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New tax offset a video game changer for local developers

May 12, 2021

New tax offset a video game changer for local developers

A new 30% tax offset for video game developers has been welcomed by Australia’s burgeoning local industry.

A new 30% tax offset for video game developers has been welcomed by Australia’s burgeoning local industry.

The refundable offset was announced by the Federal Government last week ahead of the release of the Budget, and will apply to businesses that spend at least $500,000 on qualifying Australian games expenditure.

The offset is part of a broader ‘digital economy strategy’ aimed at turning Australia into a leading global player in the sector by 2030

The Interactive Games and Entertainment Association said the offset is one of the most significant tax incentives for game developers anywhere in the world.

“This is a very welcomed day for Australian-made video games,” IGEA CEO Ron Curry said.

“This new federal investment will underpin a new wave of Australian video game development, leading to even more amazing Australian-made games to take to the almost $250 billion global video games market – which is arguably the largest entertainment market in the world – and bring new Australian voices and stories to a truly global audience.”

TJ Munusamy – executive vice president of business development for ASX-listed developer PlaySide Studios – said Australia already has some of the best game development talent in the world, and this offset will support the fledgling industry to capitalise on the industry’s growth.

“Game development is an enormous business, bigger than music and movies combined, and its growth is outpacing most other industries,” he said.

“The government’s investment in this space will drive economic growth, exports, digital skills and jobs for creative and innovative Australian talent.”

The local industry has been lobbying for this kind of support for more than a decade, Mr Munusamy said, and this announcement came as “welcome news”.

PlaySide gets involved in the ‘family business’

Last week PlaySide revealed it has signed a license to produce a mobile game based on the iconic mafia film The Godfather.

Originally released in 1972, The Godfather made US $285 million globally to become the highest-selling film in history for a time.

PlaySide Studios CEO Gerry Sakkas described it as “the quintessential crime movie”.

“As an avid Godfather fan, I am eager to show the world a true Godfather experience on mobile that we believe will appeal to audiences across multiple generations,” he said.

“We look forward to making fans an ‘offer they can’t refuse’.” 

The multi-year agreement –  signed with ViacomCBS on behalf of Paramount Pictures – will give PlaySide the rights to develop a title for iOS and Android incorporating themes and branding from the film.

PlaySide will pay a number of licensing fees to the film’s intellectual property owners during development, and enter a profit-sharing agreement after the game is released.

The deal comes fresh on the heels of a similar agreement between PlaySide and Metro-Goldwyn-Mayer to produce a game based on the Legally Blonde franchise.

Both titles will be developed over the remainder of the year, with Legally Blonde due for release in late 2021 and The Godfather slated for 2022.

 

To stay updated with the latest company news and announcements, please register your details on Playside Studios’ investor centre.

 

Reach Markets have been engaged by PLY to assist with private investor management.

Sources:

 


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