APRIL 5, 2008 • Game development has become a true global business and hit games come from all around the world. However, there are a few hot spots where developers tend to congregate. In many cases this is because regional governments provide support mechanisms to help incubate a local technology community. DFC Intelligence is doing some in-depth research into the global production process and this involves looking at the key development hubs.
This month we focus on game development in Queensland, the third largest state in Australia. The Queensland government has been very active in supporting game development and Queensland Games has become the key supporter of the industry. To find out more about development in Queensland, DFC interviewed Mark Fludder, the Senior Business Adviser for Queensland Games, and Jason Mullen the Director of International Government and Business Relations for Queensland Government, Los Angeles.
DFC: Can you give us some background on the history and mission of the Queensland Game organization?
Mark: Queensland Games is a brand established in 2006 by the Queensland Government, Brisbane Marketing and the Queensland games community. It is used by these members to promote a collaborative industry that showcases Queensland as an emerging hub for video game and new creative media development. The community comprises Queensland based studios, educational providers and other supporting companies.
The Queensland Government and Brisbane Marketing have worked extensively together on-the-ground to develop programs that have enhanced the development of a world-class games community. Queensland Games also utilizes a network of 14 representative offices located around the world (including Los Angeles, London, Tokyo and Shanghai) to provide international support for its members in creating linkages with international publishers, media and other providers as well as promoting Queensland Games to the wider international community.
DFC: What are the advantages for developers setting up shop in Queensland?
Jason: There are approximately 670 people employed by Queensland development studios – a number that has rapidly increased over the past few years. With its large output of quality graduates, a strong skilled expatriate network and with another 77,000 approximate employees in the overall ICT sector, Queensland has a strong ability to continue to “ramp up” and grow the community.
Queensland offers many advantages for “home grown” developers as well as international companies. Queensland is cost-effective and has local Governments that are proactively growing the industry. The cost of living is low, office space is affordable and salaries are competitive. Queensland is well recognized as having low business and payroll tax rates in Australia. Furthermore, Australia has reasonable Corporate Tax Rates (that are lower than the United States, France, Germany, Japan, & China). However, beyond that Queensland has the advantages of 1) a strong educational framework, 2) a booming economy and 3) a great location.
The educational framework creates highly sought after staff. Queensland’s universities produce top quality graduates that are highly sought after in the domestic and international new creative media environment. Some of the key statistics include:
• There are nine universities producing IT graduates (with 3,000 students enrolled in Brisbane alone).
• Qantm College is an international leader in creative industries with degrees in Games Programming, Animation, Graphic Design, & Multimedia
• Four universities provide games-specific degrees (including a Bachelor of Games & Interactive Entertainment, Bachelor of Games Design, Bachelor of Interactive Entertainment and Bachelor of Computer Games).
• There are 230,000 annual enrollments for TAFE (Technical and Further Education) Certificates & Diplomas in IT, Information Systems, Software Development, Web Development, Multimedia, Graphic Design, & Creative Industries
In the last 10 years, Queensland’s economy has outperformed all other states in Australia (a country that has seen significant growth itself). The state is home to a population of around 4.2 million people (which is equivalent to that of Louisiana), yet it has a Gross State Product (2007) of $187.3 billion (which is equivalent to the GDP of Hong Kong).
Despite serious threats of a global economic downturn, Queensland’s economic growth is forecast to continue growing at a rate of 5.25%. The booming economy and enviable quality of life has created jobs and lead to major migration to Queensland. The Queensland and Australian games industry itself is going through a significant growth period. During 2006-07, the Australian development scene generated a total income of A$136.9m with income from the provision of game development services accounting for 85.4% (A$116.9m) of total income.
Of course, location plays a major role in Queensland’s attraction. Our enviable location creates a motivated workforce. Queensland, with over 300 warm and sunny days per year and surrounded by a world class natural environment of beach and rain forests, is famous for its quality of life. Its low-cost of living attracts and retains quality staff from all around the world.
Queensland possesses a unique geographic location that creates an opportunity to tap into the Asian games markets and allows it to be across both Western and Eastern trends. Its positioning is actually seen by many in the industry as an advantage especially for a truly global development cycle. In the words of Krome Studios lead designer Cameron Davis in a recent Q&A with Gamasutra:
“One of the key things that we try to promote is that if a publisher has notes about our game, they can look at a new build in the morning, send us notes their afternoon, and by the time they get back to the office in their morning, we’ve sent them a new build, because of the time difference. And that helps speed things along really, really well.”
DFC: How does the development community in Queensland break down between offshoots of large international publishers like THQ and home grown startups?
Mark: The Queensland industry is made up of three international players, Pandemic Studios, THQ Studio Australia and The Creative Assembly. These international players employ around 270 staff between them with all three projecting growth of around 25% over the next 12 months. Krome Studios, a Top 5 independent studio in the world based in Brisbane employs approximately 320 people across Australia and the rest employ approximately 150 staff.
DFC: It appears the government is playing a collaborative role in the creation of the game developers. How does that work if you want to entice new foreign-offshoots of companies to the region? Incentives seem to work whether it is with tax incentives or lease option incentives. Is there anything on those fronts you are working on?
Jason: A three-tier system of government exists in Australia (being Federal, State and Local Governments). All levels of this system play an active role in creating programs that are building the Queensland Games community. At the Federal level, the Australian Government (through AusIndustry) administers a R&D Tax Concession program. It is a is a broad-based, market driven tax concession which allows companies to deduct up to 125% of expenditure incurred on R&D activities when lodging their corporate tax return. A 175% Incremental (Premium) Tax Concession and R&D Tax Offset are also available in certain circumstances.
Furthermore, it was announced in early March 2008 that the Australian Government looks likely to be setting up a High Level Government Committee to examine the possibility of government tax breaks for game developers in Australia that would bring things in line with incentives available for the film industry. This is a new development that if it successful, could put Queensland and Australia on par with Canada’s and Singapore’s tax incentive programs. At the state level, reinvestment by existing companies and the attraction of new investment to Queensland underpins the Government’s strategy to create sustainable employment opportunities throughout the state. The Queensland Government through its investment arm has the ability to provide targeted financial support, if and when required, to influence the location of important projects and the attraction of leading companies to the State. Short-term financial incentives may become available to eligible companies and projects. These incentives may include refunds of payroll tax, land tax and/or stamp duty as well as grants offered to offset part of any establishment, relocation or training costs.
At a local level, Brisbane Marketing provides on-the-ground assistance for international companies looking at investment in the community. This includes providing corporate structuring advice, banking advice, human resources and talent searching, providing critical linkages to the universities, site selection assistance as well as sourcing hardware if necessary.
The Queensland Government’s network of overseas offices also assist international companies in their territory by providing facilitation assistance with all three tiers of Government to ensure quality information exchange and management of a prospective international expansion.
DFC: Back in the 1980s, the Australian government fostered home-grown filmmakers who went on to international acclaim for their distinctly Australian films. Is the goal now to foster uniquely Australian creative game product, or is this current initiative more practical about creation of stable game development jobs?
Mark: Queensland Games has been developed to promote Queensland as an emerging hub in the global industry. The Government players in Queensland Games are committed to ensuring that the video games and new creative media industry continues to grow and that sustainable employment opportunities are created in Queensland. This is achieved by providing programs that will assist each member to grow and create jobs.
In addition to encouraging international investment into the community, a key element of growing the industry and creating new jobs, is encouraging local developers to create their own original IP. According to the Australian Electronic Game Industry Profile published by Insight Economics in November 2006, over 85% of studios in Australia develop their own IP. However, it was reported that of the studios that have undertaken their own IP projects, 20% report that no projects have progressed from prototype to end market while 20% report that all projects have progressed from prototype to end market.
The same report also highlights that given the relative size of the Australian market, developers are highly export oriented, with export revenues estimated to account for over 90% of total industry revenues. This means that Queensland developers need to be able to create original IP that will have resonance in other markets. The Queensland Government is currently developing incentive programs that will enable local studios to continue to develop for others whilst being able to dedicate resources and time to developing original IP. It is envisaged that these programs will improve the success rate of progressing original IP to end market which will ultimately improve financial stability of companies, promote growth and the creation of new jobs.
In addition to these new incentive programs, the Queensland Government is providing recruitment programs that ensure that Queensland attracts and keep the best experienced and skilled talent from across the globe. Since the Queensland Games brand was established and largely as a result of recruitment efforts in and around the GDC over the past two years, Queensland is now seen as a viable destination for a career in games, because of its enviable lifestyle and quality of projects.
The Queensland Government has worked closely with the Australian Government in ensuring immigration procedures are relatively smooth for recruited workers. In that time, there has been a significant increase in 457 Visas issued for skilled international recruits working in the Queensland Games community.
DFC: Do you worry that Australian studios will be pegged as off-shore alternatives for game design directed at the similar U.S. and Euro markets, instead of creating more unique content that can be exported worldwide on its own merits?
Mark: The emergence of the Queensland Games hub has in part been a result of both the quality of development done for international publishers as well as the creation of original IP. Queensland Games has a growing reputation for quality development for international publishers. High-level projects such as the forthcoming Star Wars: The Force Unleashed and other yet to be announced projects, show that international publishers are willing to work with Queensland studios on important AAA titles. At the same time, smaller companies are receiving more and more important licensed title work for handheld devices, Xbox Live Arcade and Wii titles by working on licensed titles for publishers.
Whilst the Queensland Government is developing programs creating original IP, original IP has built and will continue to build the Queensland Games community. Internationally recognized original IP that has been created in Queensland includes “Dark Reign”, the “Destroy All Humans!” franchise and “TY The Tasmanian Tiger” franchise. Currently, a number of Queensland studios are currently devoting resources to developing original IP that will be announced in the next six months.
It is envisaged that the Queensland Games community will continue to grow and its reputation as a development hub to mature by continuing to work on a good mix of both international publisher work as well as original IP.
DFC: You have an established affiliation with Autodesk. Are there any other tool vendors that you have also partnered with for game-specific development tools such as cross-platform portability, motion capture or game audio?
Mark: Many locally based companies exist that provide additional services and tools that enhance development in the video games and new creative media industries in Queensland.
Autodesk is an active supporter of Queensland Games and regularly support its promotional activities. Many of these service and tool providers were formed to support the work at Warner Roadshow Studios based in Queensland – a world class film production facility with one of the biggest lots in the Southern Hemisphere. Additionally, over time, as the market has matured and with the next generation of games consoles changing the business models in the industry, more start-ups have entered the market to provide these additional tools and services.
Key local companies include CVSDude, an internationally recognized on-line software version control and project management hosting company; Cutting Edge, an internationally recognized post production house; Liberty and Beyond Productions, film production company; Light Knights Entertainment, a producer of animated content; Liquid Animation, a leading animation and digital production studios; and The Post Lounge, a post production house.
In relation to music and soundtrack services, the Queensland Games community has many high quality options at its disposal. Leading the way is Game Audio Australia, Australia’s largest game audio production facility having worked on 15 commercial titles on all current and next generation platform. In support, Queensland has many quality artists to call upon for music support. In fact, the quality of the music scene in Queensland is so good, music industry bible, Billboard magazine declared Brisbane as one of its five international music hot spots spawning exciting new sounds.
DFC: Is there anything like an open studio facility that supports these development components that developers can “rent out” for short periods? If such a facility isn’t currently available you could get the various tool and equipment vendors to support such a thing and use it as an incubator for new start ups.
Jason: Development of start-ups is an important part of the development of the Queensland Games community. i.lab is a technology incubator that is used by Queensland Games start-ups. It was established by the Queensland Government in 2000. Its purpose is to facilitate the development of high technology companies by providing space, mentoring, business plan development, assistance with access to finance and other market support. i.lab provides the infrastructure and resources to assist up to 30 emerging companies at any one time as well as a network of external members that offer “virtual incubation” giving businesses the flexibility to choose where they work from – while still being able to access the full support and benefits.
A current i.lab participant is Moket. Moket, which started as a one man company when it entered i.lab is now considered a global leader in creating innovative and engaging mobile entertainment products using the Adobe Flash Lite platform. The networks of i.lab coupled with the quality of the development by Moket has lead to it having Nokia, Smashing Ideas, Shockwave Atom and Adobe as key customers.
Liquid Animation, one of the leading animation and digital production studios providing concept, design and production services for film, television and the Internet, is an alumni of i.lab.
In addition, The Creative Industries Precinct in Brisbane is Australia’s first site dedicated to becoming an internationally-networked hub of creative experimentation and commercial development in the creative industries. It provides a unique opportunity for designers, artists, researchers, educators and entrepreneurs to easily connect and collaborate with others to create new work, develop new ideas and grow the creative industries sector in Queensland.
The $60 million site boasts some of the most advanced digital facilities to support the creative work undertaken and some of the most exciting partners in identifying the next generation of ideas, including the Australasian Cooperative Research Centre in Interaction Design. Facilities include the Enterprise Centre, computing studios for animation, virtual reality, visual arts and design technology; media labs for music and sound; newsrooms for radio, television, on-line and print production; design studios for drawing, CAD scenic/lighting design, 3-D modeling and fashion and textile design; film and television studios and post-production facilities including QUT’s professional television unit; and production workshops for set construction, 2-D and 3- D production and props making.
In addition to i.lab and The Creative Industries Precinct, Queensland Games has a strong mentoring community, where experienced developers provide advice, support and linkages to key international players for start-up companies. New casual games developer 3 Blokes Studios, recently had a top 10 download hit on iWin for their first game “Magical Forest”. 3 Blokes Studios, who initially intended to develop “the next big MMO” attributed a lot of their initial success to the assistance and guidance provided by senior members of the Queensland Games community.
The success of the incubator projects has prompted the Queensland Government to consider creating a specific Queensland Games incubator space and formalized mentoring program. The space would allow start-ups and recent college graduates to develop games in a supportive environment with access to local and international mentors.
The Queensland Games website is currently entering stage two of its development. The website will be use to promote local companies and their products and to encourage further collaboration between the local developers. Queensland Games is constantly looking at ways for local developers to work together on projects and the provision of tools and infrastructure. Currently there are discussions under way looking at co-location opportunities for smaller companies and the establishment of a local motion capture facility.
DFC: Montreal has been very successful in incubating “3D” into a regional hot bed for development companies for a number of industries: gaming, film, and military. Have you looked at any other regional industries that might make for good partners to cross-collaboration and developing 3D beyond games for the region? For example, there are government agencies heavily involved in promoting biotech for Queensland as well. Have the two agencies collaborated in areas where 3D visualization might add to the region’s overall unique graphic capabilities that might make for a way to differentiate itself as a hub for the graphics development community.
Jason: The skills and technologies being used in the new creative media industry in Queensland are also having important roles in other industries. Some examples include the development of global navigations and transit technologies, biotechnology and nanotechnology research and development, e-learning and even aquaculture. However, the some of the biggest cross-over of technologies and skills has been in two of Queensland’s largest industries: mining and aerospace, especially in training and education.
China and India’s emergence and demand for natural resources has lead to a recent boom in the Queensland mining industry. Queensland’s mining and mineral processing industries contribute close to A$25 billion to the state’s economy and an estimated A$5 billion was contributed by the mining services sector. New creative media technology and advanced technology development such as robotics, satellite imaging and 3D visualization have had a significant role to play in maintaining Queensland’s global competitiveness, in minimizing the environmental impact of mining activities and in ensuring the health and safety of workers.
The Queensland Government has facilitated and supported the establishment of world-class R&D infrastructure and facilities in Queensland to assist the industry. These include the Queensland Centre for Advanced Technologies, the Cooperative Research Centre for Mining, the Process Engineering and Light Metals Centre in Central Queensland and the University of Queensland’s Sustainable Minerals Institute. At the private sector level, 5DT (Fifth Dimension Technologies), the native South African company based in Brisbane which has developed data gloves and other hardware for the new creative media industry also develops virtual reality hardware and training systems for the mining industry. Their virtual reality simulators are being used by the Mining Industry Skills Centre to help enhance the skill levels of miners as well as other key education and training providers such as the Australian Defense Simulation Office.
With over 1,000 companies associated with commercial airlines, general aviation and defense activities, Queensland is also regarded as the emerging centre for Australia’s aerospace and general aviation industry. Part of the reason for this emergence has been the development and use of new creative media and other advanced technologies in civil aircraft and component design, manufacture, modification and repair, as well as all levels of technical and services training and education.
The Queensland Government is also working closely with new creative media and educational providers to increase industry based training such as pilot training. Current forecasts suggest over 35,000 commercial pilots will be required in the next 20 years in China alone.