Tony Reed on the R&D Tax Credits Bill and what the GDAA have been up to

News: 

Gamespot AU's Laura Parker cornered Game Developers Association of Australia (GDAA) CEO, Tony Reed, to discuss a few things about the $1.8 billion R&D tax credits bill that was passed recently and what it offers to the local games industry.

The GDAA CEO explains that the R&D tax credits bill is highly compatible and accessible to games developers since games development is all about creating new concepts, software and tools. The bill will offer registered local studios that have a less than $20 million turnover the ability to claim 45 cents in the dollar in expenses back whilst those with a higher turnover can still claim a limited amount.

From Gamespot AU...

(Tony Reed) No matter how big or small a studio is, this is the kind of thing that will encourage development. It is designed with our own independence, creativity, and innovation in mind. Our goal at the GDAA is to prepare Australia to become one of the top three territories in the world for game development within the next five years. I think this can be achieved--the industry is doing really great right now and we seem to have gone back to our roots in generating amazing content.

Tony also describes what the GDAA have been busily doing for the local industry recently, listing their involvement with the R&D tax credits bill, the Digital Media Initiative in N.S.W, and programs for the Federal Government. They're also putting some attention in the education sector with a planned audit of the courses available, and the organisation is looking into finance and investment models for the industry.

Comments

designerwatts's picture

Tony did a fantastic job on this interview. :)

souri's picture

Highly informative. The middle part of the interview with the questions about high game prices was a bit of a curve ball, but Tony did an excellent job at answering that as well.

Ty Carey's picture

Yes - we're lucky to have a guy like Tony Reed out there battling for the industry.

Anonymous's picture

I wonder if the people singing his praises even really know the guy or his policies.

Hate to say this, but he was one of the architects of the "get big and survive" strategy that was an utter failure for the bigger Australian studios and a keen promoter of fee-for-service / work-for-hire work as the future for the industry. In fact, I'm surprised he's even acknowledging the success that the indies -- smaller studios -- have had with original IP; I'd have to watch the vid in full, but I think that this is simply people's interpretation of what he has said not what he actually was saying -- or sidestepping.

If you think that he and the GDAA give a damn about indies, then take a closer look at the conference he helped put together in Sydney.

souri's picture

There was nothing wrong with work-for-hire until the unimaginable happened a few years ago (GFC & dollar reaching parity). Work for hire was a great way for startups to get themselves established (Firemint and Halfbrick are prime examples). Devs however, should not have relied on it soley, and those that did got hit hard during the financial crisis.

And as for the GDAA not giving a damn about indies - really? You reckon the R&D tax credits bill will do nothing for indies? Tony must be wasting his time speaking to the IGDA Melbourne crowd (who are mostly indies) on how they can benefit from that next week then! /sarcasm

And the Digital Media Initiative in N.S.W which the GDAA helped out with - did you have a look at the list of developers who are now funded for their projects from that?

Anonymous's picture

If I am not mistaken, the R & D tax break is really geared towards technology development. In other words, middleware.

Technology commercialisation and work-for-hire are both bad choices for indies to take in order to develop original IP. And, it does not surprise me that Tony is speaking about it as from a business perspective, technology commercialisation has always looked good on paper from an investment point of view -- easier to explain and build a business model that investors can "measure."

Being foremost a business man, it is something that he will gladly espouse as being a course of actions for all developers to take regardless of the pitfalls of doing so -- like work-for-hire and the "get big to weather the coming (GFC) storm" strategy.

As for the R&D tax break itself, this is something that has been batted around for quite a while now and I think that it being opened up more towards "games" has really come about because of the film industry wanting to establish their own interactive-media (transmedia) industry. If it were just game devs asking for this, you'd still be asking for it. Tony Reed and the GDAA haven't had that much influence over it; and this also goes for the DMI funding now available for NSW -- the people running it are from "film" NSW.

You are giving them more credit than they actually deserve.

As for the "unimaginable" happening, maybe for you it was, others said it was coming -- hell, even Tony Reed agreed with me on that one, he just espoused a different strategy to the one I saw as working and being of most benefit ;). And as for there being nothing wrong with work-for-hire, that really depends upon the basis of that kind of work and the deal struck. As far as I am concerned, it was largely a major sickness of the industry prior to the GFC and the rise of digital distribution and the popularity of downloadable apps. These last two in my opinion are the reasons why the mentioned Halfbrick and Firemint studios managed to do so well -- not because of relying upon work-for-hire up until that point, but because these meant they could create low-budget, original IP titles without having to rely upon publisher investment.

Prior to that I don't recall them doing so well, as there is no long-term future in relying upon work-for-hire.

In Firemint's case, I think in the long-run it may have hurt them, that, and not being able to overcome their own shortcomings when it comes to complexity of the original concepts they wanted to develop -- they said as much themselves.

souri's picture

I don't think, well, previous iterations anyway, of the R&D grant was as restricted to middle-ware as you might have thought. BigWorld tech and Auran's Jet engine were funded through it, sure, but I do recall a fair few mid-sized games studios received the grant to develop their own in-house engines and tools. Perhaps the most well known R&D grant awarded to a local game dev was the $1.7 million that Krome Studios received for their (then) next-gen PS3/Xbox360 engine. In any case, the R&D grant did not ever mean commercialised middle-ware only.

I don't know much about the current R&D break so I'm going to leave that job to those who are more knowledgeable on it - although I imagine you're an indie developer (otherwise you would not have lamented about the GDAA and their lack of attention to indies). If you are based in Melbourne, I'd highly suggest you head on over to the IGDA Melbourne open mic night that's on tonight where Tony will be explaining how it will help indies in detail. I've seen Tony chair many presentations where he implores the audience to question the speakers at hand if they have any queries, and I'm sure he'll be more than happy to answer anything you have on the credit break.

Well, I certainly didn't see the GFC coming, but then again, I wasn't following the housing bubble and its collapse in the U.S. Honestly, was anyone else?

"Prior to that I don't recall them doing so well, as there is no long-term future in relying upon work-for-hire."
It gave them a steady and reliable flow of work, which I think is the whole point of work-for-hire and startups. It doesn't offer that opportunity any more, obviously, but I'm not sure why you are trying to publicly shame someone (who has since denied your allegation) that they were promoting work-for-hire way back when it actually was a viable step for new developers. No one has been talking favourably about work-for-hire for a long time now.

designerwatts's picture

I can't speak for the stuff that Tony has done previous to joining the GDAA. But I can say that he's been a great help to me and my business.

Having worked in the same open office for a period almost 18 months I have to say that Tony is one of the best bridges the local games industry currently has in talking to the various state and federal governments about what we do and why we're relevant as an industry. I always see him chasing up opportunities to better promote the local industry. And from talking to him he has multiple focuses in mind.

He's always been happy to sit down and give his point of view and advice in matters of business and it's nice to get a point of view from someone involved in the publishing and business side of games dev. Some of his advice was key in how I presented my games proposals to Film Victoria.

At the bare minimum he's helped out this Indie. :)

NathanRunge's picture

I'm most interested in this "audit" of the education courses that are available. We have an inordinately large number and, let's face it, the majority aren't very good. I'll be watching that with interest.

Mark Flanagan's picture

I've actually just started a linkedin group, with a view to discussing and improving all of our courses.

It's very early days yet, but feel free to wander over and have a look.

http://www.linkedin.com/groups/Australian-Games-Education-3985614?home=&...

Antony Reed's picture

While I strongly believe in a person's right to their opinion, I also believe any ventured opinion, especially one made in a public forum, should at least have a basis in fact. Comments made in two of the above posts are factually inaccurate, lack insight into the work that has been done by the GDAA and, I believe, are a misrepresentation of me and my character.

Before starting I would like to extend an invitation to 'Anonymous' to meet with me to discuss the points raised in his/her post. I would be happy to sit down and reveal exactly how much involvement I, or other GDAA members, have had in the development of the initiatives discussed.

Onward.

That I was an architect of the 'get big and survive' strategy is blatantly false. I might have worked with a number of development studios in Australia, and prior to that some of the biggest publishers in the world, but having never had any pecuniary interest in any local studio it has never been my decision to make. In actuality there is existing communications between me and several studio heads discussing planned growth and the risk to long-term viability. I have never, and would never, advocate growth without the proper support mechanisms in place to sustain it.

As to my engagement with the indie community it is unfortunate that 'Anonymous' has no awareness of my relationships with many of the local indies or the work that I am doing on their behalf; work that is being supported financially by the indie, independent and publisher-owned members of the GDAA. The Board of the GDAA has indie representation and a mandate to provide support to the sector.

As for the conference in Sydney, I am assuming you refer to Gametech. The GDAA did endorse the conference based on the original intentions of the conference organisers. Neither I nor any member of the GDAA had any involvement in the organisation of the conference. I was asked to chair the second day, which I agreed to, during which I made references to the influence of games on popular culture, including highlighting the importance of indie developers in a room full of publishers.

Unfortunately I don't know if the first Anonymous is the same as the second Anonymous, but the following addresses points raised by the latter.

Your version of the development history of the revised R&D tax legislation, that it's geared toward middleware or that film had some influence on the process is unfortunately quite wrong. Your view that the NSW Digital Media Initiative was developed and is being administered by the film agencies is also erroneous. The GDAA has been very involved in the development of these programs, and our involvement continues.

The comment that I think from a business perspective is spot on. Most of the people I engage with in the industry want to make a living doing what they love. It is those conversations that inspire me to develop new initiatives for the industry. They are the reason I speak with State and Federal government stakeholders and the financial community promoting the ability and capability of the Australian industry - the whole of the industry. My views on the opportunities created by work-for-hire contracts haven't changed and a true understanding of the histories of Firemint and Halfbrick (as the two examples cited) would suggest that my standpoint is correct.

Finally, I do believe that the GDAA has not been as conversational as it could have been and many in the industry are unaware of the work that we have been doing. The game development industry has the highest level of awareness within the walls of Canberra and in the local investment community than it has ever had, and there are many more programs in development aimed at cementing Australia's position as a leading game development territory in the future. I will do my best to improve those communications.

I would also like to take this opportunity to thank those in the industry that have been so incredibly supportive of my and the GDAA's work over the past 18 months. This includes the heads of industry that I bounce ideas off on a regular basis, the local chapters of the IGDA and the IGDA executive in the US, the media (thanks Souri), and participants in the industry that share their thoughts with me on the phone or at industry gatherings.

Best,

Tony Reed
CEO, Game Developers' Association of Australia

Anonymous's picture

That's a long post, I hope you didn't have to spend too much of your weekend writing it.

You're right, I don't know of your current work with indies, but considering that indies are generally where we are seeing the most success and growth -- depending upon how you measure it -- than this is no surprise. I'd imagine that they make up a large segment of your "clients" these days -- or however you want to refer to them, no hidden meaning implied.

Perhaps you weren't one of the architects of the strategy Tony, but, you did espouse it as a valid strategy -- at least to me. Only later was it evident that it was a strategy that failed, and failed, miserably. Hell if it were my strategy, I'd want to distance myself from it as well ;).

Though, it is clear that you are quite passionate about your work, I still question whether promoting strategies like work-for-hire and technology commercialization are a good idea when it comes to indies and original IP. That is without properly understanding how it can work in very limited cases, and especially, as any success we as an industry are seeing are due to original IP and the advent of digital distribution.

You can reply to this in order to defend yourself if you like. I know how irritating an anonymous poster can be, so, I won't be compelled to write another based on you doing so ;). At the end of the day, if indies want to (poorly) utilize work-for-hire and technology commercialization (R&D tax break) then they are more than welcome to. I won't stop them as it is none of my business and I don't care to make it so. My original comment was off the cuff and aimed towards people making things out to be more than they are and perhaps not realizing what that can potentially mean. It was not to get into a long debate about these matters in order to convince others of my "rightness." As writing long posts (letters) as your own are kinda a pointless waste of time.

Though if anything, perhaps this has sparked the GDAA to be more transparent along with visible.

Anonymous's picture

I'll add for clarity, that as I was following up on an off the cuff remark, I did not double check some things. For instance, the R&D Tax Credit which is going through changes and has gone through changes since last I looked into it. Also, I may have mixed in an investment tax break for film projects and an old initiative called COMET; which I know think is defunct.

As it was not my intention to get into a debate about these things, I did not look into it afresh but considering you've gone to the trouble to comment, I just wanted to add some further clarity.

I still have yet to sift through the material available about it, so at this point I don't know how much of this revised initiative has to do with technology commercialization or how much benefit it could have specifically for indies.

Anonymous's picture

Hmm, so you don't know what the article is about, and yet feel your opinion on it is valid and worth expressing.

A bit of homework can go a long way...

Anonymous's picture

Yes, I do quite frankly and my opinion of the GDAA hasn't changed -- I do not agree with all the claims made by Tony above, for instance. As for the R&D tax credit, it seems to be rather limited in it's applications for indies and does run the risk of things ending up going down a technology commercialization route. Why I didn't like it in the past and why I'm not that hot on it now. But as I said, people are free to make up their own minds, make their own opinions, and even voice them ;).

Believe it or not, but I have done my homework, have you?

NathanRunge's picture

Do you really feel that this is any better? Whether or not you agree with his/her assertions, you don't know whether or not he has researched them and he hasn't erstwhile claimed them to be other than his/her opinion.

Anonymous's picture

Yeah, the original comment was on the potential gullibility of commentors here not on the article itself.

NathanRunge's picture

I simply wished to applaud you for taking the time to offer a tempered, but assertive, post in your defence. You do the community credit in this respect.

Mark Flanagan's picture

I haven't always agreed with the Gdaa in the past, and will probably not always agree with them in the future, but I know that Tony has helped a lot of indies, many of whom are friends of mine, going out of his way to do so.

I also don't know what impact the new legislation will have (I struggle doing my annual tax return). I'm pretty sure it won't be a bad thing for the industry, it is a step in the right direction.

I'm prepared to wait and see how it works out for developers. In a couple of years we can get a picture of how it's going.