According to a state-ordered audit, in 2021 Georgia received almost  $200 million in value from its interactive entertainment tax credit program. The 32-page report from Georgia Southern University’s Center for Business Analytics and Economic Research revealed that in 2021 the $12.5 million program generated almost $90 million in economic output, almost $35 million in labor income, and more than $70 million in value added.

“In addition to the direct benefits to the state, the Entertainment Investment Act has proved to be the lynchpin of a robust and dynamic game industry. When the program started, there were only five game studios in the entire state, employing less than 50 people. Now there are more than 160 companies, providing employment for thousands of Georgians,” said Andrew Greenberg, executive director of the Georgia Game Developers Association (GGDA).

The audit also cited non-monetary benefits such as contributing to the development of new forms of entertainment, strengthening the development of the entertainment production industry, and strengthening the human capital needed for the software development industry.

The GGDA’s economic contribution report showed that in 2020, gross revenue for Georgia’s entire video game industry was $577 million, with $770 million in economic impact. Leading companies include Hi-Rez Studios (with almost 500 Georgia employees),Tripwire Interactive, Pulseworks, Cartoon Network Game Studio, Adult Swim Games, Blue Mammoth Games, and Holistic Design, Inc.

“The interactive entertainment program provides a shot in the arm for companies innovating and creating new games. A game is only eligible while it is in production. Once it is released, it succeeds or fails on its own. Thanks to the state’s support, most of these succeed dramatically. The state program is one of the main reasons the state has become a leader in esports, VR, game development and more,” Greenberg said.

Key takeaways from the report include:

• In 2021 the program generated $89.842 million in economic output while supporting 387 jobs. 

• From 2017 to 2021, productions using this credit program created $398.547 million in output and $312.2 million in value added.

• Between 2017 and 2021, Georgia received $230.387 million in direct impact, $22.643 million in indirect impact, and $59.173 million in induced impact from the program.

• While game studios generated $62.5 million in credits between 2017 and 2021, these credits only cost Georgia $25.996 million.

• Between 2017 and 2021, Georgia made $12.954 million in new tax revenue that would not have been generated but for the $25.990 million in tax credits

• Between 2017 and 2021, the program was directly responsible for 873 jobs, as well as 213 indirect jobs, and 630 induced jobs, for a total of 1,716 supported jobs.

• Between 2017 and 2021, video game productions using these credits reported $260.873 million in base investment.

• Supporting the development of a strong video game industry consequently supports the growth of human capital within the software development industry. 

• Hardware and software created by many game developers have found practical applications outside of their intended recreational space

• Video game production can be considered a gateway into (the software) industry as gaming attracts interest at an early age

• (Getting students to learn software development) is easier to facilitate when there is a strong video game development industry in Georgia.

• The total cost to State revenue from this tax credit is capped annually at $12.5 million.

The full audit report can be found at https://www.audits2.ga.gov/reports/summaries/tax-incentive-evaluation-interactive-entertainment-tax-credit/ It was requested by the Senate Finance Committee and performed in accordance with O.C.G.A. § 28-5-41.1. The Center for Business Analytics and Economic Research (CBAER) of the Business Innovation Group (BIG) in the Office of Research at Georgia Southern University was engaged to conduct a study by the Georgia Department of Audits and Accounts.

The Georgia Game Developers Association is the nonprofit trade association for Georgia-based businesses and professionals in the video game manufacturing industry. It supports its members with business opportunities, educational services, professional development and public affairs coordination.