Tim Watts (Gellibrand, Australian Labor Party, Shadow Assistant Minister for Communications and Cyber Security) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes that:

(a) video games are a large and growing market—Australians spent $3.6 billion on games in 2019, more than double the amount they spent in 2012;

(b) video gaming is a mainstream activity—two thirds of Australians play video games with an average age of 37; and

(c) globally, the video game industry generates more than double the revenue of the music and film industries combined; and

(2) recognises that:

(a) Australia is home to a talented community of game developers and publishers, but proportionately the Australian industry is much smaller than its peers in New Zealand, Canada and the United Kingdom;

(b) video game development provides remote working opportunities and jobs for the regions—in the UK, 55 per cent of video game industry employment is outside of London and the south-east;

(c) the video game industry provides a variety of jobs—in Australia, 34 per cent are software programmers, 19 per cent are artists and 11 per cent are business or marketing professionals;

(d) the skills developed in our domestic video game industry are transferrable into roles in adjacent innovative and growth industries like cyber security, software engineering and data analytics; and

(e) video games could help drive the post-COVID economic recovery in Australia, creating jobs and expanding a significant export market.

I'm pleased to move this motion in support of a high-skill, high-wage, high-growth industry that needs to be taken more seriously here in Canberra. Globally, this is an industry that has generated $250 billion worth of revenue in 2019. That is more than double the revenue generated by the global film and music industries combined. But here in this place, it's an industry that is often overlooked. Research from the Interactive Gaming and Entertainment Association, the industry peak body, shows that income generated by Australian games studios in 2019-20 totalled just $184.6 million. But this is potentially a billion-dollar industry for Australia and a source of jobs with skills that are transferrable into other high-wage, high-growth industries, like cybersecurity and software development. It could be a huge source of jobs growth and direct foreign investment into Australia as we begin our post-pandemic economic recovery.

Labor has seen this prospect for some time. We established a $20 million interactive games fund in 2012 when we were last in government. The Abbott government abolished it after just six months as part of the 2014 budget. We all remember that budget shortly after them coming to power. It abolished that fund with only half the money spent. Since that time, the Australian video game industry has had no federal support at all—none. This is despite four separate parliamentary committees making bipartisan recommendations that the industry be backed in by government. Two Commonwealth agencies have also recommended federal government support for the industry. Austrade recommended that video game development be included in the refundable 30 per cent post digital and visual effects tax offset.

Like things with the Morrison government, the states have been left to pick up the slack. Victoria, Queensland and South Australia all offer funding or tax incentives for video game development. Victoria, whose grant development program is now in its sixth year, has become the game development capital of Australia, thanks to the Andrews government support. In fact, half the industry is located in my home state of Victoria. I recently had the privilege to tour the studios of the Big Ant video game development company, makers of AO Tennis and Cricket 19, with the local member, the member for Macnamara.

It is important to note today, given the events happening outside this building, that women are underrepresented in STEM generally, and the gaming industry is no exception. Thanks to groups like The Working Lunch, the Girl Geek Academy, Women Who Code and SheHacks, this is an issue that is being tackled head on. These groups do vital work to address female representation in gaming and STEM more broadly but there's much more that we should be doing to help them as leaders and as a government.

This is an industry that we need to grow as an ecosystem. In 2019 global revenue from eSports—the viewing, the broadcasting of people playing games—was a $1.1 billion industry in itself and is expected to double by 2023. Unfortunately, in Australia, our share of that eSports revenue was just $5 million in 2019. We love our sports as Australians and during COVID-19, when holding live sports wasn't possible, many of the big leagues in the world switched to eSports tournaments. I know that V8 Supercars did with some success. PwC believes that, if we continue on this path, Australia's total eSports revenue could reach $12 million by 2024, but I think with the right federal support we could grow the domestic industry and take an even bigger slice of this global billion-dollar pie.

Despite the Australian video game industry punching above its weight globally, we are at serious risk of losing this potential billion-dollar growth development industry. As Interactive Games and Entertainment Association CEO, Ron Curry, notes, 'Every other developed nation in the world has government incentive packages in place for game developers. Everywhere except Australia.' The UK and Canada both have generous tax incentives to attract developers and to build a competitive industry. Our neighbours across the ditch recently announced $10 million to support the industry and have a target of a $1 billion industry in New Zealand within 10 years. They've got the vision across the ditch; we need the vision here in Australia.

The New Zealand industry employs roughly half the number of workers but produces double the revenue of the Australian industry; they aim high. Dylan Miklashek, the Brisbane head of the French mobile game company Gameloft, said in an interview with The Age recently:

Our salaries and cost of living are similar to Montreal or Vancouver. But the cost of our studio, because we don't have these incentives, is 30 to 40 per cent more.

… you can't be 30 to 40 per cent better than a studio that's in Montreal, which has that incredible ecosystem.

We need the Australian government to back in Australian video game developers and the high-wage high-skill jobs they create. It is this disadvantage—a lack of government support that the Australian industry faces globally—that we have to address here in this chamber. That's why I established the Parliamentary Friends of Video Games with Senator McGrath in the other place and it's why I'm introducing this motion today.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Is the motion seconded?

Susan Templeman (Macquarie, Australian Labor Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

James Stevens (Sturt, Liberal Party) Share this | Link to this | Hansard source

It's a pleasure to contribute to this motion talking about the importance of the gaming sector, and I would like to slightly broaden my comments to include the creative industry sector as a whole. It is a great honour to have the South Australian Film Corporation based in my electorate and great companies like KOJO very involved in the postproduction and visual effects sector, which is of course what underpins the gaming sector and many others. South Australia has a great history and heritage in the creative sector, and we've got this unbelievable confluence of the creative sector coming together with other sectors like the defence sector and the cyber sector, where so many of these skills are required into the future. It's definitely going to be an enormous growth sector, and the most important thing for us in this sector is to make sure we're getting the workforce training right. And that's why we've got to talk about all these sectors in a combined way.

It's very exciting in South Australia because the two major naval shipbuilding projects both have an enormous amount of workforce requirements and therefore training and expertise from the companies in the area of virtual reality. We've got both of the programs operating on effectively a virtual shipyard platform. So the submarines and frigates will effectively be designed with people who have the same skill set who are needed to contribute to the gaming sector. Instead of the old blueprints and the big sheets of paper on the boardroom table, everything is now in the computer, in the cloud, on the device that you might wear for virtual reality representation of all the different elements of these boats that are being built. So it's a really exciting time in South Australia for the gaming industry because we've got the workforce requirements that are dramatically increasing, and of course there will be a spectacular cross-pollination between the workforce requirements in defence, in cyber, in the film sector—streaming—and the gaming sector.

I would like to give a quick shout-out to a couple of great companies from Adelaide, Mighty Kingdom and Team Cherry, who are already doing excellent work in the gaming sector. And I mentioned KOJO before. They are based at Kent Town in my electorate. There was a famous game called Mortal Kombat, and that movie has been made in South Australia. KOJO were enormously involved in the post-production, colouration et cetera of that, and I'm really excited about the premiere of that very soon. That's a company that is in an allied sector to gaming and is doing excellent work in developing that skilled workforce in South Australia to contribute more generally to the creative industry sector.

There is already good support for the gaming sector from both the Commonwealth government and the state government. The state government in South Australia, which the mover of the motion mentioned, has a rebate scheme in place for gaming. Obviously these rebate schemes are helpful; I don't disagree with that. But also at the Commonwealth level we are doing a lot of things generally—tax incentives, R&D incentives, export market development grants et cetera—that are opportunities for the gaming industry to use that Commonwealth support to access export markets. I see a very exciting future for the gaming sector and probably the creative sector in this country and in particular in South Australia.

As I say, we've got a whole range of things coming together at once that can provide some critical mass in this sector. It's a huge sector. As has already been pointed out, it's much bigger than the film and music industries combined. That's why we need the industry economies of scale and the workforce capabilities in place as well as support from the state and Commonwealth governments to see this industry grow. I'm very confident that it will. The mover mentioned eSports. Again, I know that in my home state, with the upgrade of the tennis facility on Memorial Drive, there's going to be the capability of holding major eSports events at that venue. We're building the venues and the infrastructure. We're making sure that we're training the workforce. The support is in place across the state and federal governments to give this sector, and the creative sectors more broadly, the opportunity to thrive. There are exciting milestones on the horizon. I can see this being a sector that is going to grow very significantly over the next few years and decades to come, and that's thanks to the support and the programs of the Commonwealth and state governments in South Australia and Australia.

Susan Templeman (Macquarie, Australian Labor Party) Share this | Link to this | Hansard source

One of the things that helped people get through the lockdowns was video games. This was a sector that was remarkably resilient throughout COVID, even as restrictions lifted. But I want to start by busting some myths about who plays video games. More than two-thirds of Australians play video games, including 62 per cent of all working-age adults. That's from the latest data from the Interactive Games and Entertainment Association. Seventy-eight per cent of players are 18 or older, and 50 per cent are women. Nearly 40 per cent of people are over 65, so get rid of the idea that this is just kids in their rooms avoiding doing their homework. One of the reasons people say they play games is because it contributes to their emotional wellbeing. Sixty-seven per cent say it helps maintain social connections, and, interestingly, around 42 per cent of people who are playing say it keeps their minds active. This is something I see played out in my electorate of Macquarie. I met Bruce recently in the Blue Mountains. He's in his 80s. He sees playing video games as a challenge. He's a former school principal. He gets that it keeps his mind engaged, active and sharp, especially as he has lost his wife and lives at home on his own. The other benefit that we know people have seen during COVID was revealed by Steven Conway, who is a senior lecturer in games and interactivity at Swinburne University of Technology. He says there's been an increase in people recognising that you can use games to improve your fitness and to be social. So let's be clear about the sector we're talking about: it appeals to a wide range of people.

As much as I'm interested in the individual benefits of video gaming, it's the economic benefits that I want to focus on. It has huge potential for growth in our market—not as players but as developers. The last three Liberal governments have missed a massive opportunity to support this industry, and it's left us with an extremely small share of the global market, which is worth around $250 billion. The IGEA says game developers in Australia are unnecessarily disadvantaged. Every other developed nation has a government incentive package for game developers except Australia. I saw this with my own eyes when I visited Estonia, Finland and England in 2019. Scandinavia has deliberately set policies that expand its gaming industry, and it has expanded in a few short years. In Estonia, between 2014 and 2018, the number of game development businesses in this tiny country grew from 15 to 83 companies, and they began hosting major international game development conferences like Game Dev Day. They do hackathons for video games. They built a community that supports novice developers, which is something that we haven't nailed in Australia.

In Finland I visited Angry Birds maker Rovio and talked about what had led their industry to take off. The last five years has seen the Finnish games industry almost breaking the two-billion-euro turnover barrier, with more than 290 games companies established—companies that really help each other out. And there's a public funding base, which allows risk-sharing and private investment in the games business. In the UK they use tax incentives to recharge the game sector. What's important to note, especially for my electorate on the outskirts of Sydney, is that more than half the jobs in the UK sector are outside London and the south-east. They're spread across the country. New Zealand has a package. Canada has a world-leading package. There are models around the world of what we could be doing, but we're doing almost nothing.

In 2013 Labor launched the $20 million Interactive Games Fund, but it was shut down by the Abbott government the following year. We took another policy to the last election with a similar commitment. Two committees of this parliament have recommended support for the sector, but they have largely been ignored. There's some support at some state levels—in South Australia, in Victoria and a little bit in Queensland. Who would benefit from the growth in this sector? It's not just the games creators but it's also the software solutions people, the designers, the publishers and the advertising businesses.

I had a local independent game developer in the Blue Mountains last year reach out to me, looking for support to get the marketing in place for a game he spent four years developing. The support and ecosystem is lacking. The universities can benefit from it with programs and modules directly related to the games industry. Of course, it flows over into cybersecurity and the film and animation sector. It creates jobs and it builds our exports. We are missing a huge opportunity. We need to see an absolute package of support for this sector from this government.

Pat Conaghan (Cowper, National Party) Share this | Link to this | Hansard source

When I saw this motion, I was not surprised that the member for Gellibrand was a gamer. He falls right into the middle section there.

An honourable member: It's a compliment.

It is a compliment. I thank him for putting this motion on. You only need to look at today's The Australian newspaper article 'Richest 250 2021' where it says:

Meet Laurence Escalante of Virtual Gaming Worlds, the fast car-obsessed new tech billionaire.

He's a young Australian—once a Hungry Jack's burger flipper earning $5.95 an hour in his teenage years, now he's at the helm of Australia's tech unicorn success story and vaults into the business billionaire ranks for the first time. Sadly, despite being Perth based, all revenue is derived outside of Australia, mainly in northern America. This is why this motion is so important. That's only one of many, many stories.

Regularly, even teenagers are making millions of dollars through their knowledge of gaming and through their knowledge of information technology. Even in my area, some time ago through the New Enterprise Incentive Scheme, approximately five years ago three businesses in my electorate applied for grants under that scheme and one of those was Port Macquarie David Kinney. He had a passion for gaming. David had an idea, but wasn't sure how to turn his dream into reality, but that all changed when he applied under this scheme and it provided support, including training, mentoring and income for job seekers who wanted to start their own business. He's now a very successful businessman who continues to engage and produce material for those looking in the gaming industry.

In addition—and this is a very recent and wonderful program—I spoke to two young people in my electorate up in Coffs Harbour through the apprentice and scholarship organisation BUSY At Work. One of the businesses participating in the Commonwealth scholarship program is Tech Addicts. The director, Bec Donoghue, tells me that Tech Addicts is a Coffs Harbour business that builds, repairs and creates IT and technology solutions. They opened to serve the gaming community but soon opened a business arm that now provides support to businesses around the area. Bec was approached by Jen Smith, the regional scholarship coordinator of BUSY At Work. She was enthusiastic about being a part of the program.

A 17-year-old Dane who I met is a scholarship recipient from the 2020 program. Last year, he completed his Certificate III in Information, Digital Media and Technology at TAFE, and now he is full-time employed in the area.

Another recipient to receive the scholarship is Evan Mcdonald. Evan received his scholarship to study a Certificate IV in Digital and Interactive Games and has just re-applied to do the diploma. He is doing a paid internship working on social media presence, photography styling and website design with The Woodcraft Gallery in Bellingen.

These are examples of this government's understanding and willingness to help businesses do what they do best, and that is operating and employing young people and getting them to succeed in life. But governments at all levels do need to do more. We have some very intelligent young people out there. We have kids who think of ideas that we could never imagine. As a proud father, I will give one very quick example. My 13-year-old came to me at Christmas time and said, 'Dad, I want to build a computer.' I thought it was a bit of a joke and said, 'You go and get a list of the parts and we'll talk about it.' Well, off he went and got a list of the parts, and he bought them online and built a computer. This is the pool of talent of young people that we have in our communities across Australia that we need to support. We need to work with them and engage them so that we can ensure that Australia is a leading nation, like the Netherlands and Switzerland, and ensure that there is a future for our young people.

Josh Burns (Macnamara, Australian Labor Party) Share this | Link to this | Hansard source

I'm very pleased to rise to speak on the motion moved by the member for Gellibrand on the Australian gaming industry. But, before speaking to the motion on the Australian gaming industry, I want to put a couple of things on the record. The member for Gellibrand and I have had a couple of battles, we have had a couple of games—most recently in this building, when the Parliamentary Friends of Video Games had a competition here. One of the great local stories of the Australian gaming industry, Big Ant Studios—which I will come back to in a second—came and brought the Australian Open game, AO Tennis, which is one of my favourite games, and put it on here in this place. If memory serves me correctly, Deputy Speaker Rob Mitchell, I believe you were also there and competitive in AOTennis; the member for Chifley was there and was also competitive; and the member for Hotham was there—and she was slightly more competitive than the member for Chifley. The member for Gellibrand came in and, let the record show, he talked a very big game but didn't get the chocolates! Macnamara, which is the home to video gaming in Australia, rightly came out on top in AO Tennis. Macnamara is the home of video gaming in Melbourne. We have some amazing local producers and local stories, and I was proud to represent them on the court in that Parliamentary Friends of Video Games competition.

Last week, the member for Gellibrand and I visited one of these amazing local producers, Big Ant Studios. Big Ant is a great local story. It started as a small operation with a few developers and it has consistently grown and grown because of the quality of Australian gaming. The quality of the product that Big Ant are producing means that they have grown and grown. They were recently acquired by French company Nacon, which is a reflection of the quality of the product that Big Ant have been producing. Some of the great games that Big Ant boast are the Rugby League Live series, the Don Bradman Cricket and Ashes Cricket series, the Australian Open, AO Tennis series—which I played and defeated the member for Gellibrand in—and many others. Ross Symons is the founder and is now the managing director or CEO of Big Ant. He is also a Carlton supporter, which I really respect and like about him. Big Ant are also now a major sponsor of the Carlton AFL women's team. So they are giving back to women's sport and they really are a part of the Australian sporting landscape. Walking through there and meeting some of the employees and seeing them turn the member for Gellibrand and me into video game characters was just brilliant. It was great to see the technology, the sophistication, no-how and skills of these local workers and local talents in our Australian gaming industry.

Macnamara also has a number of others. We also have Sledgehammer Games, which is a wholly-owned subsidiary of Activision, one of the world's biggest gaming companies. They have an office in San Francisco and also an office in Melbourne. Some of the well-known titles include Call of Duty: Advanced Warfare, Call of Duty WWII, and Call of Duty: Modern Warfare2, which is partly developed in Melbourne. The Arcade is the first not-for-profit collaborative workspace created specifically for game developers and creative companies, and they're based in South Melbourne. Also, PlaySide Studios is based in Port Melbourne, another of Australia's largest video game companies, and they can boast titles as Jumanji: Epic Run, The Lego Batman Movie and the Dumb Ways to Die series. So Macnamara clearly is the home of video gaming in Australia, but one thing that's coming loud and clear from the industry is that a little bit of support by government can turn into a whole lot of economic activity. If Australia is to compete on the international market of gaming, especially with the likes of Canada and other countries which are incentivising games, Australia needs to do better. Quite frankly, this government is not really supporting the industry as much as it could. A little bit of government investment would go a long way to create jobs and help build this wonderful local industry.

Debate adjourned.