When former Red Sox pitcher Curt Schilling moved his video game company 38 Studios to Rhode Island in 2010, the decision was not just a snub to the state of Massachusetts. It was also part of a growing rivalry in which states are competing to create a “digital Hollywood” on their soil.
According to lawyer Sean Kane, 21 states and all 10 Canadian provinces are now vying for a slice of the video game pie. He says that many places are retooling incentive packages that were originally put in place to attract movie productions.
“A lot of jurisdictions like game companies better than films because the film industry is transient.” said Kane, who advises gaming clients about incentives at Pillsbury. He added that a gaming hub can mean hundreds of very well paid individuals settling down in an area.
While Northern California remains the pre-eminent hub for game developers, places like North Carolina and Rhode Island are creating hubs of their own through aggressive loan and tax incentives. In some states, like Louisiana, the incentives are in the form of cash subsidies that can be redeemed or exchanged.
Kane says the incentive led game giant Electronic Arts (NSDQ: ERTS) to build testing facilities near Louisiana State University that employ 600 people.
The subsidies are not universally popular and one New Orleans study suggested they are not worth it (in the case of films at least). As for Schilling’s 38 Studios, the Rhode Island governor initially questioned the wisdom of offering a $75 million loan guarantee to someone who he said might have faked a famous World Series incident involving bloody sock.
Schilling himself appears to be thriving in Rhode Island. His studio last month released “Kingdoms of Amalur: Reckoning,” a fantasy game designed by industry luminary R.A.Salvatore.