Minor note: Texas legislature meets 180 days every 2 years. Legislation will end in September, and then will not assemble until January 2009.

Yeah, they're funny like that.

If states want to attract business, why focus on one industry or another? Why not just lower business related taxes and decrease regulations and red tape? Why pick favorites? Stealing businesses from business unfriendly states is plenty easy as it stands, I don't see how direct subsisdies make any sense.

The answer seems to me to be that lobbyists aren't happy when you benefit everyone, they want to have the benefit all to the people they are representing. If you all want to excuse that as the way the game is played, go right ahead. Maybe it is. It's still immoral, and I'll keep calling it that until they stop (yes, probably forever)

In theory the government shouldn't be offering subsidies to companies and let them go where they want to go. In theory. Life, on the other hand, comes with all sorts of realities that theory doesn't account for. Favorable taxes, enviromental concerns, growth, and all manner of things that a local city or state may need to do in order to provide services the people think they deserve. If they don't offer subsidies the jobs will go somewhere else. Somewhere offering subsidies. So they have to do this to keep the massive game industry that is growing in Texas.

It really is a gamble for the state. They are hoping that the subsidies they offer keep folks in town, keep revenue coming in and hit the jackpot with the next big game that they get to tax. The difference between this and Home Depot is that Home Depot can't hit the home run. They just don't swing the same type of lumber. The article doesn't say this because, generally speaking, they don't have economists writing news articles.

And it works. They have a number of game companies in Austin and the Dallas - Ft. Worth area that thrive. There is no chance they could get all of the home goods to pass through Texas. There is a chance they could get a large percentage of games to pass through Texas. Market forces at work here.

Besides, if they didn't spend it they would have to refund it or lower taxes. And, as a rule, governments don't like to do that.

There is some misunderstanding of this bill both in the initial post and in the ensuing posts. While I'm not directly involved, I run a game company two blocks from the Texas State Capitol, and I've worked with the TXMPA (Texas Motion Picture Alliance) that lobbied for this bill. The Senate version does indeed include content restrictions for both games and movies.

An earlier version of the bill had a double-standard: games were subject to content restrictions, whereas film was not. Thus, to avoid a potential lawsuit from the ESA, games were dropped altogether. Later, the content restriction was added for films. Senator Watson then re-inserted games into the bill.

Thus, the current version of the bill includes content restrictions for both film and games if they're to be eligible for these funds. Because the standard is consistent, the state feels the bill can be successfully defended should a suit be filed, as I understand it.

Since the Senate version of the bill differs from the House's, which was passed after games were dropped, the bill now goes back to the House sponsor, Representative Dawna Dukes; conference committee approval is not necessary if Rep. Dukes accepts the Senate version, so I'm told. If Dukes approves the Senate's version, the bill goes to the Governor's desk for signature.

On a side note, Watson, a former mayor of Austin, has become an advocate of the industry. Many game companies reside in his district, and last fall he moderated a high-profile symposium between game industry, university and government leaders about the need for more four-year degree programs to prepare students for careers in games and digital media. It was a great first step, and a follow-on symposium is expected this summer.

As an indication of why using subsidies to attract businesses involves a tough economic question, here is one paper on the topic:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=922720#

I haven't read it. Based on the abstract, I would be skeptical of the moral/ethical argument -- it was published by the Acton Institute, which is more libertarian than I am -- but I chose it as an example because of the fun video game related title, "Grand Theft Auto: The Immorality of Business Subsidies."

@hayabusa75

You need to follow the thread.

John said, "Additionally, I don’t see how it is moral for other people’s money to subsidize our hobby."

Tatl responded, "John, isn’t our hobby someone elses piece of art. I mean that a lot of work, imagination and not to mention, love and pride. go’s into those games, just like producers/cast/crew of a movie production put they’re heart and soul into they’re movies. If movies are going to get a subsidie, game would sertainly deserve one as well."

I responded to Tatl by asking why the artistic nature of movies or video games is relevant to whether the taxpayers will subsidize these industries. The fact that the article does not say the bill is designed to help the for-profit arts is not really relevant, since my question was a response to Tatl.

If this bill is justified, the justification would, in my opinion, need to be the one suggested by Archgabe, i.e., "[T]he state wins because their entertainment markets get a boost and attract new companies." Whether this is true or not is a difficult economic question. I don't know the answer, but I also don't trust the legislature to spend money wisely. (Just to be clear, I am not saying legislatures should never spend any money, but it means I am suspicious of politicians' explanations for why they are doing it.)

As a final note, however, even if this is a rip-off of Texas' taxpayers, you might think this is a good deal so long as you live in some other state because Texas taxpayers will be subsidizing your hobby. (Well, it's my hobby too, but I don't really want the handout from the taxpayers in Texas.)

@Conejo

I don't know whether hammers are big money operations or not -- though the retail home improvement business is over 20 times the size of the video game business -- but either way, you seem to have missed the point. The question was why a subsidy should depend in any way on whether the for-profit business or industry in question makes artistic works or not.

Source on the home improvement figures: http://www.nrha.org/mm2007.pdf

@Tatl

Do you think taxpayers should provide subsidies to businesses just because the businesses are working hard at something artistic?

Why should some guy on an assembly line have his taxes handed over to Electronic Arts because he makes, say, hammers, which are not artistic, and EA makes video games, which are?

If the goal of this legislation is to attract new businesses to Texas and the payment of the subsidy will result in a net benefit to Texas, I don't see why movies and video games should be singled out for eligibility. But if I was a Texas taxpayer, I would be suspicious about whether there will be any net benefit to the state, regardless of which businesses are eligible.

@John

when entertainment-based companies move to states, they create jobs and generate money for the state (taxes).

no industry is "beholden" just because a state has offered a nice incentive package for them to do business there.

anyway the victory is that someone with enough common sense thought that censoring video games while simultaneously allowing the other parts of the industry was wrong. Kudos to these elected officials who stand up for what this country is founded on.

In about 30 years people will look back at what these states where trying to pull off and think... what a load of bull....

probably because by that time most of the people out there incl. parents/politicians will have played a video game and know what they are talking about.

something worse than a loudmouth politician in my opinion, is a loudmouth politician that thinks he knows what the hell he's talking about like that senator that proposed to ban the V tech shooter game from stores even though its not actually a profesional game, left alone something any self-respecting game company would create.

I think it's foolish for us as gamers to celebrate this. This time they may not attach strings to their money, but who knows about next time. Now they'll be more inclined to think of the gaming industry as "beholden" to them, and they can threaten to remove the subsidies to control the industry.

Additionally, I don't see how it is moral for other people's money to subsidize our hobby.

So they are only letting it happen for about 2 years?

Nice to see my own state senator was a co-sponsor on this. There are a number of high profile game developers who live in his district. Wonder if that had any thing to do with it?

Gladd to see we are getting some respect. I read the original bill with the sections about having to get the game rated by the ESRB and not being M or AO. That was wrong. I am glad that they changed it.

Also, I found it kind of disturbing that they lumped video games together with comercials. Did any one else see that?

Game Industry Wins a Surprising Victory in Texas...

...

My bad, I guess my writing was unclear. This is a bit complex.

Deuell is the good guy here, he pushed the bill. Ogden wanted to restrict the grants available to game developers based on their game's content (i.e. - censorship, government has to approve the game before funding the grant).

Somehow, the bill managed to pass, game developers included. Watson gets kudos for proposing the amendment which put video game developers back into the mix...

From what I can gather ...

It seems that somebody proposed a bill to provide grant money to film, television, and video games companies.

However, the Texas Senate (?) tried to change the bill so that "offensive" video games wouldn't receive any grant money.

The ESA threatened to sue over the changes, so the video game section was dropped, meaning no grant money for video game producers at all.

However, it turned out that not only did the bill pass, but somebody had added the video game section, sans censorship issues, back into the bill.

So video game producers can now receive grant money under this scheme, without worrying about offensive content.

Then why the hell don't they spend tax dollars on education and welfare, oy? Oh, yeah. They have Rick Perry (R) and THIS IS TEXAAAAAS! The Re Tard State. They like their citizens staying redneck, oy. Now that I think about it Hank Hill is a perfect representation of Tejas. And I live here, oy.