State of the Australian Video Game Industry

In 2011, the world saw the release of La Noir, a game set in 1947 Los Angeles with players taking the role of LAPD Detective Cole Phelps.

It was a critical and commercial success – earning praise for its innovative gameplay and excellent production value. It topped the UK game chart for three weeks and became the best-selling game of May 2011 in the United States.

Here was a game where the main character had a gun, but wasn’t supposed to use it; where you played a detective who did actual detective work. Interviewing witnesses, investigating crime scenes and interrogating suspects â?? reading their realistically animated facial expressions for clues â?? was the name of the game. Add to that a look and feel reminiscent of classic films, like LA Confidential, and it seemed clear that Sydney-based studio Team Bondi was one to watch. Fans eagerly anticipated their next move.

But several months later, Team Bondi had closed its doors and declared bankruptcy. A seven-year development period for La Noir and poor leadership at the studio were cited as reasons for its downfall, but to many is was just indicative of the poor state of the Australian video game industry.

Team Bondi is just one of several Australian studios to have shut down in the space of a few months. THQ-owned Blue Tongue Entertainment and the Melbourne branch of Dead Space developer Visceral Games join them on the casualty list. The closure a year prior of Spyro the Dragon and Star Wars: The Force Unleashed developer Krome Studios, and of the Pandemic Studios Australian branch a year before that shows this isn’t an isolated case.

Overseas Publishers Discouraged from Investing in the Australian Market

In 2010, Australian consumers spent 1.7 billion on video games, and statistics indicate the target market in Australia to be as diverse as anywhere else, with just under half of its gamers being female compared to 38% in 2005, and the average age for gamers raised to 32 years old (www.inaglobal.fr).

Yet, a lack of incentives and a number of aversions make the Australian market unappealing to overseas investors. These include:

•  A high Australian dollar, making video game development more expensive in Australia then it would be in other places.
•  Lack of tax incentives. Tax breaks for the industry in the UK and Canada make them epicenters of video game talent.
•  An out-of-date Australian content rating system that classifies games as suitable for aged 15 and up but lacks an 18+ rating. Games deemed suitable only for age 18+ risk being banned. In 2009, this almost resulted in game-of-the-year award winner Fallout 3 being denied to Australian gamers â?? Bethesda Entertainment eventually altering the content to earn the 15+ rating.

The ultimate result is big international video game publishers assigning Australian studios mediocre projects, primarily movie tie-ins, without granting them any of the sought-after Triple A titles (Triple A being the term for highly anticipated and heavily marketed releases). With the video game industry as a whole becoming increasingly hit-focused, those middle-ground projects that fall between the triple A titles and cheaper mobile games are unlikely to prove profitable.

Strategies for Growth

Australian game developers feel the industry requires greater support from their government. According to theconversation.edu.au, the film and television industries have always received more funding due to the higher number of employment opportunities they create, yet greater investment in the video game industry could establish it as a source of jobs and revenue. Australia may only represent 2% of the world market, but one of the benefits of being an export-based business is the potential wealth of foreign money flowing into the economy.

The ‘Film Victoria’ organization is a step in this direction. It was established by the Victoria state government to support film, television and digital media industries, and aids Australian developers in pursuing local talent and the creation of original franchises to follow the example set by LA Noir.

Additionally, Australian developers feel that starting small by exploiting the rising popularity of mobile games could aid the industryâ??s growth. They require fewer resources to make but draw in great revenue, and so are ideal for small developers to establish a foothold in the industry. Proximity to the highly profitable Asian gaming market is another factor Australian developers have yet to take advantage of.

Examples such as LA Noir prove the Australian video game industry has much to offer. Itâ??s hoped that once the correct measures are taken, Australian developers will at last have the success to match their notable contributions.

This guest post was written on behalf of Now Learning by Matthew Flax. When he has time to spare after part-time accounting and freelance writing, Matt is an avid gamer. Now Learning promotes online and classroom-based education in Australia, including degrees, diplomas and short courses.