Guha Bala, left, and his brother Karthik, who run video game development company Velan Studios in Troy.
Guha Bala
A promotional image for the upcoming video game Grand Theft Auto VI, created by New York-based game studio Rockstar Games, projected to become one of the biggest media releases of all time when it comes out this fall.
Rockstar Games
Competitive video gamers from 16 Capitol Region area high schools at the University at Albany Esports Arena during an event in 2024.(Lori Van Buren/Times Union)
Lori Van Buren/Times Union
ALBANY — This fall, a New York studio is expected to have the largest media release perhaps in the history of entertainment, with billions of dollars in projected sales. But it isn’t the release of a blockbuster film, a hit television series or a Broadway musical.
It’s the scheduled release of “Grand Theft Auto VI”, the latest installment of the popular video game series created by Rockstar Games, whose headquarters are located in New York City (as is the headquarters of its parent company, Take-Two Interactive). The release emphasizes both the economic and cultural powerhouse video games now represent — and the need for the state to try to bring more of the industry to New York.
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While gaming studios, including major ones like Rockstar, abound across the state, New York still lags behind other locations as a hub of game development, with most studios in the country based on the west coast around Silicon Valley, Los Angeles or Seattle. On the East Coast, New York also faces heavy competition from the Canadian province of Quebec and the city of Montreal, thanks to generous tax incentives that attract studios to establish footholds there.
“These are all metros that are have a level of talent density and density of companies,” said Guha Bala, president of game development company Velan Studios, located in Troy. “So, if a person wants to make video games, they can move there, have a family and not worry if one product doesn’t work or one company doesn’t work.”
New York offers its own tax credit program for video game production, something it now plans on expanding in order to further bolster development.
Empire State Development, the state’s economic development agency, announced earlier this month that it was proposing an update to its Digital Gaming Media Production Tax Credit Program to allow companies to receive up to $5 million in tax credit for producing digital gaming products in the state. In order to qualify, gaming companies must have a minimum budget of $50,000 in development costs and 51% of all production costs must be paid in New York. Credits are only awarded after a game studio has published or shipped a finished product.
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“Video game development is very expensive. These are high-paying roles, and game development is both a team-oriented process and also a lengthy process,” said Jenn Hinton, director of games industry relations at the Rochester Institute of Technology, considered one of the top universities nationwide for game design. “Video games are in development for multiple years, so by having a credit associated with them, that can relieve some of the financial burden associated with the development of those games.”
The tax credit is modeled after the state’s Film Tax Credit Program, providing incentives for movie and television productions, types of media that have long been associated with New York’s cultural output. But Hinton noted that video game production doesn’t quite work the same way as film.
“Film and television is a pretty transient business. A feature film comes into town wherever that may be, the talent comes in and the crew comes in, and when they’ve gotten all the shots that they need they leave,” Hinton said. “Video game studios set up their roots. They’re brick and mortar buildings, and the people that work there ideally become members of that community.”
Outside of New York City, the Capital Region also serves as one of the main centers for video game production in the state. The video game company Blizzard, known for worldwide hit games like “Overwatch” and “World of Warcraft,” maintains a studio in Albany. At Velan Studios in Troy, Bala and his brother Karthik have worked with Nintendo to develop games in popular franchises like “Mario Kart” and “Star Fox.”
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Bala called the state’s video game tax credit program a “step in the right direction,” but said more needs to be done if New York wants to have the same kind of cultural clout with video games as it does with other forms of media.
Video game studios like Velan often rely on global labor supply chains, meaning certain aspects of work may be done outside of the state and even overseas. Having 51% of production costs, including wages and salaries for employees, required to be in New York to eligible for the tax credit might inhibit some studios from seeking it, Bala said.
“It’s neither as extensive nor as accessible as other programs,” he said. “There’s some peculiarities of the program in New York that makes it harder for companies here to participate.”
Bala contrasted it with a game studio Velan runs in Toronto, which receives a 35% tax credit from the province of Ontario based on the number of people in the region who worked on the product, rather than a percentage. He said more game developers would be inclined to enroll in the New York’s tax credit program if it used a similar threshold.
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“If they do that, that single change could actually dramatically improve the enrollment,” Bala said.
As for ensuring the games industry in New York has the necessary talent, the state has made efforts to establish links between local studios and universities in the state incubating the next generation of game developers. Empire State Development has designated three universities — Rochester Institute of Technology, Rensselaer Polytechnic Institute and New York University — with the title of “Center of Excellence in Digital Game Development,” allowing them to receive funds to collaborate with local business communities and spur economic development.
“The idea is to try and keep the talent that we’ve educated here inn New York state and contributing to the game studios that exist in New York state,” Hinton said. “That’s a shared goal and and value between the universities and the studios.”
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