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The Atlanta Journal-Constitution
Published on: 08/13/08
One video game pits deadly super agents against each other in a dystopian virtual world. Another has players roam a fantasy world filled with vampires and werewolves.
The games — both in development at local studios — might not be fun for the whole family, but they're just the type of thing the Georgia Department of Economic Development is looking for.
Pouya Dianat/pdianat@ajc.com | ||
| Ben Knapp, a character artist at Hi-Rez Studios in Alpharetta, works on a creation for the company's new game Global Agenda. | ||
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For years, video games were the whipping boy of politicians, blamed for everything from antisocial behavior to teaching kids "the skill and the will to kill."
But with game sales at $9.5 billion last year, some politicians are seeing dollar signs where they might have once seen a campaign issue.
Georgia is one of several states trying to lure game developers to set up shop with income tax credits, sales tax exemptions and other incentives.
Since 2005, video game companies have applied for an estimated $12 million in tax credits, according to Georgia officials.
Now, armed with a more ambitious program enacted in May, Georgia is making a big push to market metro Atlanta as a hub for the video game industry.
Asante Bradford, the state's digital entertainment liaison, said he wants to double the industry's economic impact to $360 million in two years.
For gaming companies, Georgia's attitude is a nice change of pace.
"With so many politicians beating up on video games, it's nice to be in a state that is basically in the industry of fun," said Todd Harris, chief operating officer at Alpharetta-based Hi-Rez Studios.
But Georgia is practically starting at square one in a highly competitive market. Although two international companies — CCP of Iceland and CDC of China — have opened local offices, Hi-Rez is the state's only homegrown developer deep into production of a big-budget game. And just one developer, Tripwire Interactive in Roswell, has ever had a game on store shelves.
Statistics from the Entertainment Software Association place Georgia light years behind gaming meccas like California, Washington and Texas.
Mike Tinney, president of CCP's Stone Mountain office, said the lack of a critical mass can make moving to Atlanta a tough sell for developers.
"It's more of a frontier market," he said. "When you ask people to move to Atlanta, it's a little bit of a leap of faith for them."
And Georgia isn't the only state actively courting game companies.
Texas souped up its incentives for 2008, offering a rebate for 5 percent of spending during the course of development, for a maximum payout of $250,000.
Gov. Rick Perry even traveled to Los Angeles for the annual E3 gaming conference in July to deliver a keynote address.
"The gaming industry portrays a work ethic, business model and embrace of new ideas that our nation would be wise to consider," he said. "I congratulate this growing industry on its success and invite further expansion in Texas where the barbecue is hot and the video gaming is even hotter."
Texas has the strong gaming pedigree that Georgia lacks. The original first-person action games, such as Doom in 1993, were developed by id Software in Dallas. And industry innovators created the first successful online role-playing game, Ultima Online, in 1997 in Austin. More than 90 companies are currently based there.
Simon Carless, publisher of Game Developer magazine, said Georgia needs large gaming companies to open branches in the state. Then individuals can splinter off to form independent studios.
"That's really how you get a local ecosystem going," he said.
Georgia officials say they are well-positioned to make a big pitch for gaming, claiming their incentive package is the best in the nation.
The 2008 Entertainment Industry Investment Act signed by Gov. Sonny Perdue in May eschews the state's previous tiered system in favor of a flat income tax credit for 20 percent of in-state spending. If the final product includes a Georgia peach logo, the state will add another 10 percent tax credit.
The incentives are available to all types of productions — including video games, movies, commercials, music videos and TV shows — as long as the company spends at least $500,000 a year on expenses such as salaries and materials.
David Hartnett, vice president of technology industry expansion at the Metro Atlanta Chamber of Commerce, said Georgia has a limited window to make the most of its current program before another state ups the ante.
"We have a unique, seize-the-moment opportunity," he said. "You're not No. 1 forever."
Harris said the incentives have stopped Hi-Rez from outsourcing certain development duties like audio and animation.
Some of Georgia's appeal is the same as for other businesses. Tripwire Vice President Alan Wilson said the company decided to make Roswell its home in 2005 to take advantage of lower costs, an international airport and a nice climate.
But the company wasn't able to qualify for tax incentives for the first few years because it didn't spend the requisite $500,000 a year.
"To get things like video game startups, it's going to need to start lower," Wilson said.
Bradford said he is talking with three or four gaming companies about opening offices to Georgia but is not ready to make any announcements. He hopes to add about five new studios.
Bill Thompson, deputy commissioner of Georgia's Film, Music and Digital Entertainment office, said that although the state's gaming industry is in its "grade school years," there is still a lot of potential.
The industry's annual growth rate from 2003 to 2006 was 17 percent nationwide, about four times that of the U.S. economy as a whole, according to the Entertainment Software Association.
"If we're in an economy where a lot of traditional industries have slowed down, certainly we have to nurture the ones that are doing well," Thompson said.
GEORGIA GAMING COMPANIES
Tripwire Interactive
- Roswell
- Founded in 2005
- The only Georgia company to put a game on store shelves, it is currently working on a follow-up to the 2006 action game Red Orchestra.
Hi-Rez Studios
- Alpharetta
- Founded in 2005
- The company is testing its first project, a multiplayer action game called Global Agenda.
CCP
- Stone Mountain
- Opened in 2007
- The Icelandic company merged with Georgia's White Wolf, creator of pen-and-paper role-playing games, in 2006, then made Stone Mountain its North American headquarters in 2007.
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