The Interactive Games and Entertainment Association (IGEA) has released its sixth annual Australian game development research this week revealed that the sector has more than doubled in size over the past six years.
According to the study, revenue generated by the game development sector is up 26% compared to last year, with $284.4 million generated by studios in 2021-22.
There are now more than 2,100 full-time employees in the industry, an increase of nearly 60% from 2021-22.
In addition, just under 70% of game studios surveyed said they plan to hire new staff next year, adding more than 300 new jobs to the industry.
Ron Curry, CEO of IGEA, praised the industry’s strong performance in Australia.
“The growth in revenue, employment and confidence in the local game development industry is fantastic,” said Curry.
“Companies are maturing, studios are performing well, development teams are expanding and international companies and investors are taking note of Australia.
“State and federal governments recognize the positive impact the local gaming industry has on the economy and support the industry with tangible benefits, such as the federal government’s tax offset for digital games.”
The study found that 770 new jobs have been created by the game development industry in the past year, and this is only likely to increase in the future thanks to higher revenues from existing and new products and significantly more support from governments.
Since the first iteration of the IGEA survey in 2016, the industry has seen revenue growth of almost 150%, with studios recording 26% year-over-year growth.
The industry is also becoming more established, with 80% of studios and those in the industry having created at least one game. A quarter of the studios surveyed were under five years old, 48% were between six and nine years old, while just under 30% were ten years old or older.
“We’re seeing smaller studios easily expand into medium-sized studios, and larger studios grow to over 100 employees,” said Curry.
“Australia finally has the capacity to build and nurture a thriving games industry and game development ecosystem; however, these growing studios face major hurdles to access mid-to-senior talent, which is essential for these growing studios and dedicated financial support.
Game developers reported that the biggest challenge they faced in the past year was hiring employees with specialized skills, with programmers and engineers being the most in demand.
“To immediately address skills shortages in local industry, we need to tap into foreign talent,” said Curry.
“Recent improvements to the labor migration system, commitment to the local gaming industry and the abundance of opportunities available provide strong reasons for skilled migrants to choose Australia.
“We also need to think about our future pipeline of talent. Students and school leavers should consider the gaming industry as part of their career path as it offers a wide range of roles and pathways into other industries such as healthcare, technology and resources, all with tremendous global opportunities.
It’s been a huge year for the Australian game development industry. Legislation introducing a groundbreaking 30% tax credit for the industry in November by the House of Representativesand will pass parliament after a committee report is handed over early next year.
The Digital Games Tax Offset offers a 30% tax credit to local video game developers working on projects worth $500,000 or more.
It will apply to specific development, porting or ongoing development costs, rather than indirect costs of running a studio, and will be capped at $20 million per company per year.
The discount applies to expenses from the start of the 2022-2023 fiscal year.