RALEIGH — Later this week the Raleigh Convention Center will host the second annual Triangle Game Conference, North Carolina's largest trade show focusing on the state's video games industry.
The conference will draw over 800 attendees and exhibitors from across North America and Europe. The strength of this show speaks to the industry's significance to the state's 21st century economy and how North Carolina is emerging as the industry's East Coast hub.
Unfortunately, other states and countries are now waking up to the economic development potential of an industry whose global sales hit $19 billion last year, outstripping all music sales and rivaling Hollywood's worldwide box office. We must act quickly and deliberately to fight off these threats and grow the industry across our state.
With little fanfare or directed effort, our state is now home to over 40 games companies employing over 1,000 highly trained, creative knowledge workers in an industry where the average salary exceeds $79,000. The industry includes companies making games for entertainment as well as those in the "serious game" segment, which harnesses advanced technologies in ways that are poised to revolutionize the way we learn in everything from K-12 education to military training.
Our companies are some of the most important to the industry worldwide. For example, Epic Games, located in North Carolina since 1999, is arguably the world leader in providing high-end graphics engines, enabling hundreds of companies around the world to build some of the most successful 3D games.
A new report from the Institute for Emerging Issues, "New Thinking, New Jobs," underlines the importance of building a creativity-based economy. Jobs requiring high amounts of creativity - such as those in the games industry - pay well, are resistant to outsourcing, are found in rural and urban areas, and are resilient in the face of economic decline. Indeed, the games industry has continued to grow in North Carolina and across the country despite the bursting of the dot com bubble and the current recession.
We need more of these types of jobs. The opportunity now exists for our state's industry to step firmly into a worldwide leadership position, bringing further benefits to our economy. To do that, we must confront our challenges.
We aren't remaining competitive with other locations around the globe that have taken on the goal of building their games industry as a means to economic growth. Our unique advantages - an experienced labor pool, excellent quality of life and outstanding universities - are being eroded by the competition.
Employers can find skilled labor elsewhere and at lower cost due to financial incentives provided by other states, provinces and nations. For an industry of creative workers that isn't constrained by geography, these incentives are creating a bidding war for talent, jobs and economic growth, one that companies looking at the bottom line can't ignore.
As one example, Norwegian game developer Funcom recently sought a location to create a studio with plans to hire 150 employees. Because its North American headquarters was in Durham, you might think we would have had a leg up on the competition. Funcom chose tax-friendly Montréal, where it received a 37.5 percent return on labor costs via tax credit.
In this country, Florida, Georgia, Louisiana and Texas are among many states that offer competitive tax credits to games companies. These states and provinces are actively working to entice companies away from North Carolina, where no such incentives exist.
North Carolinians have long shown their understanding of the role that high-tech can play in our economy. Our local games industry has proven its ability to make sustained contributions to our economy. It's time that the public, the state and the industry join in a discussion about the value that the industry brings and the means by which we can move it to the next level.
As a state, we can continue to do nothing and watch as companies locate to more financially supportive locales. Or we can begin a discussion about how to leverage our state's strengths - and its financial resources - to grow the industry in a way that benefits all of North Carolina.
Continuing to do nothing will simply push North Carolina to the bottom of the list. We'll lose what has been diligently developed by industry leaders with a passion for and belief in North Carolina. And we will miss out on the opportunity to become leaders of one of the most significant and prosperous high-tech industries for the 21st century.
Michael Young is associate professor in the Department of Computer Science at N.C. State University and a 2010 GlaxoSmithKline Faculty Fellow at the university's Institute for Emerging Issues.