The government of British Columbia, Canada has revealed sweeping new tax credits that it hopes will aid the growth of digital media production within its boundaries.

The BC Interactive Digital Media tax credit for game developers proposes a credit for 17.5 percent of qualifying B.C. labor costs. If approved, the tax credit would go into effect for game development projects beginning after August 31, 2010.

Other planned tax breaks include an increase on an existing tax credit for labor costs of foreign film productions within B.C., from 25.0 percent to 33.0 percent, and an increase in tax credits for digital animation or visual effects from 15.0 percent to 17.0 percent.

Kevin Krueger, Tourism, Culture and the Arts Minister, said about the tax credits, “They will serve to help keep B.C. at the forefront of the North American film and television industry, while providing a significant boost for video game production in our province.”

Douglas Tonsgard, CEO of Next Level Games in Vancouver, offered his take to the Vancouver Sun on what the credits would mean for his game development company:

It will do two things. It will stop job losses that have been happening now, and it will prepare us properly for future growth in Vancouver. Before the tax credit, it didn't make sense to grow your business in Vancouver. I know we will be adding people to our company now.

In light of Ubisoft’s recent unveiling of its new digital rights management (DRM) technology, Savy Gamer asked a variety of game industry people for their take on the current state of DRM.

The responses were varied, and shockingly, seemed to be formulated based upon what role the person in question has within the game industry.

TIGA CEO Richard Wilson on DRM and game packaging:

I think that it should be made absolutely clear on the packaging if games require constant internet connection. In time, this will probably be the case.

The PC games market will probably come to depend on this type of technology. Most consumers will probably not find this to be a problem but clearly they should be properly informed before purchasing a game.

Wilson when asked if publishers should make some concessions to consumers regarding the fact that DRM makes games difficult or impossible to resell:

No. It is not the responsibility of publishers to sustain a secondary market in games. In fact, some game developers believe that their businesses have been damaged by the secondary market in games.

Direct2Drive UK Product Marketing Manager Nihal de Silva noted that his service is “DRM agnostic” and was “happy to work with publishers/developers whose products carry DRM as well as those with DRM free products.”

de Silva was asked if he thought customers would be happy with Ubisoft’s new DRM initiative. He replied, “no comment.”

Developer Cliff Harris of Positech Games, which releases DRM-free games, was asked if he thought a lack of DRM contributed to piracy of Positech games:

I don’t think it has made much difference at all. Maybe a few of the more honest people now buy the game rather than pirate it, but this sort of thing is impossible to measure.

It seems any game, even if its $0.99 has a five hour demo and is DRM-free and done by a nobel-peace prize winning game design legend, will be cracked and distributed on day one by some self righteous teenager anyway.

StarForce’s Deputy Marketing Director Dmitry Guseff was asked how long it typically takes a cracker to bypass StarForce’s DRM technology:

If we take huge titles like “STALKER Clear Sky”, it took them 3 weeks to bypass which is very good result for AAA class game. For example “Mount and Blade” is still holding since the beginning of December.

So, basically AAA titles hold around a month, less important titles much longer. I have to add that if we hadn’t implemented some consumer friendly features those titles would have been held much longer.

While Keith Vaz being mocked in absentia at this week’s eForum roundtable on the state of the UK games industry was a humorous aspect of the proceedings, there were also some deep insights to emerge from the meeting as well.

Jas Purewal attended the forum and wrote up a couple of the more interesting notes on his website. Among them, a comment from Shadow Culture Minister Ed Vaizey (pictured) that if the Conservative party comes into power this year, there would most likely be no movement on creating tax incentives for game developers for two to three years. Vaizey reasoned that a focus on correcting the current recession would take top priority and push any talk on incentives to the back burner.

Vaizey also disclosed his hope that TIGA and ELSPA could work together more closely in the future, or even merge.

More coverage from the forum on the topics of tax breaks, digital distribution and education can be found on this page of Purewal’s site.

A report issued by the Washington Interactive Network portrays Seattle as one of the top three areas in the country for game development.

The firm’s Interactive Media Competiveness Study began by analyzing a dozen of the top U.S. locales for game development: Seattle, Atlanta, Austin, Boston, Chicago, Dallas, Los Angeles, Minneapolis, New York, Salt Lake City, San Francisco and San Jose.

Additionally, six indicators of competiveness were used: number of firms, computer and engineering talent, multimedia and animation talent, educational institutions, cost of living and the cost of doing business.

While noting that “there’s no stand alone leader” across all categories when it comes to crowning the best U.S. city for game development, the report labels Seattle, San Francisco and San Jose as the top three overall, then uses the cost of doing business in California as reason for promoting the Seattle area further to the forefront.

The report cites 2007 data showing the Seattle area with over 150 companies or divisions making games, employing over 15,000 people, with growth of 8.0% from 2003 to 2006.

Washington Interactive Network Business Development Manager Kristina Hudson added:

Today, there is no stand-alone national leader in any particular category of competitiveness - which means this 'title" can still be claimed. If our region is mindful of our incentives and taxes - keeping it fiscally friendly to individuals and businesses - we have a good shot at being THE global center of game development.

Based on Gfk Chart-Track sales data, the Entertainment and Leisure Software Publishing Association (ELSPA) has proclaimed 2009 as the second best year ever for UK videogame sales.

Total 2009 sales, lumping in software, accessories and hardware together, totaled 114.2 million units or £3.311 billion (approximately $5.3 billion U.S.). Broken out, software sales were £1.621 billion (approximately $2.6 million U.S.), while console hardware totaled £1.06 billion (approximately $1.7 billion U.S.). The latter figure decreased in year-over-year results due to lower average prices.

Wii games sold the most units in the UK last year, with a figure of 18.0 million, with PlayStation 3 software sales totaling 11.9 million units. The Xbox 360 was number one for 2009 in terms of revenue, gaining four percent over 2008 to total £459 million (approximately $734.0 million U.S.). No unit figure for 360 software titles sold was provided.

6.7 million hardware units were bought in the UK last year, with the Wii selling the most.

The accessory market contributed 2009 sales of £630 million (approximately $1.0 billion U.S.).

ELSPA Director General Mike Rawlinson commented, “The UK videogames market is maturing – we are not seeing such explosive growth as in 2008, a sure sign that the market is coming of age. Consumers are shopping smarter and gaming is becoming more widespread across all demographics.”

Money spent on videogames has exceeded that spent on films in the United Kingdom, according to number compiled for an article in the Daily Telegraph.

The videogame numbers, according to GFK Chart-Track, show that more than £1.73 billion was spent on games for the 12 months ending in September 2009. For that same period, the UK Film Council reported that £1 billion was spent at the box office and another £198 million was spent on DVD and Blu-Ray titles. Only music and television had a bigger year than videogames.

Tom Watson, a former cabinet minister and avid gamer, wasn't surprised by the numbers:

"Like anything digital, Parliament has a very narrow view of video games. Too many politicians think video games are played by teenage boys staying up all night shooting things in their bedroom.

"And yes there are plenty of those, but there also a huge range of people of many different ages who love playing games. The industry has matured over the last decade, and so too have gamers."

What makes these numbers even more impressive is that they do not include the sales figures for Modern Warfare 2, which came out in November.

Industries immune to the economic downturn were few and far between in 2009 and, unfortunately, videogame startup companies dependent on venture capital were not one of them.

Venture Beat reports that funding was infused into 97 videogame startups in 2009—to the tune of over $600.0 million—respectable figures, but well off of 2008 figures. 2008 tallied a little over $936.0 million in startup capital for 112 companies, meaning 2009 was off about 36.0 percent.

The year-over-year drop would have been much worse (55.0%) however if Zynga had not raised $180.0 million in a deal earlier this month.

Averages were also down: in 2008 the average capital raised was $8.3 million per company; in 2009 that figure dropped to $6.2 million.

Venture Beat goes on to list all 97 companies and their dollar amounts raised, where known. The top 5 were Zynga, Playdom, Smith & Tinker, PopCap Games and Zula.

As pointed out last week, The Screen Actors Guild and its members are still without a contract with the videogame industry for voiceover work. SAG membership rejected an identical contract approved by the American Federation of Television & Radio Artists in October.

However, an article in The National takes a closer look at the dispute, asking in its headline if the videogame industry is playing fair.

From one SAG member:

“Before, you were doing three characters dying a horrible death. Now you’re doing 20 characters dying a horrible death,” Dee Baker, a veteran voice actor, told the Los Angeles Times this month. “Not only will this mean less money for more work it’s also going to be a lot more vocally difficult.”

The story delves into how much money videogames have raked in over the last few years and also looks at the writing that goes into the stories of the games: a "very, very long screenplay," in the words of Heavenly Sword story writer Rhianna Prachett.

The article points out that SAG is at somewhat of a disadvantage in the talks, which have been relatively non-existent since the deal was rejected:

Actors say the proposed contract means they will have to do more voices for the same money, but the Screen Actors Guild appear comprehensively outflanked. Currently 89 per cent of actors in games aren’t SAG members, while SAG’s sister union the American Federation of Television and Radio Artists has cut a separate deal with the game manufacturers.

Based on the headline, the article obviously takes a pro-SAG viewpoint, one highlighted by this:

In the video-game industry, which grew out of the computer software business, most workers are employees who don’t receive residuals – additional fees for the reuse of their work – as is common in the movie and TV business. And video gamers don’t think actors are worth the extra cash.

“If you look at the total contribution either in terms of hours that go into the creation of a game or the earnings of the people who make the games, voice talent represents a minute percentage,” the lawyer Scott Witlin, who represented video-game publishers in the recent labour negotiations, told the Los Angeles Times.

With AFTRA on board, it will be interesting to see if the videogame industry tries to work with SAG to iron out a contract.

Billionaire financier Carl Icahn has increased his stake in Take-Two Interactive to 11.3 percent, up from 2.5 percent, according to a filing with the SEC.

Icahn, known for his shrewd business moves, has always had an interest in videogame companies, and this latest purchase has analysts specualting on the future of Take-Two and why Icahn purchased his stake at this particular time. His purchase of 5.9 million shares and more than 783,000 options makes him the company's second largest shareholder.

Earlier this year, Take-Two spurned a $25.74-a-share acquisition offer from Electronic Arts. Now, with Icahn more involved, analysts think something is imminent with Icahn looking to cash in on undervalued shares. With the announcement of Icahn's purchase, Take-Two shares jumped more than 9 percent on Friday to close at $9.01.

According to a Reuters story, analyst Michael Pachter, who montiors the industry for Wedbush Morgan, said that Icahn may force a sale of Take-Two:

"I don't think as an activist he wants to run a company, I think it's much more logical that he would sell the company," Pachter said.

Pachter also said that Icahn has a history with Take-Two chairman Strauss Zelnick, whom Icahn nominated to the board of Blockbuster in 2005.

Another scenario, according to analyst Mike Hickey of Janco Partners, is to sell off parts of the company, such as 2K Sports:

"There's the opportunity to unlock some significant value, they could look at the pieces of the business," Hickey said.

It will be interesting to see what Icahn has planned for the company and how it impacts some of the company's most reconizable franchises, such as Grand Theft Auto and BioShock.

The Screen Actors Guild (SAG) still hasn’t ratified a deal with the videogame industry for voiceover work, which could mean more opportunities for actors in the American Federation of Television & Radio Artists (AFTRA) camp.

Variety reports that current SAG talks are still stalled, with little chance of any forward movement in the near future. Akin Gump attorney Scott Witlin, who is handling the game industry side of the negotiations, said, “We’re still in a state of assessment.”

Videogame earnings for SAG members plummeted 56% last year to $2.77 million notes the article, an extremely small slice of the $2.0 billion earned by SAG members overall. It’s also estimated that 75.0% of all videogame voiceover work is done by non-union workers. In light of no SAG contract, it is expected that more AFTRA members will be utilized within the 25.0% of those unionized.

As detailed earlier, SAG’s rejection of a deal has hinged on pay levels for those providing “atmospheric” voices in games. A proposal called for allowing actors to voice up to 20 atmospheric (or non-main character) voices with up to 300 words per voice in return for pay of around $800 per day. The opposition claims that this would lead to actors doing more work for less money.

AFTRA okayed its deal with game companies back in October.

Falling stock prices and threats to traditional business models (digital distribution & social games for example) have made videogame companies ripe for takeover by media conglomerates.

A column on Fortune discusses the lure of such takeovers for Hollywood-type companies, but cautions that it’s a buyers market and that the conglomerates should be in no rush to pull the trigger:

But there's no rush. Next year isn't shaping up well for the gamers so they may get cheaper. EA will be releasing 30 titles, down from 50. Take-Two, creator of Grand Theft Auto, is expected to report its fourth losing year in the last five. THQ has no breakout hits on the horizon, Wells Fargo notes, and faces another difficult year.

Shares of Electronic Arts and Take-Two Interactive are down 70% from previous highs, while THQ is off 90% the column notes, adding that the current combined enterprise value of the three companies is around $4.0 billion.

EA’s bid to take over Take-Two should serve as a further reasoning behind a wait and see approach for companies like News Corp., Time Warner and Viacom:

But big media can wait. Indeed, it need only look at the bullet EA dodged when it stepped back from a $25.74 a share hostile bid for Take-Two in 2008. That's over three times Friday's closing share price.

The UK government will inject £3.5 million (approximately $5.7 million U.S.) from its Strategic Investment Fund into new facilities to designed to grow the videogame development sector.

The funding, which could grow to upwards of £10.0 million in total with additional funding from European Regional Development Fund Initiatives and the North West Development Agency, will be used to create special prototype centers at the University of Abertay in Dundee, Scotland and in Manchester’s MediaCity UK.

It is hoped that the investment will assist in the creation of 30 new companies with some 400 new career opportunities over the next three years.

Dundee West MP Jim McGovern (pictured left) was widely praised for his role in capturing Scotland’s share of the funding. Scottish Secretary Jim Murphy told The Courier, “While this announcement is down to the brilliance of the University of Abertay, it is also down to the doggedness of Jim McGovern. He met Peter Mandelson several times and pestered him about Dundee, it’s a job well done by him.”

Dave Jones from Scottish developer Realtime Worlds said in the Daily Record, “Using a prototype fund to provide computing and arts students with the opportunity to get hands on experience of real projects will help equip them better for working in our high growth industry and help feed the demand we have for talent."

Game industry groups were equally happy about the investment.

Entertainment and Leisure Software Publishers Association (ELSPA) Director General Mike Rawlinson, said, “The UK videogames industry is one of the country’s most dynamic and creative industries and a leading player in the videogames industry globally. I am sure that this investment will stimulate further innovation and skills training in the UK and help the industry maintain its current momentum.”

TIGA CEO Dr. Richard Wilson stated, “This is good news for the UK games industry. We particularly welcome the intention to use the funding to invest in prototypes to support new Intellectual Property (IP) development. Finding sources for finance for new IP is difficult at the best of times.”

A clash over pay levels for those providing atmospheric voices in videogames is the real sticking point behind still unresolved contract talks between the Screen Actors Guild (SAG) and videogame developers.

An LA Times story on the subject notes that under the proposed SAG deal, which an “influential group of Hollywood voice actors has strongly opposed,” voice actors would be paid about $800 for a four-hour session that could involve up to 20 atmospheric (or non-main character) voices with up to 300 words per voice. Those opposed claim that the preceding provisions would require them to do more work for less money and would “put undue stress on their vocal chords.”

Actors who do main character voice recording can make the same $800, but for voicing three characters, and can command double the fee for doing six to ten voices over a six-hour session.

Dee Baker, a voice actor who’s work has appeared in Spore and Halo 2, added, “Before, you were doing three characters dying a horrible death. Now you're doing 20 characters dying a horrible death. Not only will this mean less money for more experiences, it's also going to be a lot more vocally difficult.”

While the American Federation of Television and Radio Artists (AFTRA) has already approved its deal with videogame publishers, the Times article calls SAG’s bargaining influence “limited,” as “about 80% of video game titles are performed by actors who don't work under a guild contract.” Both SAG and AFTRA are looking for ways to provide incentives for hiring union voicers.

Voice actor Dave Wittenberg says in the article he makes about $30k a year doing voice work for videogames, a figure he has to supplement with additional work in animated television shows.

Mass Effect 2 has an estimated 90 actors playing 546 characters who speak 31,000 lines of dialogue.

Ontario is launching three new programs designed to aid Ontario-based interactive development companies.

Backed by a provincial investment of $605,000, Interactive Ontario will see the following programs enacted:

•  ONtheEdge –a training curriculum targeting video game entrepreneurs to provide them with business skills tailored for the industry.
•  GamesID - will provide market intelligence, marketing and promotional support to video game companies by disseminating industry research and information and seeking domestic and international partnerships.
• Ontario Video Game and Digital Media Investor Network - designed to connect video game and digital media developers with Canadian and international investors.

Sandra Pupatello, Minister of Economic Development and Trade, stated, “As a government, we are committed to working with the industry to generate investment and create high-value jobs for Ontarians.”

Ontario says that its local digital media industry generates around $1 billion annually. Digital Extremes, Silicon Knights, DreamCatcher Interactive, Koei Canada and BattleGoat Studios are among those that call Ontario home.

Via IndustryGamers

The reworking of a House Bill aimed at providing incentives to attract film, television and videogame creators to Texas has resulted in a boon for videogame developers.

HB 1634 was originally passed in 2007, offering a $22.0 million pool to pull from in order to offer grants worth 5% of a project’s budget. Unfortunately, as The Austin Chronicle reports, the bill paled in comparison to the offering of other states because of tight terms and high budgetary requirements.

HB 873 was passed in April of this year, and while it featured the same name—The Texas Moving Image Industry Incentive Program—it featured loosened terms and leeway for rules to be reworked on the fly, already resulting in an increase in spending in the state.

While film spending within the state in the wake of the shift from HB 634 to HB 873 stagnated, videogame spending increased. The paper reports on the growth in the game sector:

Last year under HB 1634, there were 33 qualifying applicants statewide, spending $58 million and getting $2 million in grants. Under HB 873, there have already been 19 applicants, investing a total of $62 million and receiving nearly $4 million from the state.

Austin’s share of the $62.0 million dollar pie so far? $43.0 million, causing Tony Schum, Director of Economic Development for the Greater Austin Chamber of Commerce to state:

All the right mixture of elements are here for us to promote gaming, and these incentives are really an accelerator.

Full details of the The Texas Moving Image Industry Incentive Program can be found here.

Following yesterday’s news that the American Federation of Television & Radio Artists (AFTRA) had endorsed a tentative deal with videogame publishers that would see voice actors receive a raise, word comes today that the Screen Actors Guild (SAG) has rejected a similar contract.

SAG’s board had approved the agreement and passed it on to its four member caucuses, which shot it down. Variety reports that a provision designed to allow a single actor to perform multiple parts (up to 20 voices, with up to 300 words each) in turn for a daily base rate was the reason for the rejection.

Word also comes down that not only did AFTRA—which according to Variety receives the “lion’s share” of videogame-related work—endorse their deal, but they did so in “an overwhelming and strong” manner.

The two sides will apparently now return to the bargaining table.

The board of the American Federation of Television & Radio Artists (AFTRA) has endorsed a tentative deal with videogame publishers that would see game voice actors receive a bump in pay.

Separate AFTRA and Screen Actors Guild (SAG) contracts were announced earlier this month. SAG’s board has approved its deal as well reports Variety, and has sent out the agreement to its four member caucuses for a final go over.

The contracts of both groups expire on December 31. The new 15-month long deals, if approved, would run through March 30, 2011. As it stands now, each group would receive an initial 3% raise and a second increase of 2.5% on April 1.

Opposition to one of the pact’s points has apparently sprouted up as some members are not too pleased with a provision that would allow employers to use actors to perform up to 20 different voices—with up to 300 words for each voice—and be paid at the daily base rate, which some see as a step backward from current terms.

The next time you see a big name actor or artist associated with a video game, you can finally rest easy. That actor or artist is now being properly paid, based on a new agreement with video game publishers by the Screen Actors Guild (SAG) and the American Federation of Television and radio Artists (AFTRA).

The announcement came late Friday in the form of a press release, touting the new deal that brings SAG in line with the pay scale for AFTRA members:

The contracts deliver a 3 percent wage increase upon ratification for SAG, thereby bringing SAG's wages into parity with AFTRA's, and another 2.5 percent increase on April 1, 2010, for both unions. Both pacts contain increases in benefit contributions and a liquidated damages provision to incentivize employers to give notice of vocally stressful work.

The contracts also established a new "atmospheric voices" category for voice actors. This allows performers to record multiple minor character voices in one sitting.

The contracts go into effect upon ratification by union members and lasts until March 30, 2011.

Other provisions include:

• A .5% increase in the pension and health contribution rate for Screen Actors Guild member effective upon ratification, and another .2% on January 1, 2010, for both unions (bringing the total rate to 15%).
• The establishment of a $100 liquidated damage for failure to give notice of vocally stressful work.
• An agreement to develop during the term of the contract a set of guidelines for conducting vocally stressful work.

Hmmm, there's that term again: Vocally Stressful. Three times in the same press release. It will be interesting to see what guidelines the two sides come up with for this.

As everyone knows, the economy is pretty bad. There are signs it is getting better, but none of the 50 states have been immune, according to Forbes magazine. To that end, it released its yearly list of the states with the best business climate for 2009. Virginia tops the list at number 1.

Two states with a large video game foundation made the top 10. Washington came in at number 2, bolstered by the Microsoft behemoth. Texas came in at number 8, no doubt in part to the growing video game development community in Austin and the vicinity. California, home to many of the big video game publishers and developers, rose two spots from numer 40 last year to number 38.

Forbes detailed how it determined the rankings:

Our Best States ranking measures six vital categories for businesses: costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life. We factor in 33 different points of data to determine the ranks in the six main areas. Business costs, which include labor, energy and taxes are weighted the most heavily. We relied on nine different data providers. Moody's Economy.com is the most-utilized resource.

Many of the top states showed a more educated workforce, the magazine said.

For those who have trouble with the written word, Forbes also included a look at their list in pictures. If you want to digest all the data at once, then you can look at the handy table provided.

Shadow Culture Secretary Ed Vaizey (left), a consistent supporter of the UK's video game industry, said this week that the British Government was too focused on the video game violence issue and not paying enough attention to helping the industry grow.

Develop reports that Vaizey made his comments while registering for the new London Games Conference, which will be held in October. The Conservative Member of Parliament said:

I’m delighted to be speaking to the London Games Conference. The games sector is one of the most successful creative industries in the UK, but it has been forgotten by Government.

While Canada and France aggressively compete to attract talent, all our politicians can talk about is video games violence.

Yet games should be a dream for a politician – it recruits people qualified in difficult subjects, like maths and computer science; it’s regional; and it’s successful and world-beating. Government backing should be a no-brainer.