Second Time Lucky? Australian Games Studios in Periods of Crisis

Girl Geek Academy

Much has been said about the games industry’s resilience to economic crises. In the years following the 2008 global financial crisis, games remained profitable, and the sector as a whole was heralded as ‘recession-proof’. Similar claims have been made about the present downturn: in 2020, global games industry profits rose well above predictions, driven by the immense success of titles like Animal Crossing and Among Us, which both broke into mainstream consciousness. As detailed national figures are not available, it is not entirely clear how Australian studios fared; however, in a recent Interactive Games and Entertainment Association survey, 76 per cent of respondents expected revenue to remain stable or increase in 2021. 

Although Australian studios do not appear to have shuttered en masse, it remains important to identify how conditions are likely to change in the long term. The immediate aftermath of the global financial crisis is informative: in Australia, the stability of videogame sales in the short term was secondary to performance in the years that followed, when international companies baulked at a strong Australian dollar, closing down their local studios and withholding contract work. The mass lay-offs – and many developers’ subsequent relocation to other countries or industries – created substantial gaps in expertise and infrastructure, some of which still exist.

With the notable exception of Sledgehammer Games, international Triple-A companies have not returned in the years since, and the Australian economy does not seem poised for growth. In other words, history will not repeat itself. But it is exactly the unique development landscape that emerged from the previous economic crisis that complicates analysis now. 

State government agencies have become increasingly important sources of game development funding. This year’s funding increase for Film Victoria is welcome news, doubling their budget for game development – but it is less clear that other states will do the same. Indeed, as the present lack of federal support for the arts demonstrates, a protracted recession may instead motivate cuts to state funding. Separately, contract work may not dry up entirely, but it may become more competitive as studios look for secure income to ride out the downturn. The developer survey described earlier provides tentative evidence that these trends have already begun: 11 per cent of respondents have seen declines in contract revenue, and 14 per cent reported greater difficulty accessing finance (albeit not exclusively from government sources).

To a lesser extent, problems in tertiary education are also likely to affect game production. The sector has been hit by a number of shocks: Prime Minister Scott Morrison told international students to ‘go home’, and the Federal Government deliberately excluded tertiary institutions from the JobKeeper scheme – then used changes in degree costs to recast the sector as workplace training. Consequently, most institutions have implemented lay-offs at an unprecedented scale, a process expected to continue well into 2021. Among them was RMIT, whose game design courses have graduated a number of critically and commercially acclaimed game makers in recent years. At RMIT and elsewhere, the knowledge gaps created by staff departures and reduced casual hours are likely to persist well after international students return. Even QUT, which largely managed to avoid laying off salaried employees in 2020, faces similar budgetary problems that will likely overstretch teaching staff in its games program. Distance learning compounds these issues in the short term.

The effects of a national deficit in games education may not seem particularly important – few Australian studios have the resources to train and mentor junior staff; more commonly, graduates work on their own projects after leaving university – but this self-reliance will only exacerbate the issue: in the absence of the training that would normally occur in junior roles, improvement as a practitioner will remain a mostly individual responsibility. Amid ongoing difficulties with attracting and retaining overseas staff and an exodus of senior developers to other countries or careers, juniors represent a substantial cohort within Australian games scenes. For this reason, the professional development offered by organisations such as Girl Geek Academy and The Working Lunch, alongside existing practices of informal mentorship, will become increasingly essential.

These concerns collectively suggest a somewhat gloomy outlook for Australian games over the coming years, though a collapse on the scale of the previous crisis seems less likely. It is true that global revenue from game production during recessions tends to remain stable, or even increase. But much of this revenue is produced by a tiny fraction of companies far larger than any studios in Australia. To generalise the games industry as ‘recession-proof’, then, is to conflate the financial success of these large companies with that of the three-person indie studios that comprise much of Australia’s game development landscape. Similarly, although this article has discussed ‘Australian studios’ at large, their futures are also shaped by more local factors, ­situated within states and individual scenes. The industry’s collapse after the previous crisis led to a stronger sense of collectivism among Australian game makers that extended beyond individual companies. The same support networks will be instrumental in finding ways to survive – and, ideally, prosper – in the years to come.