GameSpot story: ‘The State of the Aussie Game Development Industry in 2012’, September 2011

A feature story for GameSpot. Excerpt below.

The State of the Aussie Game Development Industry in 2012

In the wake of THQ’s studio closures in Brisbane and Melbourne, GameSpot AU investigates the path forward for the Australian game development industry.

The State of the Industry

Fortitude Valley, Queensland. Four years ago, this suburb functioned as the central nervous system of the tight-knit Australian game development industry. Employees of the five big studios–THQ, Krome, Pandemic, Auran, and The Creative Assembly–all worked within walking distance of one another. It was an extraordinary period of growth, wherein contracts to build licensed games for overseas publishers were relatively easy for development houses to secure, and to profit from. Studio executives, developers, and the Queensland government’s “Smart State” flag wavers toasted each other’s success.

One by one, these companies were faced with insurmountable difficulties: new IP failing to attract adequate market attention; cost reductions by overseas headquarters; and licensed game contracts drying up, due to a rising Australian dollar. In early August 2011, another death knell sounded across the community: THQ’s sudden “right-sizing” saw the shuttering of its Brisbane and Melbourne studios, resulting in the loss of around 200 jobs. Less than a year ago, Krome Studios–once the country’s largest independent game development company, home to more than 400 employees across three cities–ground to a halt.

Around 40 of Krome’s best talent were kept on and quietly folded under the banner of KMM Brisbane, a local arm of Kennedy Miller Mitchell’s Sydney-based animation and development studio. Yet, recent online rumours suggest that once KMM Brisbane’s current project, Happy Feet 2, is completed, the studio’s lights will be switched off. (GameSpot AU contacted a KMM Brisbane producer for comment, but they would not respond; an anonymous source said that four artists were laid off in the first week of August, that “most” would be laid off at the end of the month, and that “a core few” would stay until October, when the game ships.) Once again, some of this country’s most experienced and talented developers will return to an ever-contracting job market.

On the first floor of an unremarkable office building, on Warner Street in Fortitude Valley, sits Sega Studios Australia, an 80-strong outfit that was known as The Creative Assembly until June 2011. They’re deep into the development of London 2012, an Olympic Games tie-in for the Xbox 360, PlayStation 3, and PC. The walls are adorned with interesting artwork and materials that can’t be described, due to the nondisclosure agreement signed upon entry.

“We’re now the biggest developer in Brisbane, and probably Australia,” says Gareth Gower, director of studio marketing. “We’ve got a bit of a responsibility to nurture as much talent as possible, and help the industry that way.” They’ve got only two vacancies at the moment, both high-level positions: studio art director and senior engine programmer.

“It’s brutal. Absolutely brutal,” says studio director Marcus Fielding of the job market. He held the same role at Krome at the time of its closure in late 2010. “I’m seeing people at the local gym who can’t believe it’s happened again. They’re asking the question of me, ‘Is Sega secure?’ All I can do is work really hard to ensure that we are secure.”

Of the studio’s 80 employees, 60 are full time; the other 20 are contractors, mostly animators. Fielding introduced GameSpot AU to several staff from a range of disciplines. Senior environment artist Chris Conte began his career with online gambling developer Eyecon in 2004 and then spent nearly five years with Krome and, later, KMM Brisbane. Senior animator Adam Dowley started with Ratbag Games, an Adelaide-based outfit that was acquired by Midway Games in 2005. After being closed by Midway, Krome rehired many of Ratbag’s staff and established Krome Studios Adelaide before eventually closing the doors in August 2010.

“It throws your entire life into disarray,” recalls Dowley of the closure. “When Krome went down, I’d just bought a house in Adelaide.”

“I’d just bought a house here in Brisbane, too,” says Conte. “It’s scary. It puts you in a mind-set where you don’t know what’s going to happen. I think we’re pretty good here at Sega, but there’s always that thought at the back of my mind now: ‘What happens at the end of this game?’ It’ll be there probably for the rest of my career, now; once we get to wrap-up time, what’s going to happen? Are we going to be able to do another project?”

“It’s a fear that’s in the back of every developer’s mind,” says technical director Mark Rowley. “As an industry, it’s far more fragile than most.”

“The problem is that people are very specialised in this industry,” adds Dowley. “They don’t have skill sets that are applicable to other industries. Game designers; where can they go? I can animate; how do I use that outside of games or film?”

“You’ve specialised yourself for the love of the job,” replies Rowley.

“You love it so much that you’ve kind of doomed yourself!” concludes the senior animator. He and his colleagues laugh knowingly.

For the full story, visit GameSpot.

Further reading: A Matter Of Size: The State of Triple-A Game Development in Australia

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