Competitive market analysis

Part
01
of six
Part
01

Texas - Incentives Offered to Companies

In this study, we found that the incentives that Texas has in place to attract an interactive entertainment company that might want to relocate or expand in the country include Texas Moving Image Industry Incentive Program, Texas Enterprise Fund (TEF), and Creative Content Incentive Program. Below is a detailed explanation of our findings.

TEXAS MOVING INDUSTRY INCENTIVE PROGRAM (VIDEO GAME PROJECTS)

On the official website of the government of Texas, there are video game projects in the Texas Moving Image Industry Incentive Program. This means that the accepted video game projects can receive an incentive payment up to 22.5%, eligible of Texas spending. Companies that aim to make a new project in Texas can apply for the program. To be qualified for the incentive program, there should be a minimum eligible Texas spending amounting to $100,000. The production days of at least 60% need to be done in Texas, while the remaining 40% can be done outside of Texas. At least 70% of all the number of paid employees and contract laborers should be residents of Texas. Aside from the minimum requirements and content review previously mentioned, the Texas Film Commission will investigate the qualifying application according to the probable degree of the economic impact of the video game project in Texas. Verification process should be accomplished within 60 days and final verifying documentation should be submitted to the Texas Film Commission in either hard copy or soft copy.

TEXAS ENTERPRISE FUND (TEF)

TEF awards are granted to companies that aim to start new projects where one site Texas site competes with other out-of-state sites. It is a financial incentive for companies that start projects that contribute significant capital investment and provide new employment opportunities to Texas’ economy. For companies that aim to make new projects or expand businesses with relevant job creation and capital investment in one site in Texas where Texas is competing with at least one viable out-of-state site, some requirements have to be fulfilled.
First, the projects should provide new job creation of more than 75 full-time jobs in urban areas or 25 full-time jobs in rural areas. The site used for the project must be actively competing with at least one out-of-state site, and the company must not have made a decision regarding location. The total average wage for new jobs must at least meet the average wage in Texas, and the company should be financially capable and have some capital investment on the state. The evidence that TEFs are aimed towards the video game industry was when Texas Governor Greg Abbott only reserved $22 million for film and video game incentives below the governor’s original request of $72 million over the coming two-year budget cycle.

CREATIVE CONTENT INCENTIVE PROGRAM

The Creative Content Incentive Program was updated on March 14, 2019. A city in Texas, Austin, provides incentives to interactive entertainment companies including video game because projects involving visual effects are equal to 0.50% of paid wages to local workers. These projects can be developed by Austin companies or other companies. Though not necessarily Austin-based, these companies significantly promote Austin and would be eligible for additional 0.25% incentive for a total incentive of 0.75%. To qualify for a project, the company must put a thank you note for Austin government for the support. It also has to be an approved applicant for Texas film commission under film/video game project. Lastly, the company must pay union wages to all workers and make sure that all workers are provided with benefits with at least $11 every hour.
Part
02
of six
Part
02

New Mexico - Incentives Offered to Companies

New Mexico is a hub of a vibrant and diverse technology community, full of talent pools of both experienced and competitive workforce. Its ecosystem is made up of a diverse range of companies including small, innovative start-large enterprises as well as cutting-edge R&D and scientific institutions.

With its mantra "Land of Enchantment," New Mexico targets to be a destination for business relocation or expansion. To attain this goal, New Mexico has many incentive programs to attract different companies to invest in the state, including digital media, film and TV production, interactive entertainment and video game production. These incentives promise to secure talented workforce at a reduced cost by 25%-35% and a compensation cost rebate up to 25% for operating costs.
As per The New Mexico Partnership, which the state organization with the task to provide a single point of contact for locating and expanding businesses anywhere throughout New Mexico, Film and Media Tax Credit applies to most forms of digital media, including video game production.

FINDINGS
We have searched for the current incentives for video game companies in New Mexico in the state 's official publications by The New Mexico Partnershipand and we have found the following incentives in this state:

1. Top Talent Pool and Business Environment: New Mexico offers an experienced local talent pool and business environment including science and engineering talents, IT professionals, cutting-edge R&D institutions, technologists, scientists, and engineers, well-trained artists from a variety of cultural backgrounds and diverse community of creative talent.
2. High Compensation Cost Savings: New Mexico has compensation costs below the national average, enabling companies to hire top-tier talent while keeping costs manageable, providing cost savings of 30% or more compared to other high-cost states.
3. Reduced Operating costs: New Mexico reduces costs for digital media production and video game development companies by almost 50% through the New Mexico's powerful incentive program called the "Film and Media Tax Credit Program," which also applies to video game production. This program refunds 25% of production costs and compensations spent within the state of New Mexico back to companies. New Mexico reduces labor and operating costs by 25%.
4. Hiring Cash Reimbursement: New Mexico offers through its Job Training Incentive Program (JTIP) refunds up to 50% of half a year’s salary of each New Mexican hired. This means your company can take advantage of New Mexico’s world-class talent pool at a discount.
5. Refundable Wages: New Mexico 's High Wage Job Tax Credit (HWJTC) program provides refundable tax credits for higher paying jobs. For every person hired that is paid over $60k in a metro area or $40k in a rural area, a company receives tax credits equal to 10% of salary for four years, and all credits that remain after offsetting taxes refunded as cash.
6. Cash Grants: New Mexico offers through its Local Economic Development Act (LEDA) cash grants to offset eligible costs for land, building, and infrastructure expenses.
7. Reduced Property Taxes: New Mexico’s property taxes can be further lowered through the use of an Industrial Revenue Bond (IRB). New Mexico also provides other tax credits and incentives to offset gross receipts and compensating taxes such as those on manufacturing equipment as well as other industry-specific credits.
8. Reduced Income Tax: Rural Jobs Tax Credit can be applied to taxes due on state gross receipts, corporate income, or personal income tax. New Mexico can reduce Corporate Income Tax by 22%.

9. Financing Availability: New Mexico 's New Markets Tax Credit (NMTC) has $67 million to fund real estate, working capital, equipment, and inventory.
10. Credit Availability: New Mexico 's Technology Jobs and R&D Tax Credit supports businesses, with less than 50 employees and that has qualified expenditures under $5 million with, a tax credit of 5% for qualified R&D expenditures.
11. Removed gross receipts on manufacturing consumables such as electricity and industrial gases, repair parts and spares.
12. Low Energy Costs: New Mexico has comparatively low energy costs compared to the rest of the U.S. as well as extensive renewable energy potential.

VEDIO GAME CASE STUDY: GANYMEDE GAMES

  • Since 2002 New Mexico has offers a rebate through the Refundable Film Production Tax Credit to companies who produce movies in New Mexico. This incentive also applies to the production of all forms of digital media including video game companies which are eligible for the same incentive similar to film companies. A 25% rebate of most expenses incurred in New Mexico, including compensation costs. This best-in-class incentive has helped New Mexico become a major hub for the film industry, and now it’s attracting video game companies.

  • For example, Ganymede Games, like digital media companies located in New Mexico, benefits from the Refundable Film Production Tax Credit and the other incentives offered by the state that can help dramatically reduce costs. These incentives create savings in addition to the lower cost business environment. Ganymede attained the lower operating costs in New Mexico by having rebates and compensations that made their costs 25%-35% lower than in major coastal Metropolitan areas.

FILM AND TV PRODUCTION COMPANIES:

  • New Mexico attracts film and TV production from Hollywood with its classic western landscapes, state-of-the-art sound stages, strong professional local crew base, and local actors.

In conclusion, New Mexico is one of the most competitive states in attracting the interactive entertainment and video game production companies, thanks to the generous and robust incentives available to businesses that are planning to relocate or expand.

Part
03
of six
Part
03

Louisiana - Incentives Offered to Companies

To attract interactive entertainment companies, Louisiana offers Incentives such as the Digital Interactive Media and Software Program, LED Faststart, Educational and Trade Organization Partnerships, and Entertainment Job Creation Program. These programs have been put in place to help interactive entertainment companies relocate or expand in Louisiana. While the Digital Interactive Media and Software Program offers companies with a 25% tax credit for in-state labor, LED Faststart offers various services such as training development, employee screening, and recruitment.

Incentives Offered by the State of Louisiana

#1: Digital Interactive Media and Software Program

The Digital Interactive Media and Software Program, also known as Digital Interactive Media and Software Tax Credit, is considered to be the country’s strongest program in place that helps creative software development and digital media companies of various sizes acquire a competitive edge. Any company that produces digital interactive media platforms or products in Louisiana are eligible for the program. The program offers a 25% tax credit to those companies on qualified payroll for in-state work and 18% tax credit for qualified production spending. Through this program, the tax credit will be applied to the state income tax liability. The state will then refund the overages, or the companies can choose a rebate, which is 85% of the earned value, any day of the year.

#2: Led Faststart

The LED Faststart is the state’s workforce program and has made significant progress over the years in helping Louisiana’s digital gaming industry thrive. This initiative has been recognized for its effectiveness, innovation, efficiency, and flexibility. The Economist called the program as the “most notable statewide workforce-development initiative.” The LED Faststart initiative was designed to provide training development, customized employee recruitment, training delivery, and screening for new or expanding digital gaming companies. The services that Louisiana’s Faststart initiative provides are 2D/3D graphics development, curriculum design, instructional design, leadership instruction, organization development, photography, project management, recruitment and selection tactics, social media campaign implementation, technical instruction, web design, and videography.
According to the short-term and long-term workforce needs of the digital company, the LED Faststart team curates customized programs that ensure the company’s employees are well-trained and prepared from the very first day they begin work. The LED Faststart team consists of professionals from various fields of business such as manufacturing, digital media, corporate headquarters, research and development (R&D), and customer support. This initiative has delivered unique and comprehensive solutions for numerous high-tech companies and Fortune 500 companies.

#3: Educational Partnerships

Companies that are developing interactive media projects in the state are found to benefit greatly from educational institutions. There are over 13 universities across Louisiana with whom companies can form partnerships, both in the interest of their employees and as a source of highly-qualified digital media workforce. Each university offers various degrees and provides support for the production of interactive projects.

The following are the universities located in Louisiana along with the programs they offer -
  • Louisiana State University (LSU), Baton Rouge = Offers degrees in Computer Science (BS), Systems Science (MS), and Doctoral Program (Ph.D.).
  • Louisiana Tech University, Ruston = Offers degrees in Computer Science (BS), Masters in Computer Science (MS), and Doctoral Program in Computational Analysis Modeling (Ph.D.).
  • McNeese State University (MSU), Lake Charles = Offers degrees in Computer Science (BS), Computer Information Technology (AS), Mathematical Sciences with a focus in Computer Science (MS).
  • University of New Orleans (UNO), New Orleans = Offers degrees in Computer Science (BS), Masters in Computer Science (MS), and Doctoral Program in Engineering and Applied Sciences (Ph.D.).

#4: Trade Organization Partnerships

Forming partnerships with trade organizations enable interactive digital media companies to obtain various resources and production essentials for their growth. The organizations that provide production support to companies that develop interactive projects are the International Game Developers Association in New Orleans (IGDA-NOLA), Louisiana Digital Gaming Initiative (LDGI), Louisiana Internet Software and Technology Association (LISTA), and NeT2No (NetSquared).
  • Louisiana Digital Gaming Initiative is a non-profit association of professionals and businesses of electronic and video game developing industry.
  • The Louisiana Internet Software and Technology Association works toward helping large companies and technology development firms expand and relocate to Louisiana.
  • NetSquared develops and provides opportunities for individuals, companies, and foundations “involved in creating change to connect.” Anyone who is a designer, an entrepreneur, a developer, or a changemaker is eligible to qualify for the opportunities provided by this organization.

#5: Entertainment Job Creation Program

Louisiana’s Entertainment Job Creation Program offers a tax credit on the annual W2 wages to qualified interactive entertainment companies (Qualified Entertainment Company) that provide well-paying jobs for the residents of Louisiana. The initiative offers a 15% tax credit for every new job when the payroll is between $45,000 to $66,000 per year. For those payrolls that are between $66,000 and $200,000 per year, the companies can avail a 20% tax credit. Entertainment businesses in Louisiana that are engaged in the distribution or development of visual, audio, or audio-visual products are eligible to avail the benefits offered by this initiative. The job requirement for the company to qualify for the program includes creating a minimum of five new full-time jobs that are equal to or exceed a payroll of $45,000 per person per year for the residents of Louisiana.

Part
04
of six
Part
04

Alberta - Incentives Offered to Companies

Alberta Province, Canada provides various incentives to attract interactive entertainment companies wanting to expand or relocate there. Notably, the province provides incentives in terms of refundable tax credit at 25% through a program dubbed the Interactive Digital Media Tax Credit (IDMTC) of Alberta. Besides, the province also offers an additional 5% on wages for employees who self-identify as part of an under-represented group. Read on for elaborate details regarding the incentives.

INCENTIVE OVERVIEW

The Interactive Digital Media Tax Credit (IDMTC) of Alberta provides a 25% refundable tax credit for labor costs directly associated with interactive digital media (IDM) activities. The tax cut seeks to stimulate growth in the sector, encourage companies to remain and expand in Alberta, and attract top talented technology business people to the region. The incentive is specifically meant to support companies involved in the development of interactive digital media and gaming products. Only labor expenses directly linked to product production are eligible for the tax credit amounts. Moreover, Alberta advances additional tax credits of up to 5% applicable to all eligible costs via the diversity and inclusion program, considering that all conditions of hiring under-represented groups are met.

ELIGIBILITY

The eligibility requirements dictate that the business to benefit must be a corporation; must be a permanent business operating in Alberta during the applicable taxation year; and must not be exempted from taxes during the taxation period. Besides, the company set to benefit must either be providing eligible salaries and wages equal to or greater than $2 million or from $50,000 to $2 million, and be actively involved in either of the following activities:

  • The development of interactive digital media products such as video games

Once a corporation meets the above requirements, it can then apply for the Alberta Investor Tax Credit program.

DIVERSITY AND INCLUSION GUIDELINES

The extra 5% tax credit due to diversity and inclusion is determined on an individual employee basis. It is also for the under-represented employees in technical positions. The under-represented employees self-identify as female; Sexual or gender minority (LGBTQ2S+); individuals of Canadian indigenous ancestry; and individuals with long-term/repeating physical or mental disability; visible minority. Overall, the corporations are also mandated to have a "public facing diversity and inclusion policy on their website."

APPLICATION

The IDMTC program features two annual application intake windows. One, for new corporations intending to register with the program, and two, for previously registered corporations seeking to revise their labor forecasts; however, this second requirement is optional. The applications are made online during the active intake period, and the link for the application is available via the Alberta IDMTC website. Currently, the program is yet to announce the next intake window. The section below describes the process.

THE ACT

Applicants wanting to join the program must submit their applications during the application period, which is set by the Minister for Economic Development, Trade and Tourism Canada. Moreover, the Minister can set different application dates for the different classes of corporations; however, this is dependent on the eligibility determined by the salaries and wages of the corporations.

APPLICATION INFORMATION REQUIREMENT

Once corporations complete the online registration process, they proceed to provide their respective labor forecasts. The submissions must include one, a labor forecast of the corporation's projected eligible salary, wages, and bonuses during the year the application is made, and two, the corporations' eligible salary, wages, and bonuses paid in the fiscal year preceding the fiscal year the application is made. If approved, the corporation then receives an approval letter indicating the conditionally approved tax credit amount, then submits actuals at the end of the fiscal year to receive a tax credit certificate.

MUNICIPAL GRANT

Calgary — Alberta's cosmopolitan city is also creating a program offering grants from $750 to $4,000, which is said would yield an average grant of $1,750.

FEDERAL GRANTS

Besides the municipal grants, the Canadian government also offers at least 21 different federal grants designed for various media programs. These programs are explained in detail here. Check them out to determine, which one suits the project. Besides, Wonder can as well look into them to unveil more of their features.
Part
05
of six
Part
05

Average Salary - Entry Level Quality Assurance Workers

The average salary for entry-level quality assurance (QA) workers is estimated to be $48,467 per year in Austin, Texas; over $43,396 per year in Albuquerque, New Mexico; and about $44,724 per year in New Orleans, Louisiana. It was also estimated that the average salary for entry-level QA workers in Alberta, Canada, is $38,798 per year.
To determine the average salary for entry-level quality assurance (QA) workers in Austin, Texas; Albuquerque, New Mexico; New Orleans, Louisiana; and Alberta, Canada, we began our search by looking into industry-specific websites such as The Balance Careers to understand the typical career path in a QA job and the entry-level position of a QA job. According to an article published by The Balance Careers, the entry-level position of a QA job is being a ‘Tester’. The other QA posts such as analyst, manager, and engineer require experience. Therefore, for the purpose of determining the average salary for entry-level QA workers, we focused our search on entry-level QA testing workers in the assigned regions.
For each of the cities, we searched through various professional recruitment platforms such as LinkedIn, Payscale, ZipRecruiter, Indeed, and Glassdoor to obtain the average salary for entry-level QA workers. We also consulted media articles on the subject focusing on quality assurance from websites such as Forbes, Business Insider, Live Mint, Bloomberg, and The Wall Street Journal. A thorough search through media reports and industry reports provided no information on the average salary for entry-level QA workers. We, therefore, focused on the different recruitment platforms for a comprehensive view of the pay scale. The platform, Indeed, mostly designated the entry-level positions with the word ‘Junior’ and thus, considered the same to be synonymous with ‘entry-level’. Since each platform provided a specific figure for entry-level QA positions, we computed the average number across the various platforms. Our findings and calculations have been presented below.

Entry-Level Quality Assurance Workers

Employees in the quality assurance field begin at the entry-level position as ‘Testers’ and work their way up, based on their performance, to become analysts, product leads, software engineers, or take up various managerial roles.

Average Salary for Entry-Level QA Workers in Austin, Texas

  • According to ZipRecruiter, the average salary for an entry-level QA testing worker in Austin is $42,918 per annum.
  • According to Glassdoor, the average salary for an entry-level QA testing worker in Austin is $44,713 per annum.
  • According to Indeed, the average salary for an entry-level QA testing worker in Austin is around $54,639 per annum.
Based on the figures from ZipRecruiter, Glassdoor, and Indeed, the average salary for an entry-level QA testing worker in Austin, Texas, can be aggregated as follows,
Average Salary = [($42,918 + $44,713 + $54,639) / 3] = $47,423 per annum

Average Salary for Entry-Level QA Workers in Albuquerque, New Mexico

  • According to ZipRecruiter, the average salary for an entry-level QA testing worker in Albuquerque is $40,011 per annum.
  • According to Glassdoor, the average salary for an entry-level QA testing worker in Albuquerque is $46,781 per annum.

Based on the figures from ZipRecruiter and Glassdoor, the average salary for an entry-level QA testing worker in Albuquerque, New Mexico, can be aggregated as follows,
Average Salary = [($40,011 + $46,781) / 2] = $43,396 per annum

Average Salary for Entry-Level QA Workers in New Orleans, Louisiana

  • According to ZipRecruiter, the average salary for an entry-level QA testing worker in New Orleans is $42,550 per annum.
  • According to Glassdoor, the average salary for an entry-level QA testing worker in New Orleans is $46,897 per annum.

Based on the figures from ZipRecruiter and Glassdoor, the average salary for an entry-level QA testing worker in New Orleans, Louisiana, can be aggregated as follows,
Average Salary = [($42,550 + $46,897) / 2] = $44,724 per annum

Average Salary for Entry-Level QA Workers in Alberta, Canada

According to Payscale, the salary for QA workers in Alberta range anywhere from C$49,000 to C$105,000. The average salary of an entry-level QA testing worker in Alberta is found to be 23% less than the national average of Canada. Therefore, the salary for an entry-level QA testing worker can be calculated as follows,
National Average = C$68,000
Average Entry-level salary = [C$68,000 — (23% of C$68,000)] = C$68,000 — C$15,640 = C$52,360
Therefore, the average salary for an entry-level QA worker in Alberta is C$52,360, which is equivalent to $38,798 per annum.

Part
06
of six
Part
06

Price Per Square Foot - Commercial Real Estate

The average commercial price per square foot for commercial real estate is a metric that is applied to any space size or lot by simply multiplying this average by the desired size, the total commercial real estate price to be paid can be estimated. For the cities, states or countries being researched, the research team found that the average commercial price/sf in Austin is $48.65, in Texas is $110, in Albuquerque is $5.91, in New Mexico is $19.34, in New Orleans is $16, in Louisiana is $97, in Alberta is $16.3 and in Canada is $20.79.

We have looked for the relevant information in commercial real estate databases and publications and our search yielded publicly available information for some of the specified cities, states or countries like Texas, New Orleans, Louisiana and Canada. For cities or states with no directly available information, we looked for the available averages of the major districts or areas within their boundaries and computed the average commercial price per square foot for each of them.

FINDINGS

We will list the average commercial price/sf findings in two sub-lists: publicly available average commercial price per square foot and triangulated average commercial price per square foot as follows:

publicly available average commercial price per square foot:

  • Texas: The average commercial price per square foot of commercial real estate properties in Texas is $110.
  • New Orleans: The average commercial price per square foot in New Orleans $16.
  • Louisiana: The average commercial price per square foot in Louisiana $97.
  • Canada: The average commercial price per square foot for commercial real estate in Canada is $20.79.

Triangulated average commercial price per square foot:

  • Albuquerque: The average commercial price per square foot in Albuquerque is $6.70 for general industrial space and $5.12 for warehouse and distribution properties. Accordingly, the average commercial price per square foot in Albuquerque is estimated at $5.91 [average ($6.70 + $5.12)]
  • Alberta: The average commercial price per square foot in Alberta is estimated based on price averages of two major cities in Alberta: Calgary, the largest city of the province of Alberta, has an average price of $14.50, and Edmonton, the provincial capital city of Alberta, has an average price of $18.10. Accordingly, the average commercial price per square foot for commercial real estate in Alberta can be estimated at $16.3 [average ($14.50 + $18.10)].
Sources
Sources

From Part 01
Quotes
  • "The following is a topical summary of the rules and requirements for the Texas Moving Image Industry Incentive Program. Read the complete rules and requirements as promulgated in the Texas Administrative Code, which govern in the event of a conflict or ambiguity with the summary below. "
Quotes
  • "The Texas Enterprise Fund (TEF) awards “deal-closing” grants to companies considering a new project for which one Texas site is competing with other out-of-state sites. The fund serves as a financial incentive for those companies whose projects would contribute significant capital investment and new employment opportunities to the state’s economy."
  • "Who Can Apply? Companies planning a new project including a facility opening or expansion, with significant projected job creation and capital investment, where a single site in Texas is actively competing with at least one viable out-of-state option."
Quotes
  • "A total of $86 million has been earmarked for the enterprise fund over the upcoming two-year budget cycle, down from his original request of $108 million, while $22 million has been earmarked for the film and video game incentives, below the governor’s original $72 million request."
Quotes
  • "The City of Austin offers incentives to qualifying film, television, video game, & visual effects projects equal to 0.50% of wages paid to local workers. Projects produced by an Austin-based company or which significantly promote Austin may be eligible for an additional 0.25% incentive for a total incentive of 0.75%."
From Part 03
Quotes
  • "In the past decade, Louisiana’s nation-leading workforce program — LED FastStart® — and a game-changing incentive have elevated the state’s digital game industry, a subset of a prime Louisiana target, the software and IT sector."
Quotes
  • "Our Digital Interactive Media and Software Development Incentive is best-in-class and one of the only programs targeted to the video game industry. You won’t find a more valuable program in the US, so that’s a big pull for companies."
  • "We’ve also just created a first-of-its-kind entertainment overhead incentive – the Qualified Entertainment Company (QEC) tax credit."
  • "Higher education partnerships are a key part of the interactive program. LSU, UNO, Louisiana Tech, and the University of Louisiana at Lafayette are able to bolster their computer science and digital media programs through these partnerships, some of which have included building facilities for students to expand their education. "
From Part 04
Quotes
  • "*Whether or not a corporation is considered substantially engaged is determined using the formula outlined in section 5(1) of the Interactive Digital Media Tax Credit Regulation."