Part of the Federal Government’s 2021 Budget will be heading to Australia’s games sector, enabling developers to better compete on the world stage in an industry poised to be valued at over $250 billion by the year 2023.
The Government’s Digital Economy Strategy, aiming to boost Australia’s digital landscape with a $1.2 billion plan, will introduce a tax offset policy for video game development. From July 1, 2022, a 30 per cent refundable tax offset will be made available to attract talent and promote a quickly developing export industry.
The offset is to be made available for eligible business spending a minimum of $500,000 on what the Government calls “qualifying Australian games expenditure.” The criteria for what exactly qualifies will be determined by consultation with industry figures in mid-2021, although the Government has explicitly stated that “Games with gambling elements or that cannot obtain a classification rating will not be eligible.”
The tax offset is not aimed solely at game developers, with digital capabilities deemed to also be transferable to a number of sectors – including defence innovation, medical technology, emergency planning, construction and modern manufacturing, among others.
An applauded play
The move is being welcomed by Australia’s games industry, which has been calling for Government support for over a decade. Interactive Games & Entertainment Association (IGEA) CEO Ron Curry said the offset shows that video games are finally being recognised by the Government as being on par with the TV and Film industry, screen sectors that have long benefitted from support.
“The Government’s new investment commitment today will do many things. It will spur the creation of brand-new Australian game development studios, give existing Australian studios the support they need to take on ambitious new projects and accelerate their growth, plus attract further blockbuster AAA studios to Australia, all of which will create game development jobs in every state,” Mr Curry said in a statement.
“This new federal investment will underpin a new wave of Australian video game development, leading to even more amazing Australian-made games to take to the almost $250 billion global video games market – which is arguably the largest entertainment market in the world – and bring new Australian voices and stories to a truly global audience.”
Roger Clarke, Chair of IGEA and Managing Director of Koch Media, echoed Mr Curry’s sentiments.
“It is clear from today’s decision that the Morrison Government has noticed how innovative and successful Australia’s game developers are, as evidenced by standout titles like Big Ant Studio’s AO Tennis 2 and SMG Studio’s Moving Out, to the amazing local independent studios like Mighty Kingdom and Hipster Whale who are exporting their games and services around the world, as well as the investment being poured into the Australian economy by international studios such as Sledgehammer Games, Gameloft, Wargaming, and Firemonkeys.
“I thank the Morrison Government for engaging with and listening to IGEA, who have been relentlessly advocating for government funding for Australian video game development for years, and the talented Australian video games industry that it represents. With this new support, there is an incredibly bright future for Australian game developers and the wonderful games and experiences they create”.
Australia’s gaming industry was one of the few industries that managed to find success during the pandemic, growing to $3.4 billion in 2020 – around a 6 per cent jump from the year prior. The Australian Entertainment Media Outlook report from PwC found that the three billion-plus in gaming and esports revenue showed Australians are “one of the highest per capita spenders on video games in the world.”
Keep up to date with Dynamic Business on LinkedIn, Twitter, Facebook and Instagram.
