Savannah Orgs Offer Free Rent to Game Development Firms

Savannah's Creative Coast Alliance (TCCa) and the Savannah Economic Development Authority recently announced that they would provide up to one year of free rent for game designers to take up residence at the region's new Game Development and Digital Media Center. The offer is intended to promote the city's image as a center for game design and help provide local opportunities for graduates from the Savannah campus of the Georgia Institute of Technology and the Savannah College of Art and Design's (SCAD) Interactive Design and Game Development Program. For the past five years, SCAD has sponsored the annual Game Developers eXchange, a national event for the industry that has drawn greater attention to the region. In the press release announcing the free rent offer, TCCa bills Savannah as an alternative for companies looking to establish an East Coast presence with a low cost-of-living, high quality-of-life and a rich talent pool.

The release also highlights the incentives the state of Georgia has put in place over the past few years to entice game developers. Last year, the Georgia Department of Economic Development expanded the Entertainment Industry Investment Act to provide a 20 percent base tax credit on all qualified expenditures within Georgia, such as labor, materials, and services. The state offers an additional 10 percent credit if the firm places a state of Georgia promotional logo within the games they design.

By targeting video game developers, Savannah and the state of Georgia are hoping to buck some of the trends affecting the national video game industry. Despite the sluggish economy, sales of game hardware, software and accessories were up 19 percent in 2008, according to the industry-tracking NPD Group. Game design studios, however, reported losses and massive job cuts. Much of the disconnect between the high sales numbers and industry losses is due to ballooning development costs, according to a recent article in Slate magazine. The transition to high-definition games and more refined game engines has inflated development costs and prompted losses from industry heavyweights like Electronic Arts and Activision-Blizzard even as demand grows.

As a result many jobs in the industry have been lost and studios have started closing branch locations around the country. Electronic Arts announced in December that the company would cut more than 1,000 jobs, including staff at the Maitland, FL-based EA Tiburon branch. Ensemble Studios, a Microsoft-owned developer in Dallas closed last month, while Austin branches of NCSoft and Midway cut more than 100 positions last year. This week, THQ announced that it would close its Champaign, IL, quality-assurance facility.

Georgia is not the only state trying to draw in new game design jobs despite these layoffs. Last year, Michigan became one of the few states to include video game studios in its package of incentives for film production companies. The state offers a tax credit of up to 42 percent on project expenditures. Texas offers grants of up to $ 250,000 for game development projects in the state (see the July 11, 2007 issue of the Digest).

More information about the Savannah initiative is available at: http://theoffer.thecreativecoast.org/