MA. Considering Incentives for the Video Game Industry

January 18, 2011 -

Correction: I erroneously wrote earlier that "Massachusetts has a thriving video games industry - mostly in the Western part of the state in and around Boston." This is quite incorrect and doubly embarrassing because I actually live in Massachusetts (I do know where Boston is, for the record). A revised story below:

Massachusetts may join Texas, Georgia and countless other states that offer some sort of tax incentives to the interactive entertainment industry. According to a report in the Boston Herald, supports of the effort want to expand the "the state’s $2 billion video game industry to $20 billion" within the next five years. To do that, the state will have to be willing to invest in incentives, but opponents say the state is already in the red.

One of the initiative’s supporters, State Rep. Vincent Pedone (D-Worcester) said it is too early to say what the effort would cost, but wants to expand the industry:

"Twenty-five or 30 years ago, no one in the Commonwealth knew what biotechnology was, and it has now become a critical part of our Massachusetts economy," said Pedone. "We think the video game design industry has equal potential."

Massachusetts has a thriving video games industry - mostly in the Eastern part of the state in and around Boston. Companies such as Turbine and Harmonix are long-time studios that have managed to survive despite the lack of incentives and the not-so-pro-business atmosphere in the state. Approximately 1,295 people are directly employed by video game developers or publishers, according to the Entertainment Software Association. That places the state fifth behind California, Texas, Washington and New York.

Turbine says that local colleges and universities offer a decent talent pool that fits the industry’s needs: "Our world is really a combination of everything creative, from visual to storytelling to game play, combined with good, old-fashioned sophisticated software engineering," said Ken Surdan, vice president of operations for Needham-based Turbine, Inc., maker of the online "Lord of the Rings" game.

But Harmonix sees its business constrained by high costs in Massachusetts that tend to inhibit startups and firms looking to expand.

Florian Hunziker, chief operating officer for Cambridge-based Harmonix Music Systems, said his company is often forced to outsource work to out-of-state studios: "It’s difficult for some of the Massachusetts development companies to be cost competitive with studios that are either in a state where there is a tax break or studios that are in place where there is a lower cost of living," he said.

Meanwhile opponents of new tax incentives for the game industry point to past failures with tax incentives, as well as a budget that is already stretched beyond belief.

Rep. Bradley Jones, the House Republican leader, said he’s not against cutting taxes for companies, but doesn’t believe the state should pick "winners and losers" in the private sector: "Do we go pick an industry, or do we focus our energies on more broad-based initiatives that would help all companies?" he asked.

He also pointed to last week’s announcement that Evergreen Solar planned to close its solar panel factory in Devens and lay off 800 workers. He notes that the company received $58 million in state aid in 2007.

Still, the news that someone on Beacon Hill is thinking about the industry probably gives companies like Turbine and Harmonix hope that someday the environment for business might improve. After all, it's obvious that these companies -- and others like Irrational Games - love the state; if they didn't they'd probably be headquartered in Texas by now..

Source: Boston Herald


 
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Matthew Wilsonyes it help a sub section of the poor, but hurt both the middle and upper class. in the end way more people were hurt than helped. also, it hurt most poor people as well.04/16/2014 - 12:13am
SeanBJust goes to show what I have said for years. Your ability to have sex does not qualify you for parenthood.04/15/2014 - 9:21pm
NeenekoSo "worked" vs "failed" really comes down to who you think is more important and deserving04/15/2014 - 7:04pm
NeenekoThough I am also not sure we can say NYC failed. Rent control helped the people it was intended for and is considered a failure by the people it was designed to protect them from.04/15/2014 - 7:04pm
NeenekoIf they change the rules, demand will plummet. Though yeah, rent control probably would not help much in the SF case. I doubt anything will.04/15/2014 - 1:35pm
TheSmokeyOnline gamer accused of murdering son to keep playing - http://cnews.canoe.ca/CNEWS/Crime/2014/04/15/21604921.html04/15/2014 - 11:50am
Matthew Wilsonyup, but curent city rules do not allow for that.04/15/2014 - 11:00am
ZippyDSMleeIf SF dose not start building upwards then they will price people out of the aera.04/15/2014 - 10:59am
Matthew Wilsonthe issue rent control has it reduces supply, and in SF case they already has a supply problem. rent control ofen puts rent below cost, or below profit of selling it. rent control would not fix this issue.04/15/2014 - 10:56am
NeenekoRent control is useful in moderation, NYC took it way to far and tends to be held up as an example of them not working, but in most cases they are more subtle and positive.04/15/2014 - 10:24am
PHX CorpBeating Cancer with Video Games http://mashable.com/2014/04/14/steven-gonzalez-survivor-games/04/15/2014 - 9:21am
Matthew Wilsonwhat are you saying SF should do rent control, that has never worked every time it has been tried. the issue here is a self inflicted supply problem imposed by stupid laws.04/15/2014 - 8:52am
E. Zachary KnightNeeneko, Government created price controls don't work though. They may keep prices down for the current inhabitants, but they are the primary cause of recently vacated residences having astronomical costs. Look at New York City as a prime example.04/15/2014 - 8:50am
NeenekoI think free markets are important, but believe in balance. Too much of any force and things get unstable.04/15/2014 - 7:25am
NeenekoWell, the traditional way of keeping prices down is what they are doing, controls on lease termination and tax code, but it will not be enough in this case.04/15/2014 - 7:24am
Matthew WilsonI said that already04/14/2014 - 4:22pm
E. Zachary KnightMatthew, The could also lower prices by increasing supply. Allow high rise apartment buildings to be built to fulfill demand and prices will drop.04/14/2014 - 3:48pm
Matthew Wilsonthe only way they could keep the price's down, would be to kick out google, apple, amazon, and other tech companies, but that would do a ton of economic damage to SF, but I am a major proponent of free markets04/14/2014 - 2:54pm
NeenekoThe community people are seeking gets destroyed in the process, and the new people are not able to build on themselves. Generally these situations result in local cultural death in a decade or so, and no one wins.04/14/2014 - 2:09pm
NeenekoWell yes, that is the 'free market', but the market is only a small piece of a much larger system. The market does not always do the constructive thing.04/14/2014 - 2:06pm
 

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