Gaming industry wants film credits to survive

MADISON – Filament Games is a small Madison firm that wants to be the developer of the "Citizen Cane" of educational games. But these goals may be thwarted, or at least stifled, company founders Dan White and Dan Norton said, if Wisconsin does away with the one-year-old film incentive subsidy.

"If we want to continue to grow, these credits will have more and more importance on our bottom line," said White. "The game industry is a broad landscape now."

Filament used the credits in 2008 to build it staff from three to nine to produce to educational games, one with National Geographic on ocean ecology, and another that teaches about the court system in partnership with retired Supreme Court Justice Sandra Day O'Connor.

Wisconsin Gov. Jim Doyle has tagged the film subsidy to end, saying that it didn't meet expectations and should be reconsidered as the state grapples with a $5 billion budget shortfall. He proposed to instead instill a $500,000 grant program.

Incentives enacted last year allows a 25 percent investment tax credit for using Wisconsin productions, a sales tax exemption for production-based equipment, machinery and services, a 25 percent refundable tax credit for direct production expenses for films, TV shows, video game and commercial ventures. Doyle has said that these perks cost 20 times more per job created than other programs run by the state Department of Commerce. In a cost benefit analysis, the department studied the subsidy's most famous benefactor so far, the movie "Public Enemies" filmed last year in the state, and concluded that the production brought in $5 million in economic development funds while costing the state $4.6 in subsidies.

George Tzougros, executive director of the Wisconsin Arts Board, said the commerce study doesn't tell the whole story. Plus, it puts the state at a severe disadvantage in attracting production business. More than 40 states have film incentives in addition to Canada.

"You have to have them to be in the conversation," Tzougros said.

As the joint finance committee works to resolve budget issues, legislators working on resolving the issue have indicated they want to change the film incentives rather than scrap them. Whatever happens, they will remain in place until the end of the current biennial budget at the end of June.

That may not be enough time for game companies like Madison's Raven Software. A division of gaming giant California-based Activision Publishing Inc., the 185-person local company has yet to be able to take advantage of the credits, explaining that a firm has to apply for incentives at the beginning of a project. Raven produces games in conjunction with the film industry, such as the new X-Men Wolverine game to be released in about a week.

"I feel like they should tweak it and not throw away the baby with the bathwater," said Raven co-founder Brian Raffel.