What is the oldest video game? It might not be what you expect.
Before Fortnite, Call of Duty and The Last of Us, other creative video games set the stage for the blockbusters we see today.
- Lawmakers, mostly Republicans, are proposing tax incentives to encourage video game production in Wisconsin.
- Wisconsin is already an emerging hub for video games, including Raven Software in Middleton and a large conference in Madison.
- Similar tax credits have been pitched for filmmakers, aimed at competing with states like Georgia.
- Supporters want to keep talent, including graduates from UW-Stout’s game design program, in Wisconsin.
Picture the video game industry, and you probably envision a tech hub like Silicon Valley.
But that landscape is changing. Game developers are looking to move their operations out of states like California and Texas, where the cost of living is high and environmental threats like wildfires loom.
Advocates and lawmakers hope to attract those companies to Wisconsin with tax incentives. The state wouldn’t be starting from scratch — it already plays a surprisingly large role in the video game sector, which boomed while people were stuck at home during the pandemic.
“A lot of people don’t necessarily even realize just how well-connected we are already,” said Andrew Williams, a professor in the University of Wisconsin-Stout’s School of Art and Design, which offers one of the top video game design programs in the country.
The proposal in the state Legislature would “take that and really supercharge it,” he said.
Take Raven Software in Middleton, which works on Call of Duty games. In the early 1990s, Raven became the “central pillar” in the state, Williams said, hiring developers who went on to create other companies.
Miles away, Madison’s Alliant Energy Center hosts MDEV, the largest conference for video game developers in the Midwest. It’s growing from one day to two this year, in part to accommodate growing international visitors.
The Wisconsin Games Alliance, a group of studios, developers, faculty and investors that promotes game development in Wisconsin, already has had organic growth and began discussing how to make Wisconsin a center of the industry. Seeking support from lawmakers was part of that.
“Very rarely does a state or even region have that kind of unique opportunity, and it’s all happening in the moment,” said Ben Kvalo, the alliance’s president.
Bill needs to pass obstacle before going to Evers
Lawmakers are considering legislation that would create a tax credit for video game producers that’s equal to 30% of their wages paid to Wisconsin employees. The original draft also suggested covering 30% of certain business expenses, but an amendment removed that part.
Social media, gambling products or products with “obscene content” wouldn’t be eligible for the credits. Under Wisconsin law, obscene material includes sexual content but not violence.
Lawmakers want to support “wholesome, fun-natured” gaming instead of graphic, violent content, said state Rep. Clint Moses, a Republican author of the bill. “That’s a bipartisan concern, something that Democrats and Republicans share values on.”
The bill moved quickly after it was introduced in late April, but momentum has slowed. Legislative leaders have yet to schedule it for the floor votes needed to send it to Democratic Gov. Tony Evers’ desk. An Evers spokeswoman said he hasn’t closely reviewed the proposal.
The same proposal didn’t make it to Evers last year and has faced some opposition from Democrats. Nine Republicans have signed up in support of it, but only one Democrat, Rep. Russell Goodwin from Milwaukee.
Sen. Mark Spreitzer, a Democrat from Beloit, was one of three Democrats on a Senate committee who voted against advancing the bill. In a statement, Spreitzer said he supports the intent of the proposal and the amendment, which brought down the price tag. But tax credits must be dictated by what happens in the budget, he said.
“We need to understand how this credit would fit into the state budget as a whole,” he said. “We need to start by supporting critical funding for children, families and seniors in the state budget before we decide to give credits like this one out to particular industries.”
Kvalo, the founder and CEO of publisher Midwest Games — a niche similar to book publishing — sees the proposal as a way for companies to make their budget and resources go further. Having more dollars to use means more investments in local games, studios and hiring, he said.
“It allows me to do so much more because I can run more efficiently than the rest of the industry in the U.S.,” Kvalo said.
Lawmakers pitching similar credits to draw film industry
The idea to spur game development — or any other industry — through tax credits isn’t new.
Quebec offers a video game credit up to 38%, though the Canadian province is looking to scale back to cut costs. A 2022 audit of Georgia’s 30% credit, part of the state’s broader filmmaking incentives, found developers claimed $26 million while their products generated nearly $390 million in economic impact.
Moses said he can’t speak for future lawmakers but could see them considering changes to Wisconsin’s credit as the industry evolves.
A separate bill under consideration would create similar tax credits for film production in Wisconsin. That bill is also awaiting floor votes.
Evers signaled his support of filmmaking tax credits in his state budget proposal, though his plan didn’t include incentives for video game production. Filmmaking incentives were also pitched last year but didn’t make it to Evers.
Consumer spending on video games outpaces film, TV and music combined, according to the Entertainment Software Association, a trade group that’s lobbying for the Wisconsin proposal.
“What commonly happens in film is you’ll have people who will come in and they’ll shoot on location, and then they’ll kind of get up and leave,” Williams said. “With game development, you have a longer commitment to your product.”
Advocates want to keep UW-Stout graduates in Wisconsin
In the program Williams teaches at UW-Stout, students use an industry-standard motion capture studio, where a special suit creates the basis for animation with human movement. Another photogrammetry setup uses around 100 cameras to take images of an object, building a realistic 3D model.
Known as Wisconsin’s polytechnic university and located near the Minnesota border, Stout offers two bachelor’s degrees focused on the artistic and computer science elements of game design. Average salaries in the field are around $75,000.
Faculty use their connections in the game development scene and encourage students to network at the MDEV conference, where they may learn a large franchise has a partner studio in Wisconsin. Supporters of the bill say it may also open up more remote positions in small towns.
“There are some really, really brilliant recent graduates out there. We would love to be able to keep them and stop exporting our best people out,” Williams said.
Another reason Wisconsin should want more game development, Kvalo said, is that it’s essentially an exercise in problem solving and critical thinking.
“Getting engineers and artists to communicate and make something together, that creates a strong workforce,” he said. “They then can go into other industries — manufacturing, health care — and they come up with new solutions for how these things could be done.”
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