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Boston Video Game Industry Facing Significant Challenges

BOSTON — Boston becomes center of the video gaming universe Friday as the second annual Penny Arcade Expo, or PAX East, kicks off at the Boston Convention and Exhibition Center. Sixty-thousand gamers are expected to pass through this weekend.

The Seattle-based PAX festival chose Boston for its first East Coast show last year, in part, because of the burgeoning game design industry in Massachusetts. But in the year since, that industry has faced some significant challenges.

WBUR’s Adam Ragusea joined Morning Edition Friday to explain.

Adam Ragusea: Before we get into that, I want to tell you about this cool game I saw last night. There’s a party and expo just for Massachusetts-based game designers that, for the last two years, has happened the night before PAX East. That’s where I saw a Boston company called Big Life Labs, which is building a game that’s kind of like Guitar Hero, where you play guitar with a virtual band and a virtual audience, except you play with a real guitar.

This is the brainchild of a Berklee College of Music grad Eliot Hunt and his business partner, local software developer Leo O’Donnell. It’s supposed to be an online social media game, where your performances will be broadcast live over the Internet, and the listeners vote on what they’re hearing.

Bob Oakes: Kind of like Guitar Hero meets YouTube.

Exactly. But the developers would probably bristle at that comparison right now, because Guitar Hero, and its successor Rock Band, have had a terrible year. Guitar Hero was discontinued, and Harmonix, the maker of Rock Band and probably the Boston area’s most prominent game design company, lost hundreds of millions of dollars. They were sold off and they had to lay off dozens of employees.

And that’s had a big impact on the local industry?

If not in numbers, then certainly in spirit. This industry exists because at least some of the hot young designers coming out of MIT and the other schools don’t go to California, where most of the work is — some of them stay here. And the Harmonix layoffs, I’m told, sent a wave of apprehension through that community. The other big thing that has hit the psyche of the local gaming industry in the last year was when Sox pitcher-turned-gaming entrepreneur Curt Schilling made good on his threat to move his company, 38 Studios, to Rhode Island.

Schilling did that because he was looking for a tax break and Massachusetts wouldn’t give him one.

Right. This gets to the other big challenge for the game industry here. This time last year, there was a push to extend the Massachusetts film tax credit to the gaming industry. Everybody I talked to at the first PAX East thought it was going to happen, and not only has it not happened, but the film tax credit itself came under attack from Gov. Deval Patrick, who tried to put a cap on it.

Times are pretty tough on Beacon Hill, with a big deficit to deal with. What’s the argument for subsidizing something as profitable as the video game industry right now?

Folks in the industry give two reasons: First, 21 other states are doing it, and they’re stealing the talent we’re developing here. Canada is in the game, too — Montreal has really grown as a center for game design. I’m told that “moving north” has entered the lexicon of our local industry.

The other argument is that this business has the potential to offer much more permanent jobs than the jobs you get when Ben Affleck parachutes into town to make another film. So state Rep. Vincent Pedone has introduced a gaming tax credit in this new legislative session. But tax giveaways for video games is probably a hard sell this year.

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