February 22, 2011
By Priyanka Dayal
State Rep. Vincent A. Pedone, D-Worcester, has filed a bill to help video game companies grow with the help of tax credits, directing more attention to a sector that continues to gain interest among local politicians.
Mr. Pedone said tax credits can help ensure that Massachusetts — including Worcester — can snag more of the market share in the video game industry, which is expected to grow rapidly.
Massachusetts does about $2 billion of business in video games, a small percentage of the $50 billion industry worldwide.
Worcester also boasts two colleges that were recognized for top-notch video game design programs.
Mr. Pedone and others have compared video games to biotech, arguing that with the right conditions, Massachusetts can become an industry hub.
“We’re well positioned to capture a market share, similar to how we captured a share of the biotech industry 25 years ago,” Mr. Pedone said in an interview.
But his bill is closely modeled on tax credits for a different industry — the film industry. The legislation adds digital media to the law governing film industry tax credits; it also provides incentives specific to the digital media industry. It includes production-based tax credits, as well as employee-based tax credits.
Perhaps one of the more creative clauses provides a credit for companies that market Massachusetts by stamping a state logo on their products.
There are also claw-back provisions for companies that choose to leave the state, which were drafted in response to the state’s flawed deal with Evergreen Solar, Mr. Pedone said.
While he said he’s confident most of his colleagues will support tax credits for the video game industry, there are skeptics in the Statehouse. One of them is fellow
Democrat James B. Eldridge, state senator from Acton.
Mr. Eldridge said he’s opposed to tax credits for specific industries, arguing that the state has already lost millions by giving breaks to film producers, and that the money spent on tax credits could be better spent in areas such as health care and local aid.
“We need to do a proper analysis before we throw more taxpayer money at bad ideas,” he said.
In theory, jobs in the video game industry would not be as temporary as the jobs created to support specific movies. But this does not sway Mr. Eldridge. “I just don’t know if we need to offer tax breaks for something that’s already going on,” he said.
Mr. Pedone said the state does profit from tax breaks for “emerging technologies.”
“If you are giving back 25 cents on the dollar for an industry to locate here, you’re still making 75 cents,” he said. “If we didn’t have the tax credit, we wouldn’t be making any money.”
Timothy Loew, director of academic planning and operations at Worcester’s Becker College, called Mr. Pedone’s bill a good start to helping the video game industry in Massachusetts.
“I like how it addresses the variety of different types of companies that are part of the industry; it’s not just designed for big companies,” Mr. Loew said. “I think it’s a great place to begin the conversation.”
Since Princeton Review ranked the video game design programs at Becker and at Worcester Polytechnic Institute among the top 10 in the country, elected officials at every level have been talking video games. Lt. Gov. Timothy P. Murray spoke at a video game industry conference hosted by Becker in December, where he announced the launch of the Massachusetts Video Game Institute. The institute, envisioned as a hub for industry policy and research, is to be housed at Becker.
In Washington, D.C., last week, U.S. Rep. James P. McGovern, D-Worcester, helped launch the Congressional Caucus for Competitiveness in Entertainment Technology, which will focus on the computer and video game industry.
At the state level, state Rep. John J. Binienda, D-Worcester, has filed a simpler version of Mr. Pedone’s bill. It would extend film industry tax credits to the video game industry. Other state lawmakers have expressed interest in reforming independent contractor laws, which some video game industry professionals consider a hindrance.
“There’s all sorts of things going on, and all of it is converging on this central idea, which is that this is a real economic development and job creation opportunity,” Mr. Loew said.