Although state support, in the form of tax credits, for a particular industry does not guarantee growth in that industry, no one can dispute the success of Georgia’s efforts to lure film and television projects from Hollywood. Movies such as “The Blind Side,” “Hall Pass” and “Zombieland” and television shows such as “The Vampire Diaries” and “The Walking Dead” are just some of the projects made in Georgia since the passing of the Georgia Entertainment Industry Investment Act in 2008.
But the incentives have also spawned a related industry: video gaming. There are more than 75 companies in this industry in Georgia. Companies range from household brand names like Turner Broadcasting System and Cox Communications to less mainstream brand names that are no less successful such as Hi-Rez Studios, Kaneva, Tripwire Interactive and CCP North America.
Venture Atlanta recently interviewed Asante Bradford of the Georgia Department of Economic Development about Georgia’s emerging gaming industry. Besides pointing out the state’s many attractive attributes including favorable cost of living, ease of access to U.S. and international destinations, climate, cultural diversity, healthcare and excellent educational institutions, most of Bradford’s responses were not unexpected but he did offer useful advice to legislators.
1. What is the Georgia Entertainment Industry Investment Act?
On May 12, 2008, former Governor Sonny Perdue signed into law the Georgia Entertainment Industry Investment Act, boosting the state tax credit for qualified production and post-production expenditures by as much as 30 percent. It is available not only to traditional motion picture projects such as feature films, television series, commercials and music videos, but also innovative new industries such as game development and animation.
The Georgia Entertainment Industry Investment Act offers an across the board flat tax credit of 20 percent based on a minimum investment of $500,000 on qualified productions in Georgia. An additional 10 percent Georgia Entertainment Promotion (GEP) uplift can be earned by including an imbedded animated Georgia logo on approved projects.
2. How may game developers from out of state take advantage of it?
We haven’t seen much activity from out of state companies or game developers. However, in the last few months, some companies have been or are looking to hire development teams in Georgia to complete the project and get the credit.
3. Who are the success stories in video gaming to date?
- CCP Games, Iceland-based game developer and publisher, established its North American headquarters near Atlanta in Stone Mountain. CCP’s titles include the massively multiplayer online game Eve Online™ and future MMOG, World of Darkness™.
- Alpharetta-based Hi-Rez Studios™, is an independent developer of online entertainment. Their titles include Global Agenda™ and the newly acquired TRIBES.
- Turner’s Cartoon Network has launched FusionFall, the first AAA browser-based MMOG which takes kids on a 3D online adventure to defend the Cartoon Network Universe.
- Kaneva™, combines a social network and a virtual world, bringing entertainment to a 3-D realm in a modern-day, online digital world.
- Red Orchestra ranks as one of the most played PC Multiplayer games in the world. Roswell-based Tripwire Interactive has proven, with hard work, determination and great distribution partners, independent game developers can still make a big splash in the gaming industry.
4. How would you characterize the state of the video game development industry in Georgia?
Digital media and entertainment software are significant elements of the creative economy in Atlanta. Gaming also has an impact on tourism, as several gaming-specific conferences help bring visitors and tourist dollars to the state. The lines of separation between much of the creative economies are blurring, as music, film, and video games are increasingly “mashed-up” under the broad digital entertainment umbrella. To the extent that each has a strong local presence, the opportunity for synergy and overall growth is enhanced. This in turn enhances the ongoing appeal for a proverbial creative class, including both existing and potential residents.
5. What are the top three challenges and what role is the state playing to overcome these?
The video game industry has grown into a vibrant business that creates thousands of jobs, improves the performance of other industries, and spurs technological advancement. Policymakers should be cognizant of the industry’s importance to our country’s economic future, and they should seek opportunities to ensure its continued ability to innovate and grow.
From an educational perspective, gaming can require an unusual skill set that does not fit neatly into traditional academic disciplines, creating challenges in adequately preparing a labor force. Meanwhile, money and markets are concentrated elsewhere which means that Georgia can tend to suffer from being off the radar screen.
These areas (educational infrastructure and market development) should be a point of focus for ongoing efforts to develop the industry in Georgia.
1. Assist with putting emphasis on workforce development.
2. Consider connecting at least a portion of tax funding for a Georgia Digital Entertainment Incubator to create a greater presence related to entertainment software.
3. Assist those interested in working with venture capital and angel investor networks to find ways to get them to invest in Georgia digital media companies.
6. If investment capital is the oxygen that breathes life to video gaming start-ups, what is being done to attract capital? What more can be done?
As with any industry that creates intellectual capital, the barriers to relocation are low. Communities, countries, and regions all over the world are actively competing to attract and retain firms in this sector.
7. What are the top three reasons why investors need to consider Georgia for their next investment opportunity?
Industry leaders state that availability of talent outweighs cost of business considerations. However, local incentives being offered may affect decisions for new projects. The cost of business is one of the only factors that public entities can influence in their efforts to attract and retain Interactive Media businesses, making it a relevant and important factor in determining regional competitiveness.
It is clear from the number of movies being filmed in Georgia that tax incentives do affect producers’ decision on where to locate their next project. However, the dynamics are different in the gaming industry and state incentives are but one of a host of factors. There is still the matter of the availability of investment capital and a creative talent pool. We have made progress but have a ways to go in evolving a sustainable and vibrant gaming industry.
October 2011 Newsletter
- Georgia’s Game Industry is Growing Up
- MONEY BIN: Q+A with the Georgia Department of Economic Development’s Asante Bradford on the Video Game industry
- SPARKS: Tripwire Interactive
- NOTEWORTHY: Economic Development Drives Game Development