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The Interactive Games and Entertainment Association (IGEA) is lobbying the government to establish a direct funding program similar to the now-defunct Australian Interactive Games Fund in order to support independent game developers.

In a pre-budget submission penned by CEO Ron Curry, the organisation advocates for funding of $5 million a year for four years that would be administered by Screen Australia, and available to those in the industry ineligible for the 30 per cent Digital Games Tax Offset (DGTO) announced as part of last year’s budget.

Under the DGTO, due to take effect from July 1, eligible businesses will required to incur a minimum of $500,000 per game on qualifying Australian games expenditure, while the maximum offset a developer will be able to claim in each year is $20 million.

While Curry notes the already positive impact of the offset initiative, which has included up to $320 million of publicly disclosed investments from Australian studios since the announcement, he says a crucial part of the funding ecosystem was still missing.

“Currently, smaller developers, constituting the majority of Australian studios in terms of sheer numbers, lack access to direct assistance for games production,” the submission states.

“Like budding film and TV producers, game developers have difficulties obtaining financing through traditional capital markets (like banks), creating products, and reaching audiences.

“Direct funding will address this and ensure the success of smaller studios, helping them transition into medium to larger studios.”

The push for direct funding comes more than seven years after the previous fund was terminated as a result of budget cuts to Screen Australia.

The sector has since experienced widespread growth, both domestically and internationally, doubling its revenue to $226 million since 2016.

Acknowledging the trend, South Australia became the first state to extend its 10 per cent post-production, digital and visual effects (PDV) rebate to cover video game development in 2020.

Following the announcement of the federal offset in May’s budget, the NSW and Queensland state governments subsequently adjusted their PDV rebates to include game development.

The Federal Government also announced last month that it would be provide an additional $19.6 million over two years from 2023 to expand the 30 per cent Digital Games Tax Offset so that it covers ongoing development work – known as ‘live ops’ – on digital games following their release.

Find the full submission here.

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