committee process before the next budget.

 

Paul Gray, co-founder of games studio Bubble Gum Interactive, which is based in Sydney, believes the rebate “would be a great help” within the local gaming sector.

 

“Producers perform an essential role for games development companies. It’s such a core role, and a highly qualified role – it’s not super expensive but it’s super specialised,” Gray says.

 

“Any support from the government would definitely help, especially for start-ups and small business.”

 

The rebate – as it applies to the film industry – is responsible for securing a spate of successful movies for Australia, ranging from Happy Feet Two to The Great Gatsby.

 

The plan to apply the rebate to the games industry follows extensive lobbying by Happy Feet director George Miller.

 

Miller hopes to bolster production at his Sydney-based Dr D studio by branching into games, including the next project from the maker of popular Australian game LA Noire.

 

A report by PricewaterhouseCoopers reveals the global games industry, worth more than $60 billion, will be worth a whopping $90.1 billion in 2015.

 

And while movie-tracking service Box Office Mojo identifies The Dark Knight as the world’s highest grossing film over five days – at $US204 million – it was eclipsed by video game Call of Duty: Modern Warfare 3, which made $US775 million in the same period.

 

According to Crean, it’s an industry that “has to be encouraged”.

 

“Until I went to George Miller’s studios… I hadn’t understood the extension of the film industry to the game industry,” Crean told The Australian Financial Review.

 

“I think there’s a strong case for it – it’s a logical extension to what we’ve already proved our worth at and the international market already values.”

 

Miller argues the rebate is necessary to help Australia compete with countries such as Canada, which offers a 40% rebate; competition that has decimated the Australian game industry.

 

According to Gray, part of the problem is that the local gaming sector is often “misunderstood”, claiming it has not always been taken seriously.

 

“The traditional view is of teenage boys in their bedrooms, but it’s much more mainstream than a lot of traditional media advisors and government advisors might believe,” he says.

 

Gray believes the industry will see a rise in the number of independent developers, particularly as larger, generic studios continue to close.

 

“We’re seeing more students doing their own independent outfits. We see lots of people doing [game development part-time] to varying levels of success.”

 

“Every time I talk to students at colleges, the colleges make them work on games but the more proactive ones formalise that to some extent, on iTunes or whatever.”

 

“My main advice is you have to be customer-centric in what you’re developing.”

 

“You have to create a story around something and be passionate about it, but you also have to make sure it’s not just for you but for a target audience – you have the find the right balance.”

 

In other gaming news, US-based app developer Big Fish Games has removed its app from the App Store just one day after it became the first app developer to offer games by subscription.

 

The app let subscribers play iPad games for a monthly fee. It was not only the first subscription game service offered in the App Store, but also believed to be the first cloud-based one.

 

To date, App Store games have only been available for individual, one-time purchase and download.

 

A spokesperson for Big Fish Games said in an email the company “worked collaboratively with Apple over several weeks to ensure the service met all their guidelines”.

 

It’s not clear why Apple has pulled the game, nor if it intends to introduce game subscriptions to the App Store in the near future.

 

Apple commentator John Gruber suggested the app might have been accidentally approved by an App Store reviewer in violation of App Store guidelines.