Pillsbury issues paper on programs for video game developers

PILLSBURY’S SOCIAL MEDIA, ENTERTAINMENT & TECHNOLOGY TEAM ISSUES TWO WHITE PAPERS ON INCENTIVE PROGRAMS FOR VIDEO GAME DEVELOPERS
From New Mexico to Nova Scotia, U.S. and Canada municipalities try to lure game & multimedia company jobs

New York (December 23, 2010): In an authoritative nod to video games’ popularity, profits and influence over traditional media, state and provincial governments across the U.S. and Canada are competing head-to-head with generous incentive programs aimed at landing tomorrow’s hot game start-ups or attracting existing game and entertainment software development jobs, according to analysis in new White Papers published by Pillsbury’s Social Media, Entertainment & Technology team.

The two White Papers, A State-by-State Guide to Business Incentives for Your Interactive Entertainment Production and A Guide to Business Incentives for Interactive Entertainment Production in Canada, highlight the growing momentum and influence of the gaming industry, summarizing the various incentives available from lawmakers from Alabama to Manitoba.

“For game developers targeting the Web, consoles or mobile platforms, ambitions have never been higher – and now deciding where to set up shop is harder, in a good way, thanks to more regions ramping-up incentives,” said IP attorney Sean Kane, lead author of the two White Papers, and a member of Pillsbury’s Social Media, Entertainment & Technology team which advises video game, virtual world, entertainment, media companies and other entities investing in virtual technologies on key regulatory and legal issues impacting the industry.. “While enticements vary, there are significant rewards available from tax credits and grants to venture funding-based programs, meaning existing or aspiring developers must weigh their objectives against these offers carefully to reap the greatest benefit.”

At least 21 U.S. states currently maintain incentive programs aimed at game and interactive media developers, or have passed legislation set to enact them in the next 1-2 years, according to the Pillsbury White Papers. Meanwhile, Canada already boasts two nationwide incentive programs courting both upstart developers and established game studios, and six of its provinces maintain their own individual programs. Applicants on both sides of the border generally must commit to basing their operations in a given region, make related expenditures locally and – in certain locations – not produce content defined as obscene, excessively violent, libelous or otherwise unlawful according to applicable criminal codes. In both countries, incentives are often compounded in exchange for investing in designated economic recovery areas.

While some governments have established dedicated offices to pitch game and interactive interests, others run their programs through existing agencies already touting their locations for film and television productions, something Kane feels is no coincidence.

“Games and interactive media are a natural extension for state agencies pursuing film and TV shoots, because there is obviously immense crossover potential. Almost every media property today has a game tie-in, and in a lot of genres it is the game component that ultimately inspires what hits TVs and theaters,” he adds. “This opens a major market opportunity for the states and provinces – regardless of whether your streets and skyline were a fit for television; you can go out and court companies creating the next action or online social game that may spawn movies, merchandise and spin-offs.”

Kane advises companies of all sizes to study their widening incentive options carefully in terms of upside and compliance requirements before establishing or expanding operations.

“It is important to consult advisors familiar with both the industry and the fine print of these programs, because the best options for most companies are going to vary widely, based on their capital needs, labor requirements or tax consequences,” he adds. “Compliance is important as well – governments are serious and sophisticated when it comes to pitching companies in this space, but understanding the terms and conditions behind these programs is crucial, particularly for new ventures that may be unaccustomed to working with the public sector.”

Pillsbury’s Social Media, Entertainment & Technology team includes more than 30 attorneys in offices around the world advising clients on the interplay between business, legal and technological issues associated with social media. Pillsbury’s clients are using applications and technologies in innovative ways, often creating new or leveraging existing business models using social media applications and virtual worlds. Visit www.pillsburylaw.com/social for more.

About Pillsbury
Pillsbury Winthrop Shaw Pittman LLP is a full-service law firm with market-leading strengths serving the energy, financial services, real estate and technology sectors, and increasingly healthcare and education. Based in the world’s major financial and technology centers, Pillsbury counsels clients on global corporate, regulatory and litigation matters. We work in multidisciplinary teams that allow us to anticipate trends and bring a 360-degree perspective to complex business and legal issues—helping clients to take greater advantage of new opportunities and better mitigate risk. This collaborative work style helps produce the results our clients seek.