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They’re game for support

Executives, analysts urge Mass. to offer incentives to keep the state a player in the video game industry

At Turbine Inc. in Needham, Vince Ouy (top) worked on a illustration while quality assurance employees (bottom, left) tested games. Kirk Farrell (center) worked on an illustration for Dungeons and Dragons Online, a game that Max Nichols and Kate Chaplin (right) provide quality assurance for. At Turbine Inc. in Needham, Vince Ouy (top) worked on a illustration while quality assurance employees (bottom, left) tested games. Kirk Farrell (center) worked on an illustration for Dungeons and Dragons Online, a game that Max Nichols and Kate Chaplin (right) provide quality assurance for. (Photos By Wendy Maeda/Globe Staff)
By Hiawatha Bray
Globe Staff / June 6, 2011

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The video game industry launches its giant annual festival E3 tomorrow in Los Angeles — the year’s best opportunity for game makers to show off their newest and hopefully, hottest stuff. And that includes a couple of game developers from right here in Massachusetts.

Irrational Games of Quincy, creator of the critically acclaimed 2007 hit BioShock , will offer a preview of the next game in the series: BioShock Infinite. And Harmonix Music Systems of Cambridge, still recovering from a brutal decline in demand for its flagship Rock Band games, will unveil its next major title at E3; whether it’s a new entry in its music game franchise, a sequel to its popular Dance Central, or something entirely new, only Harmonix knows.

It’s companies like Irrational and Harmonix that make Massachusetts a world center of video game development. But some industry executives and analysts say that to keep attracting game companies to Massachusetts, and remain competitive against rivals from California’s Silicon Valley to Louisiana’s Baton Rouge, the region needs a deeper pool of talented workers and a helping hand from state government.

“I think we’re already starting to miss the boat here,’’ said Michael Cavaretta, a lawyer at Morse, Barnes-Brown & Pendleton in Boston who works with local game companies. “Other states are getting more aggressive.’’

As one example, Cavaretta cited Louisiana, where a program of tax incentives for video game companies has attracted investments from industry giant Electronic Arts Inc. and French mobile game publisher Gameloft. “You don’t think of Louisiana as a hotbed of technological, media, and artistic talent.’’ Cavaretta said. “Nevertheless, because of these incentives, they’re attracting companies.’’

Legislation to make state tax breaks available to video game companies that come to Massachusetts, or add jobs here, will be taken up by lawmakers this fall. “For a fairly small investment, we have the potential of grasping billions and billions of dollars of additional revenue,’’ said Representative Vincent Pedone, the Worcester Democrat who sponsored the bill.

But Eric Nakajima, senior innovation policy adviser at the Massachusetts Executive Office of Housing and Economic Development, has warned that the state may not be able to afford video game tax credits.

Even so, the state-sponsored John Adams Innovation Institute has teamed up with Becker College in Worcester to launch the new Massachusetts Digital Games Institute. Starting in January, the institute will provide laboratories for testing new gaming technologies, as well as support for a “reverse sabbatical’’ program in which game company executives will share their skills with college students and faculty.

Even without such assistance, Massachusetts has built a video game industry that employs more than 1,200 workers and generates about $2 billion in annual economic activity for the state. “There is a strong local game development community here,’’ said Timothy Gerritsen, director of product development at Irrational Games. Irrational has grown from 45 employees in 2008 to more than 100 now, and is still hiring.

Slumping demand for Rock Band games led former corporate parent Viacom Inc. to sell Harmonix to a private investment firm. Yet Harmonix chief operating officer Florian Hunziker said, “I think the music game business is super-healthy, actually.’’

Even as consumers sour on band games, they have embraced dance-based titles like the company’s Dance Central, which has sold 2.5 million copies since its release last year. Hunziker wouldn’t describe the new product Harmonix will unveil at E3, but said the company is considering ways to revitalize the Rock Band franchise.

Meanwhile, the video game industry has put down some roots in Western Massachusetts. HitPoint Inc. in Hatfield makes games for Apple Inc.’s iPhone and iPad, including “advergames’’ sponsored by major consumer product companies like Unilever USA, Ford Motor Co., and Toyota Motor Corp. President and cofounder Paul Hake said his company has grown from eight full-time employees to 24 a year ago.

Despite the relatively remote location, he said, the company’s been able to recruit skilled workers, drawing from nearby colleges like the University of Massachusetts Amherst, Mount Holyoke, and Smith.

Still, developers complain about the challenge of finding enough skilled workers.

“Our primary problem is talent,’’ said Albert Reed, studio director of Demiurge Studios Inc. in Cambridge, which is putting the finishing touches on its latest game, Shoot Many Robots. “The talent pool in Boston is wonderful, but it isn’t as large as it needs to be.’’

While Massachusetts colleges produce many capable entry-level workers, the pool of experienced game designers is much shallower here than on the West Coast. As a result, Demiurge must often recruit new workers from outside the region. Reed said that tax breaks would help game developers cover the extra cost of recruiting new employees. “The number-one thing the state can do for us is provide an environment where we can attract talent,’’ he said.

“The only thing I wish is that we could get more game companies here,’’ said Ken Surdan, vice president of operations at Turbine Inc. in Needham, which runs the Internet-based game Lord of the Rings Online.

The current size of the Massachusetts game sector is “still relatively modest compared to California or even Seattle,’’ said Surdan. “If you get into two, three, four, five thousand employees, you can get into a real self-sustaining economic engine.’’

Hiawatha Bray can be reached at bray@globe.com.