Assemblymember Looks to Protect California's Video Game Industry

Wednesday, February 14, 2018

Multi-Billion Dollar Industry Getting Lured by Other States

SACRAMENTO - Today, Assemblymember Richard Bloom (D-Santa Monica) announced that he will introduce legislation to provide incentives for video game companies to ensure California remains the hub of the industry.   

“California is synonymous with the video game industry just as we are with the film and television industry,” said Bloom.  “As with film and television production, other states are poaching our video game innovators and developers, most of whom are small businesses and startups.  We need to stay competitive and act fast so that we can keep this multi-billion dollar industry right here in our backyard.”

Global consumer revenue in the video game industry was approximately $116 billion in 2017.  In California, the software industry contributed approximately $32 billion to the state’s gross domestic product and $13.2 billion in California wages.  California is also home to more than 900 video game companies with a workforce of 33,000.  These numbers are more than the next four states combined.  In fact, Texas, the second leading state has approximately 275 companies and 4,300 employees.

However, California’s share of the industry shrunk from 38% to 21% from 2009 to 2012.  While that number increased to 27% between 2012 and 2015, California’s market share gap compared to the next four states combined decreased from 4% to 2% in that same time.  Also, 50 states now have a share of the market.

While California still remains the hub for the video game industry, it does not provide tax incentives, grants or rebates that are available in 21 other states and two Canadian provinces.  To remain a leader in the video game industry and the economic boon it provides California will need to explore policies that foster a more competitive business climate.

The announcement of the legislation comes on the heels of a report released this week entitled Future Proofing the Video Game Industry in California by the Milken Institute, a nonprofit, public policy research institution headquartered in Santa Monica.  The report provided four recommendations, at least two of which the legislation will incorporate: adapting state sales and use tax exemptions to apply to video games and revising the state’s research and development tax credit to better serve video game companies.

Richard Bloom represents California’s 50th Assembly District, which comprises the communities of Agoura Hills, Bel Air, Beverly Hills, Brentwood, Hollywood, Malibu, Pacific Palisades, Santa Monica, Topanga, West Hollywood, and West Los Angeles.