COVID-19 has affected multiple industries in Australia and around the world for over a year now. The most affected being those who work in the tourism and hospitality industries where tourists were initially scarce due to the obvious circumstances. Many other industries have also been affected but were lucky enough to continue with business as usual in some shape or form, including working from home.
What other activity can be done well from home? Bloody gaming!
Last year I wrote about the positive impacts of gaming during the pandemic, particularly in regards to MMO’s. Gaming was massive business with the amount of time people were spending in lockdown. In 2020, overall video game sales surged 35% in Australia alone. Nintendo Switch consoles were flying off the shelves and it was impossible to even find a physical copy of Animal Crossing: New Horizons. Which topped the sales charts for 2020.
As video game sales sky rocket with everyone at home, what about the people making video games? How has the global pandemic affected our local video game studios? Judging from the latest survey by Interactive Games and Entertainment Association, aka IGEA, the Australian game industry is on the up and up.
According to IGEA’s report, 62% of respondents reported stable or increased overall revenue. While 54% of respondents reported stable or increased sales revenue. This is quite a jump in comparison to figures reported in 2020. Especially in regards to overall revenue which has almost doubled in the last year.
Which is awesome news with the announced 30% Digital Games Tax Offset available from July 1, 2022. With the Tax Offset, desirable studios who spend at least $500K will be eligible for the 30% refundable tax offset. Which is great for both business and the economy as it could lead to the possibility of bringing international studios to Australian shores.
So how have video game studios been doing so well during this difficult time?
Like many other businesses, studio offices shut shop once the world went into lockdown But luckily, due to the nature of work required, developers were easily able to continue their work from home. Which according to IGEA’s figures from last year, took time getting used to.
However, productivity while working from home has increased over the last 12 months. This years report shows 50% of respondents claiming that working remotely had “some impact” on productivity. Which is 7% less than last years findings. A “significant impact” on productivity from respondents jumped down from 16% in 2020 to 10% in 2021.
As Australia continues to be a low risk country where/when we can, developers are starting to transition back to a normal work life. But it’s still baby steps at this stage. Offices may be starting to open their doors once again but only few workers are there at one time due to restrictions. 60% of respondents have come back to the office but are also balancing it with work from home.
The versatility of being able to also work from home has also opened doors developers looking for work. With the nature of working remotely, interstate and international developers are being considered by local studios.
28% of local studios are already looking to hire international talent with 33% are hiring talent interstate. However, the majority are still hiring local talent at a whopping 79%.
But while there are bunch of positives that have come out of IGEA’s findings, there are some negatives as well. Unfortunately, not every studio has had a stellar time during the pandemic. While 50% of survey respondents are increasing staff numbers, a small 4% are planning staff redundancies. And 31% reported loss of contractual revenue.
Smaller studios that are still growing have also had a difficult time during the pandemic, some of whom requiring help with funding to get ahead. Which is another reason we should be supporting smaller studios/developers and for more funding options to become available. The upcoming 30% Digital Games Tax Offset may be a great thing for the our local industry, but not every small studio/developer is going to make that required 500K minimum spend.
Many have also felt affected by international travel restrictions. Shaking hands with contacts globally and networking as such through trade shows has helped studios get their games out there. But 61% of respondents have said that the inability to freely travel has negatively impacted business.
Unfortunately, there’s no time-frame on when things will ever go back to normal. In the worlds current state, things will continue to be a challenge for some. However the majority have been able to adapt and keep the gaming world spinning, especially those in our local industry. And with any luck, we’ll continue to flourish post-pandemic.
