The Australian federal government’s Budget is right around the corner, and while it’s set to look a bit different this year with the pandemic recovery, it still presents a real opportunity for change. Over the last twelve months, the entire entertainment industry has evolved — but the growth of Australia’s video games industry has been particularly impressive.
According to IGEA, video games generated around $250 billion in revenue in 2020, with consumer interest piqued by stay-at-home orders and the need to re-connect with family and friends while socially-distanced. But despite elevated interest in video games last year, and the ability of developers to continue working from home during the pandemic, the industry still faces major road blocks when it comes to government support.
“Last year, Australia’s game development industry earned $184.6 million and employed 1245 full-time employees with 87% of this revenue derived from exports,” Ron Curry, IGEA CEO, said in a press release provided to Kotaku Australia.
But despite the overall financial success driven by Australian video games, developers still face financial challenges. Currently, Aussie developers earn only “five cents of every $100 in income generated by the sales of video games globally.” According to IGEA, this is because it’s 30% more expensive to make games in Australia due to a lack of tax incentives. This low return doesn’t just stunt the growth of the local industry, it also means developers struggle to earn a comfortable, full-time living in the country.
The lack of funding for video games has mostly been chalked up to a misunderstanding of their purpose, and an ageing government that refuses to understand the value games have. In 2021, we’re also still dealing with mainstream commentators affiliating real-life violence with video games. That’s despite multiple studies refuting this claim and the clear benefits video games had on mental health in 2020 and beyond.
But ignorance is no longer an excuse.
When Animal Crossing: New Horizons was released in March 2020, it was one of the sole games that kept people sane and connected to the real world. That’s just one part of what video games have the power to do. Beyond their clear benefits for mental health and wellbeing, they can also play a key part in Australia’s cultural transmission.
Government funding for the arts as a whole is generally based on the idea that screen entertainment has the ability to highlight Australian culture and values on the global stage. Beyond that, film it also has benefits for tourism and local employment.
Video games have that same ability, and it’s long past time for the Australian government to realise that.
“Over the last decade, the lack of attention, recognition and support provided to game developers by the Federal Government has already cost the Australian economy billions,” Curry said. “If Australia’s game development sector had grown at a 22% CAGR over the past decade — the rate that some overseas jurisdictions grew following its tax offsets — it would have earned $650 million last year alone.”
That’s $650 million in revenue that the Australian government is passing up by not offering tax incentives and offsets for local developers.
With each passing Budget, more attention is paid to screen industries without consideration for how video games can contribute to the local economy and the arts. IGEA is calling on this to change in the upcoming Budget.
“We’ve seen the film and TV sectors receive increases in funding over the last 12 months in order to attract global productions and boost the economy. If the same consideration was opened up to other screen businesses, like those who make video games and associated technologies, game development could attract international studios and generate revenue for Australia,” Curry said.
Australia is filled with world-class developers, but a lack of funding opportunities means much of this talent is being wasted or moving overseas. Our local economy deserves better.
It’s time for our political leaders to recognise the value video games have for the economy, mental health, local employment and cultural transmission. Screen entertainment has the power to be transformative in so many ways, and it’s time video games get the recognition and support they deserve from the government.