Descriptive profile of the Austin interactive industry
The capital of Texas currently ranks second nationally for video game development thanks to its approximately seven thousand inhabitants who are dedicated to the industry. There are more than 100 studios in the city, and of those, between 20 and 25 are world-renowned studios, such as Zynga or EA.
This is the best place because no one will turn their back on you when seeking advice. According to Frank Coppersmith, Chairman of the International Game Developers Association in Austin, Texas competitors – California, New York, Boston – do not value companies; they do not offer accessibility to settle in the state. Instead, Texas always finds a way to make you feel welcome; If you have questions, you can get answers and you don’t necessarily have to be a millionaire.
Another reason why Texas is considered a great opportunity is because it has one of the most important tax incentives in the country; which offers subsidies to employees within video game productions. For next year, Texas lawmakers will award $ 85 million to the program.
Within the interactive media industry, this sector exceeds the total revenues of the film sector, therefore, jobs tend to be more stable. If you create a video game studio, it can take three to five years until you distribute the product. a movie lasts 90 days.
Video games grow 8.5% every year, but it is important to know that it is not enough to have good ideas, creative talent or distribution access, you have to have capital, as the developers themselves say: “no money – no game”. For an investor, the interesting thing about this sector is that it has a high risk but a fast return of money. A restaurant, for example, takes years to get a return, video games take 18, 12 or even 6 months. According to Coppersmith, if you are looking for a financial return on interactive media, video games are better than the seventh art.
In the last 10 years, this industry has undergone major structural changes. Initially there were two platforms: the consoles and the PC; and in any of them, you had to have an editor. They were the gatekeepers, if you had a good game – they would fund it, if you didn’t – you would be out of business. Then the iPhone came along and suddenly no one needed an editor, anyone could publish a game. And that could have been great – for a while. The problem is that when there is no gatekeeper, it becomes much more difficult to make money. Today, you have the mobile, the PC and the consoles; so making a living in this sector is very exciting and at the same time very complicated.
That said, it’s important to know that success depends on the platform. But you have to understand the different types of success, one thing is to get a return on money and another is to buy a golf course.
Mobile phones are the only ones where you could have the opportunity to buy a golf course. The first five apps on the iOS App Store make millions of dollars a day; the next five make hundreds; between the 10th and the 20th they make thousands; and the other 80 make very little money. Most of the games are free, so the monetary income is through the sale of virtual goods. The bad news is that more than 3,000 games are released per month. Investment: $ 50,000 dollars, return: 6 months.
The PC platform is curated, they hardly let anyone in – only very few. But if you do get in, you’re guaranteed to get your money back and more. Investment: $ 50,000, return: two years.
The console is also curated, it is more difficult to get in and developing a product is expensive. Investment: one million dollars, return: four years. But if the players like it, they will buy the second season.
The new trend in Austin is virtual reality and augmented reality. The virtual works through the technological experience that puts it into action. For example, you may be on a virtual roller coaster. However, this is not ready for sale yet, but the industry is trying to ship 5 million units this year, 50 million by 2018.
Augmented reality works with advanced technology where you see a world but then there is an overlap of something, like a plane, a three-dimensional plane. The oil industry and the medical sector are some of those that use this technology the most.
On the other hand, Austin has an excellent academic offering. Austin Community College has a two-year program for customer service and quality assurance. St. Edwards University offers a graduate curriculum, Interactive Gaming Studies. And the University of Texas at Austin partnered with two industry leaders to create the Denius-Sams Gaming Academy, the first program in the country taught and mentored by industry executives.
The Texas Film Commission, which administers the state’s incentive program for the video game industry, estimates that Austin has more than 100 production studios, most of which are staffed by small (fewer than 10 employees) and medium ( 11- 50 employees). Since 2007, Austin companies have received nearly $ 10.3 million in state incentives.