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GDAA's Tom Crago

The Australian trade organisation president explains how the country's business is surviving a tough economy

As we continue our look at the videogames business around the world, and particularly the impact the economy slowdown has had across the globe, here we take a look at Australia.

Tom Crago, the CEO of developer Tantalus and the president of the country's trade organisation, the GDAA, explains how the national industry has fared in the last twelve months, and looks ahead to the future. How has the Australian market fared in the past 12 months?
Tom Crago

We've been relatively resilient - certainly we've felt the effects of the downturn, and I'm sure most Australian companies are finding it more difficult to procure pay-for-service work than in the past. But we're weathering the storm - with the exception of Pandemic closing, there have been no casualties in the Australian market.

From the perspective of a lot of companies I know it's been an opportunity to fine-tune their sales processes as they've had to become more competitive, in order to win the types of jobs that they've become accustomed to.

So absolutely a tougher time, but ultimately we're hanging in there. What's the local market like at the moment, in terms of numbers?
Tom Crago

We've not surveyed the market this year, but we anticipate that it will be a year of growth in terms of employee numbers within the development community, and also in terms of revenue. But moderate growth - and certainly not at the levels we've become used to over the past few years. Are you expecting to track the US and Europe on that basis?
Tom Crago

We're probably travelling a little better, actually, although it must be remembered that we're a much, much smaller market. Sidhe's Mario Wynands talked about the challenge for the smaller markets in terms of the distance to where a lot of work comes from - it's perhaps a little easier for Australian companies, but has it been more difficult to do those deals?
Tom Crago

Absolutely - for Australian developers, all of our income is from overseas. I've been in the industry for ten years, and I've never once done a deal in Australian dollars. We deal exclusively with North American, European and Japanese companies.

When times get tough the inclination of those companies is to bring titles closer to home in order to do what they see as mitigating risk. That means that companies in Australia have to work that much harder again to convince those publishers that we can manage that risk ourselves on the other side of the world. It's a tougher battle than ever. Do you see that changing?
Tom Crago

If you're Activision and you're sitting in Santa Monica with a studio a mile down the road, there's going to be an in-built inclination to work with that company, versus one that's on the other side of the world. I don't think that will change.

Now we can put a strong case in Australia for placing games in the region - there are a lot of arguments that we mount, but you can't do much about geography. It will continue to be a struggle for us, and we'll continue to need to be even more competitive than companies who are based closer to publishers. How would you rank development costs in Australia, compared to the rest of the world?
Tom Crago

Unfortunately we're not subsidised at all. We try not to compete on price - we try to compete on another set of criteria, but yes, it is cheaper to make a game in Australia than it is for the most part in North America, Europe or Japan.

We have that in our favour, but it's not the differentiating factor in our comparative markets that we try to leverage exclusively. From the GDAA's perspective, when other governments are more aggressive in the tax breaks front, do you lobby the Australian government? Do you hope to see progress?
Tom Crago

The Australian film and television industries get a very good deal. We would like to see the programmes and initiatives... the incentives... that are offered to those industries applied to videogames. That's the battle we're waging at present with our federal government.

To date we've had limited success, but we remain optimistic that they'll see the light.

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