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Senate inquiry: Australia should be backing video games

The Senate Inquiry into the Australian video game industry has found that it's an industry that's only going to rise -- and the government should be backing it.

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Funding the video games industry in Australia could only be beneficial to the country, a Senate Inquiry led by Greens Senator Scott Ludlam has found. The report, which was released today, recommends that the Australian Government introduces a funding scheme for game developers, as well as tax offsets and other benefits.

The Inquiry was implemented last year after the 2014 Budget removed the Australian Interactive Games Fund, AU$20 million in funding introduced in 2013 to promote and nurture the local games development industry.

"Five years ago, Australia had a burgeoning video game development sector employing thousands of talented people in this rapidly growing industry," Senator Ludlam said last year.

"Internationally, companies have experienced strong growth thanks to smart government support and favourable regulatory settings. In Australia, no such luck: the sector has been treated like the poor cousin of the creative industries, culminating in the Abbott Government's decision to close the $20 million Australian Interactive Games Fund, just 12 months after it was established."

In 2014, the video games industry was worth $77 billion globally, according to Ron Curry of the Game Developers' Association of Australia, and is projected to reach $96 billion by 2018, a growth rate of nearly 10 percent annually. The film industry, in comparison, was worth $107 billion in 2014 with an annual growth rate of 4.4 percent; and the music industry is expected to reach $52 billion by 2019, with an annual growth rate of 0.8 percent.

But, although the local market for consuming games is growing, increasing 20 percent from 2013 to 2014, the size of Australia's video game development industry has decreased. Although the number of studios increased from 45 to 84 from 2007 to 2012, the number of people employed in the industry has fallen from 1,431 to 581, and total income has fallen from $136.9 million to $89.4 million.

This was partially due to the closure of major studios in Australia due to the global financial crisis, including Pandemic, THQ, Team Bondi, EA's Visceral Games and others. The Australian Interactive Games Fund was announced in 2012 as a means of keeping the industry healthy and growing. It was also designed to be self-sustaining: Developers given grants over $50,000 would be expected to pay back those grants into the fund for a new round of grants, once their games were successful.

By restoring a similar fund, the report argues, the Australian video games industry could flourish, becoming a genuine asset to the Australian economy. But the time to act is now.

"These are the creative industry jobs of the 21st Century. This industry is innovation manifest, on every screen on the planet." Senator Ludlam wrote in an op-ed for gaming website Kotaku.

"The industry is growing rapidly. It's charging into new markets and competition from around the world is only going to get more intense. The opportunity for Australia to establish itself as a global leader in the industry is not going to last forever."

You can download the full report on the Parliament of Australia website.