MICHIGAN — Most of the fanfare — and finger pointing — about Michigan’s film incentives have been focused on their role in attracting movie and TV show productions to the state.
But a little-known provision in the legislation’s wording also allows the state to offer incentives to video game developers, who are often competing for business with much larger firms on the West Coast and other tech hotbeds.
“The gaming guys want you to do high quality work,” said Sean Hurwitz, CEO of Southfield-based Pixo Entertainment. “But if they don’t produce the game 30-percent cheaper than the other guys, you don’t get the business. The film incentive will let us do that. It also should spur a lot more digital production in the state.”
In August, Hurwitz’s company received a Michigan Film Incentive award of $51,300 to develop an interactive mobile boxing game, Blue Goji Boxing. Pixo will work on the project for the Texas-based developer of the popular interactive music game Guitar Hero. Hurwitz said the state incentive gave him the financial edge he needed to best other developers around the country.
Hurwitz said Michigan is a perfect home for his company because of the work ethic and the quality of life and the lower wages, which allow Pixo Entertainment to compete with California and Texas shops — “If we can find developers,” he said.
“We’re not San Francisco, or Los Angeles,” he said, “and a lot of the young folks coming out of the U-M, MSU, Lawrence Tech and Grand Valley want to go there.“
Marie Lazar is one of those graduates. Lazar, 24, just finished her master’s degree in game design at Michigan State University, which offers a specialization in game design and development. She currently lives in Grand Rapids, where she’s working as a contractor for a Belgian company.
“It’s hard to say whether I would stay in Michigan,” she said. “I’d like to work remotely for companies in Michigan, but I don’t think I could stay here forever. Companies here are not terribly innovative. They are not making the types of games I’m interested in developing.”
Pixo Entertainment CEO Hurwitz acknowledges Michigan always will have a hard time competing with California digital design studios because Grand Rapids and Detroit can’t offer the exiting lifestyles of San Francisco and Los Angeles. Keeping young talented game designers in the state will be difficult, he said. But once they experience the extreme prices found in California, Michigan again looks attractive.
“Developers and programmers can get a job in California anytime they want,” Hurwitz said. “We just had an artist move to San Francisco recently. But he’s now paying $15 for a hamburger and $9 for a beer, not to mention $2,000 for a loft apartment. We have had a few more senior guys leave the state, but after they raised a family they moved back.
“We’d like to compete at some level for this booming industry in Michigan. We’ll still have offices around world to work with clients, but somehow if we can make Michigan our permanent home and find programmers, we’ll be set.”
David Baker, program manager for Ferris State University’s digital animation and game design program in Grand Rapids, said despite the siren call from the West Coast, many of the program’s alumni have remained in Michigan and are thriving. He thinks expanding the film credits to digital game development was an essential piece in building the industry here.
“It acknowledges the fact that video game companies in Michigan can chase these kinds of dollars,” he said.
He also said a trend in video gaming — away from the traditional console games (triple A games) to downloadable games for computers and smart phones — favors the nascent Michigan video gaming industry. It will provide more work for his students and alumni.
“Triple A titles are expensive to produce and sell,” he said. “You can spend $5 million to $10 million to produce the big stuff. You can have 100 to 200 people working on them. But titles like Farmville offered over the Internet on platforms like Facebook have become very popular.
“Farmville also illustrates a trend in micro-purchasing. It costs a buck to download the game — multiply that by a million and you have a million bucks. Other Internet games are cheap to download, but the developers find ways to get money out of you by selling ads, or getting you to buy credits. People are still spending money on video games, just in a different way.”
Then there’s the digital trend in film that bodes well for Michigan digital developers, he said.
“Every motion picture is touched digitally,” he said. “We have as much talent as anybody. We just need the incentive to get some of this money in Michigan.”
But even more digital work could come Michigan’s way if the film incentives law was revised, Baker said.
“The way the law is written makes it hard for smaller shops,” he said. “There is too much paperwork. I would encourage the Legislature to keep that money for small producers. I would encourage the state to offer incentives to small companies to attract larger dollars.”
Mike Brennan is senior technology writer at MiBiz. His day job is editor and publisher of MITechNews.com