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 WilsonSF is a tech/ economic/ trade center it should be mostly tail building. this whole problem is because of the lack of tail buildings. How would having tail apartment buildings destroy SF? having tail buildings has not runed other cities around the US/world04/16/2014 - 10:51pm
Matthew WilsonAgain the issue is you can not build upwards anywhere in SF at the moment, and no you would not. You would bring prices to where they should have been before the market distortion. those prices are not economic or socially healthy.04/16/2014 - 10:46pm
ZippyDSMleeYou still wind up pushing people out of the non high rise aeras but tis least damage you can do all things considered.04/16/2014 - 10:26pm
ZippyDSMleeANd by mindlessly building upward you make it like every place else hurting property prices,ect,ect. You'll have to slowly segment the region into aeras where you will never build upward then alow some aeras to build upward.04/16/2014 - 10:25pm
Matthew WilsonSF have to build upwards they have natural growth limits. they can not grow outwards. ps growing outwards is terable just look at Orlando or Austin for that.04/16/2014 - 4:15pm
ZippyDSMleeIf they built upward then it would becoem like every other place making it worthless, if they don't build upward they will price people out making it worthless, what they need to do is a mix of things not just one exstreme or another.04/16/2014 - 4:00pm
Matthew Wilsonyou know the problem in SF was not the free market going wrong right? it was government distortion. by not allowing tall buildings to be build they limited supply. that is not free market.04/16/2014 - 3:48pm
ZippyDSMleeOh gaaa the free market is a lie as its currently leading them to no one living there becuse they can not afford it makign it worthless.04/16/2014 - 3:24pm
Matthew WilsonIf you have not read http://arstechnica.com/gaming/2014/04/introducing-steam-gauge-ars-reveals-steams-most-popular-games/ you should. It is a bit stats heavy, but worth the read.04/16/2014 - 2:04pm
Matthew Wilsonthe issue is when is doesn't work it can screw over millions in new york city's case. more often than not it is better to let the free market run its course without market distortion.04/16/2014 - 9:36am
NeenekoTrue, and overdone stagnation is a problem. It is a tricky balance. It does not help that when it does work, no one notices. Most people here have benifited from rent controls and not even realized it.04/16/2014 - 9:23am
ZippyDSMleehttp://www.afterdawn.com/news/article.cfm/2014/04/15/riaa_files_civil_suit_against_megaupload04/16/2014 - 8:48am
ZippyDSMleeEither way you get stagnation as people can not afford the prices they set.04/16/2014 - 8:47am
Neenekowell, specifically it helps people already living there and hurts people who want to live there instead. As for 'way more hurt', majorities generally need less legal protection. yes it hurt more people then it helped, it was written for a minority04/16/2014 - 8:30am
MaskedPixelantehttp://torrentfreak.com/square-enix-drm-boosts-profits-and-its-here-to-stay-140415/ Square proves how incredibly out of touch they are by saying that DRM is the way of the future, and is here to stay.04/16/2014 - 8:29am
james_fudgeUnwinnable Weekly Telethon playing Metal Gear http://www.twitch.tv/rainydayletsplay04/16/2014 - 8:06am
ConsterTo be fair, there's so little left of the middle class that those numbers are skewing.04/16/2014 - 7:42am
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
 

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