Texas Incentives Lure Video Game Companies

By Edgar Walters

In the lobby of the Twisted Pixel Games studio in Austin, a futuristic motorcycle welcomes visitors with an electric blue glow. The robotic motorcycle stars in LocoCycle, a new video game produced almost entirely in Texas.
 
If Twisted Pixel plays its cards right, Texas could reimburse the company for up to 15 percent of in-state expenses on the project.
 
The state — ranked second in the nation in video game employment, with roughly 5,000 residents working in the industry — is not content to hold steady. With the industry already spending millions in the state, lawmakers see video game companies as an important component of economic growth. Last month, the Texas Film Commission expanded its incentive program to attract video game makers.
 
The state’s incentive program, which industry officials say is among the largest in the nation, offers cash grants to film, television and video game productions for wages paid to Texas residents, along with other spending in the state. Legislators allocated $95 million to the program for 2014-15, up from $32 million in 2012-13.
 
Video game companies that spend at least $3.5 million in Texas can now apply for a 20 percent base reimbursement from the commission, plus a sales tax exemption on production equipment. Previously, the maximum base reimbursement rate was 15 percent, and companies had to spend at least $5 million to qualify. Although the state would not disclose specific figures on how much the video game industry brings in, companies that received incentives from the film commission in 2012 spent $52.5 million in the state....

Another, the Southern Methodist University Guildhall graduate program, has existed since 2003. Gary Brubaker, its director, said the program began after game developers told the school that they “have a harder time finding good quality talent than getting capital or investors.” He said Texas’ incentives for video game companies were often better than those for oil and gas companies....