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AGDC: Austin's Schum Talks Future Of Austin Game Biz

AGDC: Austin's Schum Talks Future Of Austin Game Biz Exclusive

September 15, 2008 | By Simon Carless

September 15, 2008 | By Simon Carless
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More: Console/PC, Exclusive

Talking to Gamasutra as the Austin Game Developers Conference kicks off, Austin Chamber Of Commerce's Tony Schum says there are vibrant opportunities for industry growth in the area -- despite recent layoffs at Austin.

Schum, who is Director Of Economic Development for the Austin Chamber Of Commerce, is relatively upbeat about the region's prospects, pointing to the acquisition of Warren Spector's Junction Point Studios by Disney and the acquisition of BioWare (including its Austin studio) by Electronic Arts as key recent highlights.

"The employment growth that those companies are going to bring to Central Texas... are what we want to focus on," says Schum.

However, the headlines in recent weeks around layoffs at Midway Austin and the relocation of NCsoft's North American HQ to Seattle have put somewhat of a damper on the Austin scene.

Schum argues there's still "going to be some emphasis remaining on [NCsoft] Austin" in terms of Q/A and administrative functions, and that that specific issue is therefore not a dead loss for the region.

Schum also says that one of the less-reported reasons for the NCsoft transition to Seattle was that few direct flights between the company's Korean headquarters and Austin presented challenges for the company. But Austin population growth is expected to increase over the next few years, says Schum, who hopes that this will mean fewer such issues for other companies as the city establishes itself as a travel hub.

As for Midway Austin's significant staff cuts, Schum acknowledges the loss to the region -- while saying it actually presents a "massive opportunity" for other commpanies to snatch up qualified, well-trained industry professionals in the area.

"Austin is a very entrepreneurial town," says Schrum, and with major companies like Sony Online still in the area and opportunities for startups, he's hoping to see continued growth. In addition, EA's Austin office now includes both BioWare and a fast-growing, relatively stealthy division.

What can Austin and the state of Texas do to encourage this growth? Schum says some central Texas communities within central Texas will give game companies per-employee grants or a tax abatement, and the state of Texas gives a five percent rebate on total production cost of games to help encourage studios. Schum also hopes that the rebate will increase to 15 percent in the next iteration of the bill, to be discussed in the next few months.

Of course, compared to some major rebates, this isn't the most aggressive offered -- with smaller states and areas plus major regions in Canada actively trying to integrate attractive incentives.

"There's a reason why those [less well-established] areas are having to offer 40 percent" in wage rebates, Schum says, although he admits that Raleigh, North Carolina is a major competitor to Austin in terms of talent base within the non-"core" U.S. development area.

As for the bigger areas such as Montreal, Schum says, "The question is sustainability," arguing that the Montreal model to offer "ridiculous" wage rebates focused on job creation, as opposed to project-based support, may not necessarily lead to a long-term payoff for the region.

As for gigantic deals to get major publishers to commit in any area, Schum says, "There are only so many of those deals per year."

But he points to flourishing companies such as Aspyr, Gamecock and Heatwave as signs of positive trends for Austin, and also hints at a couple of mid-sized, 20-30 person developers that may be relocating to Austin later this year thanks to incentives -- signs that Austin's game biz is still alive and ticking, despite setbacks.

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