Australian games industry has been "obliterated"

KMM Brisbane is latest studio to shut doors in region

Australian studio KMM Brisbane has closed less than a year after opening its doors, becoming the latest developer to shut down in the region following tough economic times.

The team of around 40 was made up of a significant portion of ex-Krome Studios staff which closed last year.

"The writing has been on the wall for a long time," Jason Stark, studio director at Krome told ABC. "But it's maybe a little surprising the extent to which it has happened.

"We've all expected the industry to be shrinking - it's been bad times. It's gone from being a mild contraction to being pretty much obliterated."

Stark blamed a lack of new projects, the poor Australian dollar and tax incentives in other regions for the decline.

Since 2009, console studios such as Pandemic, EA's Visceral, Krome and Team Bondi have all closed.

Stark claimed around 90 per cent of local developers are moving overseas to places such as Canada, "where streets are paved with video game gold."

"I'm personally not a believer in subsidising industries - I believe the free market should take care of it," he added.

"But having said that, we're losing a lot of talent, and your nation quickly gets to the point where if times do come good again, we're not going to have enough experienced people here to start the companies."

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Latest comments (21)

Harrison Smith Studying Games and Graphics Programming, Royal Melbourne Institute of Technology6 years ago
Its made worst with all our Universities starting to offer games related degrees and hundreds of graduates a year now, while some like myself understand that there is no easy road afterwards and its going to be a big disappointment for many once they discover there is no jobs and what jobs there are, they all cant get because there is too many experienced people contesting for the 1 or 2 positions at a small studio. I was speaking to my fellow class mates and they had no idea that all these studios closed and that is is basically zero chance of getting into a big studio since there is none. Thankfully with all these Free SDK's and development tools like Unity and market places with low entry barriers,It will keep many of them occupied and hopefully bring success to them.
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Terence Gage Freelance writer 6 years ago
Wasn't KMM the company who bought up Team Bondi; i.e. the same studio which was working on Happy Feet 2 as well?
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Blaise Guy Studying Bachelor of Games and Interactive Entertainment, Queensland University of Technology6 years ago
Unsurprising, still disheartening.

Australia's going to be the Guerilla Games faction of the world at this rate (although it was already half way there)

The fact that our ISP costs are still some of the world's highest doesn't help with distribution and server hosting, either. No, I think we're definitely heading towards the indie breakdown/regroup scenario.
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Show all comments (21)
Neil Young Programmer, Rebellion Developments6 years ago
@Terence - I'm not sure they ever picked anything up from bondi, but the rumour was they were after staff and or assets at one point.
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Neil Rennison Creative Director, Tin Man Games6 years ago
Now is the time for innovation for Aus devs and we need to follow the lead of companies like Firemint, Halfbrick and Iron Monkey who have carved open new business models in order to succeed. How can the industry be "obliterated" when some of the most popular games on one of the most popular gaming platforms, the Apple App Store, are all developed in Australia? Combined with the recent R&D tax incentives and a wealth of talented indies, it's far from doom and gloom.
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West Clendinning Senior/Lead Artist, Rovio Entertainment6 years ago
It's not so easy for Australians to go overseas to work either, other than the UK, work visas are a hastle to get and most companies won't bother dealing with them. This would mean competeing against everyone already in the UK and EU region, very difficult to do. So I don't think there will be a significant brain drain from Australia, more likely we will see more indie studios doing smaller productions.

Edited 1 times. Last edit by West Clendinning on 18th October 2011 4:21pm

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Dave Herod Senior Programmer, Codemasters6 years ago
@Neil Rennison: I think a lot of people still overlook iOS and mobile games when talking about the games industry. I think what people really mean is it's depressing to see companies unable to make the large scale games, every week it's a AAA studio closing and the only new start ups you hear about are iPhone or mobile developers. I tend to overlook mobile games and facebook myself, because they're of almost zero interest to me, either to play or develop.
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Julian Cram Producer 6 years ago
@ Neil: Considering Firemint and Iron Monkey are now both owned by EA, I wouldn't be heralding that as the way forward for Australia.

In fact, neither have done anything to set the world on fire since being acquired, and I'll be very surprised if they're around in a few year's time.
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Have to agree, its been a pretty sad 3-4 years for the industry. The final straw was really the strong $AU.

My last friend here who used to work in the industry - is on a plane tonight for a games interview in the US. Hopefully he'll get it, there isn't much for him any more...
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John Welsh Program Manager Defence/Serious Games SME, Sydac6 years ago
There has to be a greater uptake on alternative applications of those skills generating applications that support the needs of other industries. Given the talent available and the diversity of areas of need that would so benefit from the entire range of serious game applications in all their guises Australia could be a capability world leader. Time to get on with it.
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Alex Hutchinson Creative Director, Ubisoft Montreal6 years ago
As someone who started in the games industry in Australia and left almost a decade ago, I agree with all the comments in the original article, but would also add that in the last decade there has been a decided lack of good, profitable games. Australia has helped on some successful titles like Dead Space or Bioshock, but has not been a lead platform on any. When the biggest critical success is L.A. Noire which was (apparently) production hell, and probably won't recoup its costs, it doesn't sound like a good place to do business.

People talk about the amazing talent pool, and I have plenty of great friends there who I would hire (one of whom is moving to Canada later this month) but as a group, there has been a complete failure to create successful games on a large scale, and a failure to create innovative products on a small scale.

It's certainly possible, it just hasn't happened, and this is an incredibly competitive business.

Edited 2 times. Last edit by Alex Hutchinson on 19th October 2011 10:30pm

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In a nutshell, overall there hasnt been a proven successful completed Aussie lead project from start to finish, on time, on budget.

The talent is there, and likewise I have many friends and colleagues in Australia, and in their own highly talented, skilled and experienced.

but collectively (if you stick them all in one room with a vritual company) there still has sadly been no proven effort for long term sustainability which invites further investment. Hopefully in 3-5 years time, there may be green shoots?
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Stephen Knightly Chairperson, New Zealand Game Developers Association 6 years ago
Quite a few Australians have moved next door to New Zealand, whose games industry already has a strong mobile and online gaming scene.
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James Cullinane Deputy Editor, Gameplanet NZ6 years ago
The Australian dollar is far from "poor", that's the problem. "Unfavourable" perhaps?

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jim ellis 2D/3D artist, design, illustration, concept artist, video editor 6 years ago
I fully agree with Starky - its shocking how the Brisbane scene crumbled. After THQ went down it was the final straw - though I'd seen the writing on the wall long before it occured; especially when Krome went. The free market SHOULD be enough - but its not. Canada is artifically competing int he way it always has with incentives. It did in with the animation industry. China's incentive is exploitation and undercutting and using its talent (which it has indroves). The free market doesnt work anymore. PS at Opus Arts. The last project I finished at THQ was on a 22 man team - tiny budget - completed for half of the original budget and arrived 2 weeks early. And at Krome - working with Rare/MGS - Pinata - 9 months. So AHEAD of time and budget - yes....
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Chris Gander6 years ago
Graduates need to adapt to the changing landscape. Working for big studios on major game releases is just not a realistic goal these days, if you plan on staying in Australia. Instead, graduates should look at working for smaller game development studios like Firemint, Dinoroar, or us (3RDsense). Either that, or combine their game dev degree with marketing and hope for a job at a leading ad agency (like Tequila, TigerSpike or Holler) working on cutting edge digital campaigns. If the graduate manages to work on an award-winning campaign that gets recognition globally, getting a job in a big game studio will become infinitely easier and that much more achievable.
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Jamie Watson Studying Bachelor of Games & Interactive Entertainment, Queensland University of Technology6 years ago
Sad..but true.

i too am like many other students studying a game degree only to know that job prospects are out the window as for late.

it is possiable for this too all turn round though..

still now is time to start looking at other job choices..
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Tony Johns6 years ago
If the Australian Game Developers rellied on the Australian Dollar to be < US Dollar, like on 50c AUDto $1 USD, then they are only going to set up to fail when the Australian Dollar in on par with the US Dollar.

I hate it when people use the excuses of the Australian Dollar being high that means that we can't compete against oversea's markets, we will never have a vital games industry in this country if we all blame the economic conditions and the Australian Dollar.

We should also not blame that our local industry has been largely ignored even during the better days of 5 years ago.

What we should all do is have a good hard look at ourselves and the games that we are making locally, and then look at the games being made by other companies in other countries, and it is not hard to see why we are so bad as a games business in our country.

And when it comes to the lack of good games being developed in Australia, I can say that we do have a good quality games being made in Australia.

De Blob and Puzzle Quest.

The only problems are, we don't develop enough of them.

And we only are able to develop sub par realistic games and even half made sport licence games that get trounced by EA Sports with titles like FIFA, NBA, NFL and other American sports licence.

We should focus on either competing with the best in realism, or get out of trying to make realistic games and try to make smaller games that don't relly on realism just to sell.

Get into the Casual market that is not always in iPhone or iPad games, because we all know that Broadband is not going to cut it in this country when there are other countries that have faster systems than us.

We need to evolve and make original games that stand out against the rest, or die.

It was sad what happened to Blue Tongue studios because they made two fantastic De Blob games before THQ dropped out their publisher support from under them. But THEY had what is perhaps Australia's best version of a platformer to Nintendo's Mario.

And what sort of creative games we Australian developers should strive for, and it didn't rely on making realistic games that cost allot of money to make the developer go bankruped...unlike Team Bondi as amazing as LA Niore was, the cost of such a project and the developer hell behind making the game is one thing Australian Developers don't want to repeat.

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Tony Johns6 years ago
Also I have long had a goal to move out of Australia and try to work in Japan, maybe go to Canada first and then Japan.

I know that if I was stuck here in Australia, I would only ever be working on iPhone iPad games that never get into the top bracket to get noticed by those who only look though the first few pages of the most downloaded titles.

And then I can still make flash games and games using the UDK and even try to delve into RPG maker, but I can only use those games to show people online and use in a portfolio as I can't make any money from them :(

For me, it is either Canada and Japan I must aim for, or spend the rest of my life dreaming and I don't ever want to go back to where I was a few years ago when I never thought I would have gone to university in Country Victoria that had a games degree.
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Brian Baglow Head of Interactive Entertainment, Revolver PR6 years ago
I'm with Neil. Here in Scotland, when I started back in days of yore, we had five large development studios. They've all gone. Yet now, we've got 60+ studios, all much much smaller (Rockstar North aside) and working on mobile/social/casual etc.

The future's independent. A bit of experience within a larger studio is definitely important, but you can now get your own ideas and IP out on the market and - hopefully - make some cash. That simply wasn't true 10+ years ago...
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After going through all the Nocturnal experiences, I have to agree: there are only 2 ways to go now - super small, on a string budget, with mobile/social gaming ... or super big, with $50-100m in funding.

And the reality is very few investors will consider spending $50-100m in Australia, when they can get more (for less risk) elsewhere in the world.

The $AU is only relevant, because its been 20 or so years since its been at parity (with the average rate at 75c over that time). Factor in that most investment is carried out in $US, and most payments are also in $US... very few studios could handle a 20-30% drop in investment dollars, matching the same drop in income.
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