Game makers flocking to New Orleans NEW ORLEANS - A week before Hurricane Katrina battered Louisiana and turned New Orleans into a natural disaster area, the state government passed tax incentives to attract video game developers to the region. Now that the recovering state is looking to build into the future, it's aggressively courting technology and video game companies with the best tax incentives in the United States.
And it's working.
"We set the foundation in 2005 before Katrina to focus on game developers and technology companies, but last year we went back and made these tax incentives a permanent fixture," said Stephen Moret, Louisiana's Secretary of Economic Development. "We want game companies to open up studios here and establish roots here. Our incentives will remain for game companies moving forward with no phase outs and no plans to abandon this focus."
Known as the Louisiana Digital Media Incentive, the program provides a tax credit of 25% of qualified production expenditures for state-certified digital interactive productions in Louisiana, and a whopping 35% tax credit for payroll expenditures for Louisiana residents. That bests every other state in the U.S.
The incentive has already attracted two major game companies.
Madden-maker Electronic Arts was the first game publisher on board, transferring personnel from British Columbia, California and Florida to what is now its North American headquarters for game testing. The 400 employees at the temporary facility will grow to about 600 people as EA adds global games to the center. Games like FIFA 12, NHL 12, and Madden NFL 12 are currently being tested there to ensure the final products ship without glitches.
Next year, EA will move into a new 94,000 square foot Digital Media Facility on the campus of Louisiana State University.
"EA definitely had a huge impact with the growth of video games in Louisiana," said Jeff Pellegrin, executive director and founder of the Louisiana Digital Gaming Initiative (LGDI). "It's great to have a big name when you're at E3 or GDC because everyone knows them and it validates what we're trying to do in this state. EA has been really helpful working with us to help bring other game companies to the state."
EA likely had something to do with the second big game studio that's setting up shop in the area. French video game publisher Gameloft, one of the biggest mobile game makers in the world, is currently hiring for a new studio, eventually ramping up to about 150 employees over the next few years.
There have been some positives that have come from Katrina, as disasters often lead to rebuilding and revitalizing an area. The Big Easy is rebuilding itself as a technology and gaming bastion; universities like LSU, Tulane University, the University of New Orleans, and Xavier are beginning to offer students curriculum to learn how to make video games. The state is also working on its own initiative to train students about game design.
"We're setting up a very specific digital training school here over the next year that will provide a pipeline of students who can enter the technology and video game work force as programmers, digital artists, and other specialties," said Michael Hecht, President and CEO of Greater New Orleans, Inc.
After seeing their former hometown in the news coverage of Katrina, thousands of locals who had moved to other cities have been returning home in droves. This influx of fresh talent, including many entrepreneurs and tech experts, has helped fuel the growth of games and technology in the region. Louisiana now boasts more college-educated people under the age of 25 than any other state.
"It's like all these people that have not known that there were other people in town have all stuck their heads out of the ground at the same time and really come together, while a huge number of new people have moved back to town or into town for the first time to be part of this energy of rebuilding in New Orleans," said Andrew Larimer, who works with the Greater New Orleans (GNO) Inc. regional economic alliance. "We have about 60 tech companies in New Orleans right now and we're starting to diversify more within niches as people are finding their roots. Video games are a big part of this growth."
The tax incentives are attracting fresh talent from as far away as Mountain View, California.
Lavon Woods, founder and CEO of GameBuilder Studio, was in New Orleans for Launch Fest 2011, an expo connecting entrepreneurs like Woods with investors interested in funding New Orleans start-ups.
"New Orleans as a game development hub is really interesting because we're starting to see a lot of this grassroots movement coming up and gaming companies starting to move down here like EA and Gameloft," said Woods. "With the tax incentives for game developers and the excitement around this area, we hope to get funding and relocate to New Orleans."
While New Orleans still has a ways to go to match current game development hubs like Austin, Boston and San Francisco, the city is already further ahead than it ever was before Katrina hit. In the wake of that destruction, a new technology center has been born.