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Film Groups Want Separate Funding for Video Games

Texas film heavyweights are asking lawmakers to create a separate funding strategy for video game incentives instead of continuing shared funding with film and television incentives. The video game lobby isn't ready for a split.

Naveen Nattam (l) Sean Riley (r) play games during their lunch break at Twisted Pixel, a video game company in Austin. Texas is second in the nation for video game industry employment and promoting further growth with incentives and training.

Texas film advocates are trying to put some distance between their industry and the video game industry in the eyes, and budget, of the Legislature. 

Film business heavyweights are asking state lawmakers this week to create a separate funding strategy for video game incentives instead of continuing shared funding with film and television incentives. But the video game lobby isn’t ready for a separation.

Since 2008, both groups have pulled money from a single pot, the Texas Moving Image Industry Incentive Program — known as the film incentives program — which provides grants for companies that hire Texas workers to develop film, television, commercial or video game projects in the state. The program received about $95 million in the last budget and has doled out more than $52 million in grants since 2013.

Film advocates want the Legislature to create a new section in the budget for video games incentives. Lawrence Collins, a lobbyist for the film industry, said film advocates carry most of the weight when it comes to asking lawmakers for money.

“Film is accustomed to and comfortable with fighting in the appropriation trenches. I think that's a new concept for video games, and I understand why that bothers them,” he said.

Prominent groups pushing for the split include the Texas Association of Business and the Texas Hotel and Lodging Association. The latter helped persuade lawmakers in 2013 to nearly triple the funding for film incentives from the previous budget cycle by appropriating almost $70 million from the hotel occupancy tax for the incentives.

In a statement to lawmakers Sunday evening, TAB President Bill Hammond said separating the incentives would allow each industry to “focus on their respective business models.”

Video game companies have “altogether different production schedules, business models, incentive needs, public messaging and advocacy strategies,” Hammond's statement said. Video games are developed mostly in brick-and-mortar studios and often take several years to complete, unlike many fast-paced film projects that move between locations across the state.

Video game proponents say they’re open to the idea of separate funding, but not right now.

“We just think it’s very late in the session,” said Tom Foulkes, vice president of state government affairs at the Entertainment Software Association, a D.C.-based organization that represents several gaming companies with studios in Texas including Electronic Arts and Nintendo.

“There’s just about a month before the Legislature will consider the budget,” Foulkes said. “We just think the program is working very well.”

In the last two years, video game developers received more than $16 million in grants and spent nearly $96 million on projects in Texas, according to the Texas Film Commission. Television, commercial and film companies were granted about $36 million and spent $200 million in the state.

The grant money goes to companies that spend at least 60 percent of production days in Texas and hire at least 70 percent Texas residents for projects. Incentives range from 5 to 20 percent, depending on how much money the project spends in Texas.

The $95 million the film incentives received in 2013 was an all-time high, but the possible break-up of film and video games comes as some state lawmakers are targeting incentives for budget cuts. The budget proposed by Senate Finance Chairwoman Jane Nelson, R-Flower Mound, would cut film incentives funding by 89 percent, down to $10 million.

A representative for Gov. Greg Abbott told the Senate Finance Committee last month that the film incentives program needs at least $70 million to remain effective in attracting projects to the state.

There are more than 210 film and television production companies in Texas, according to the Texas Film Commission. Notable Texas-made films include Friday Night Lights, True Grit and recent Best Picture Oscar nominee Boyhood.

Texas is also home to more than 180 video game companies and is second in the nation in game development jobs, according to the film commission.

Disclosure: The Texas Association of Business is a corporate sponsor of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.

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