Australian game development has potential to grow as an export industry

- December 21, 2016 2 MIN READ

Australia’s game development industry has massive potential for growth as an export industry, according to an independent survey by the Interaction Games & Entertainment Association (IGEA) and Games Development Association of Australia (GDAA).

The survey, which questioned Australia’s local game developers, revealed that 81 percent of the local game development industry’s $114.9 million total revenue was derived from overseas markets in the 2015-16 financial year.

According to the survey, Australian-developed games were popular across most markets, although the largest pool of revenue came from Asia, the United States and Europe.

Developing intellectual property is key to the potential of the industry, as it was found that at least half of the respondents were independent game developers, while an additional 42 percent developed both their own IP while providing external development for clients.

Looking internally at their businesses, 78 percent of Australian game developers project growth in the next financial year, with nearly two-thirds planning to add extra staff.

The Australian industry employed 842 people in the 2015-16 financial year, with the survey finding that existing developers valued a relevant degree as much as workplace experience.

Speaking about the survey’s finding, GDAA CEO Tony Reed connected the success and future growth of the industry to the “intensely creative” and “highly technical” staff behind each game developer.  

“By supporting the industry and fostering this combination of skills, game development can contribute to the economy in a significant way,” said Reed.

IGEA CEO Ron Curry added that the increasingly wide reach of industries that games are able to impact, beyond just indulging entertainment for the average consumer, forms part of their financial success.

“With global revenue for games expected to reach $US98 billion in the next two years, the game development sector is exactly the kind of jobs-of-the-future, innovative, technology-based industry that will help build a strong and viable Australian export sector,” said Curry.

In recent years Australia’s gaming industry has received formal support from the government with the introduction of the Interactive Games Fund under the Labor government in 2012, which the IGEA believes caused a spike in game development businesses.

The fund birthed a number of game development studios before being axed by the Liberal government in 2014, helping form 24 percent of today’s current developers in 2012 alone.

Only 14 percent of current developers were formed the year the budget was cut, a 10 percent drop which the IGEA attributes directly to government’s actions.

Funding has been a core issue impacting the growth of the gaming industry in Australia for some time, with Sydney developer Team Bondi, which created popular gaming title ‘LA Noire’, closing down in 2011 due to management and financial issues. As of 2012, LA Noire has sold over 5 million copies worldwide.

The survey results reinforced this idea, as current developers reported that attracting investment opportunities for expansion as well as early stage funding was difficult and “stressful”.

Last year a Senate Inquiry was held to investigate the future of Australia’s game development industry. The inquiry was delivered in April this year with bipartisan support and put a number of recommendations forward to help support the growth of the industry, although no federal action has been taken to date.

The report also revealed that Melbourne was the central hub for game development, with 51 percent of developers located in the capital thanks to Victorian Government support for the industry.

Image: Riot Games Australia. Source: Riot Games, Glassdoor.