Ahead of the game – SA government announces financial incentive for local video game development

29 June 2020

The South Australian Government has launched a new scheme to encourage the development of video games in SA. Video game developers may now be eligible for a 10 per cent rebate on qualifying production expenditure in SA.

The video game sector is worth $180 billion globally, with at least 67 per cent of Australians playing video games.1 The SA Government sees this as ‘an incredible growth industry‘, and intends that this new incentive will both assist local developers and attract international companies.2

The PDV Rebate in SA

The Rebate offers eligible productions spending more than $250,000 on Post-Production, Digital and Visual Effects (PDV) work in SA a non-discretionary Rebate equivalent to 10 per cent of PDV expenditure.3

Prior to this announcement, PDV expenditure has included expenditure incurred in the creation and manipulation of audio or visual elements of a film or television series (other than principal photography, pick-ups or the creation of physical elements including sets, props and costumes), such as visual effects work. This is being expanded to include expenditure on video game development in South Australia.

Screen Australia also offers a PDV Offset incentive, which applies in parallel to the South Australian rebate for PDV work in the film and television industry, but this has not yet been extended to game development in the same way.

The Rebate will be administered by the South Australia Film Corporation (SAFC). It is calculated on the basis of qualifying expenditure on qualifying tasks on an eligible project. The Rebate is available for PDV work done in SA, assuming that the eligibility criteria are satisfied.

The SA Government is the first Australian State government to extend such a rebate to the game development industry.

The scheme is the second SA Government incentive made available to SA video game developers, following the introduction of the Games Innovation Fund last year. The fund provides grants of up to $25,000 to game developers at all stages of development. Unlike the grants, which are awarded on a discretionary basis, the PDV Rebate will be available to all those who meet the eligibility criteria and is uncapped.

The expansion of the incentive, previously limited to the traditional screen industry, is an exciting development for the video game sector. However, other South Australian schemes, including Production Investment Grants, payroll tax exemptions and SAFC’s Revolving Film Fund, remain limited to film and television.

Game funding in other states

Although other States do not currently offer corresponding rebates, there are a number of funding opportunities available to game developers around Australia, including grants from State film corporations and other similar bodies. Other general State and Commonwealth schemes designed to support start-ups and businesses may also be of interest to game developers.4

HWL Ebsworth’s team of intellectual property, media and technology experts can advise game developers and publishers on funding arrangements and intellectual property protection. Please contact us to find out more.

This article was written by Luke Dale, Partner, Daniel Kiley, Special Counsel, Michael Boughey, Special Counsel and Kelly Williamson, Solicitor.

1. Jeffrey E. Brand, Stewart Todhunter and Jan Jervis, Digital Australia Report 2018 (2017) Interactive Games & Entertainment Association https://www.igea.net/wp-content/uploads/2017/07/Digital-Australia-2018-DA18-Final-1.pdf.

2. Government of South Australia ‘Game on! South Australia targets jobs and investment in $180 billion games sector’ (Media Release, 21 June 2020) https://www.premier.sa.gov.au/news/media-releases/news/game-on!-sa-targets-jobs-and-investment-in-$180b-games-sector.

3. South Australian Film Corporation, Guidelines: SA PDV Rebate (October 2018) https://www.safilm.com.au/wp-content/uploads/2020/01/Guidelines-SA_PDV_Rebate_Oct_2018.pdf.

4. International Games & Entertainment Association, Government Incentives for Game Developers in Australia (March 2020) https://igea.net/wp-content/uploads/2020/03/Government-Incentives-for-Game-Developers-in-Australia-200324.pdf.

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