News Column

A monster deal

May 11, 2014

By Sherri Buri McDonald, The Register-Guard, Eugene, Ore.

May 11--PipeWorks Software, developer of the soon-to-be-released mobile game, "Godzilla Smash3," is creating the first video game to receive an incentive from the state under new rules approved last year by Oregon lawmakers.

The incentive, which previously was available only to film and television producers, will help grow Oregon's video game industry, one of the oldest in the country, said Lindsay Gupton, PipeWorks studio president.

Godzilla Smash3, which combines 3-D images of the "King of Monsters" with puzzle game play, is set to debut Friday, along with the latest Godzilla movie.

It brings the Eugene game studio, recently known for such games as "Dancing With the Stars," and "World Series of Poker," back to its Godzilla origins.

Founded in 1999, PipeWorks created three Godzilla games for publisher Atari from 2002 to 2007.

In the ensuing years, "the passion never died down," Gupton said. "There's still Godzilla figurines everywhere in the office."

So when PipeWorks caught wind of another Godzilla movie in the works, it teamed up with Rogue Play, a startup mobile game publisher in the San Francisco Bay area, to make a direct pitch to filmmakers Warner Bros. Pictures and Legendary Pictures for the right to produce IOS and Android mobile/tablet games.

Both PipeWorks and Rogue Play are owned by Foundation 9 Entertainment, a large game developer based in Irvine, Calif.

"For us to go and get the rights to it was somewhat of a coup," Gupton said.

"We turned the tables on the business model," he said, noting that film studios usually seek out game developers and publishers, not the other way around, and it's typically work for hire, with the studio paying a developer to design a game.

But with online distribution of games and lower costs of entry, especially for mobile games, the video game industry is changing. It's no longer the case where the holder of the intellectual property, a film studio, for example, contracts with a publisher, which then contracts with a game developer, to produce a video game tied to a film.

Game developers are taking a more active role in landing and financing some projects.

PipeWorks and Rogue Play financed Godzilla Smash3 internally, said Gupton, who declined to reveal the project's total budget, or the amount of the cash rebate PipeWorks is expecting from the Oregon Production Investment Fund, a state incentive.

"We're getting more skin in the game," Gupton said, and the state incentive is very helpful as PipeWorks makes that transition.

The state incentive contributed to PipeWorks' decision to add four hires for the Godzilla project, Gupton said.

"Because we were doing different things with this game, we made hires for specific types of talent," he said, adding that those hires will stay on to work on other PipeWorks projects.

The company now has about 55 employees and plans to hire more this year, depending on how other projects line up, Gupton said.

The state incentive also allowed the studio to do a higher-quality game than it would have been able to design otherwise, Gupton said.

"We're really proud of the bar that's been set on this game," he said. "We'd love this to be a hit," and open doors to more projects.

PipeWorks will continue to make improvements to the game after it launches, "depending on what the players desire," Gupton said.

The game is free to download, and PipeWorks makes money when players pay for upgrades, such as extra lives, special power-ups, and more content, like additional cities, Gupton said.

"We're launching with Tokyo and San Francisco," he said. "New cities, which are not yet revealed, will follow the path of Godzilla through the movie."

"We hope to have a very large audience," Gupton said. "Typically a small percent of the audience (3 percent to 6 percent) will actually put money into the game."

PipeWorks has applied, and qualifies for state incentives for three more projects, including innovations on World Series of Poker, and two other games that Gupton declined to reveal.

Historically, the incentive, which returns to productions 20 percent of what they spent on goods and services in Oregon and 10 percent of their Oregon-based payroll, was available only to film and television productions.

But last year, the Oregon Legislature expanded it to include video game productions and post-production projects, work after shooting has ended, such as editing, special effects and sound design.

"It's nice they're starting to recognize video games as an art form and media form similar to film and TV," Gupton said.

He said the incentive will help Oregon grow its digital game industry.

"Eugene is one of the longest standing video game centers in the country," Gupton said.

"It was (among) the earliest, but still has about the same number of people working in games as in the '80s," he said. "Meanwhile (the game industries in) San Francisco, Seattle and Austin have all exploded and (much of that growth is) from incentives and the talent base that has developed.

"Oregon has the same raw ingredients to be as big of a center as those (cities), and I think the incentive will help us along," Gupton said.

That was the type of thinking that won over Rep. Nancy Nathanson and her colleagues on the House Transportation and Economic Development Committee.

"My committee heard the proposal to expand the film and video (incentive) to other areas of design and creativity," she said .

"Oregon is already doing remarkable work in film and video," she said, "and now we're encouraging other innovations in design.

"It's exciting to me to see this develop. This is the early stages of what's going to grow as part of Oregon's export economy. We can export intellectual products; It's not just agriculture and other goods."

Andrew Nguyen, 21, a UO junior studying theater arts, was excited about Godzilla Smash3 for a different reason.

He eagerly tested the game before a recent presentation at the Cinema Pacific Film Festival, picking up a tablet and sliding his finger across various colored tiles on the lower half of the screen.

Depending on which tiles Nguyen touched, the massive Godzilla in the upper half of the screen, towered over the city landscape, crunched through buildings, or swatted at ships in the bay.

"The design is very clever," Nguyen said. "It reminds me of the puzzle games, like Bubble Babble, I used to play when I was young."

Oregon Production Investment Fund

The Oregon Production Investment Fund, OPIF, rebates 20 percent of money a film or television production spends on goods and services in the state and 10 percent of their Oregon-based payroll.

Projects must spend at least $1 million in Oregon per project, or season of a series.

The Indigenous Oregon Production Investment Fund (iOPIF), a subfund of OPIF, offers a similar rebate to local productions spending at least $75,000 per project, up to the first $1 million, in Oregon.

As of last year, this subfund is now open to video game projects and post-production services.

The OPIF receives $10 million in tax credits each fiscal year (July 1 to June 30). Those credits are auctioned off online by the Oregon Department of Revenue to Oregon taxpayers who receive tax credit certificates in exchange for their contributions to the fund.

The certificates can be purchased at up to a 5 percent discount ($475 for a $500 tax credit certificate.) But in the latest auction in October, the average bid was $497.

The state's general fund essentially forgoes the $10 million it issues in these tax credits each fiscal year.

The auction raises the cash for the fund to pay for rebates to film, TV and other productions in Oregon. Five percent of the money raised for the OPIF is earmarked for the iOPIF.

"It's nice they're starting to recognize video games as an art form."

-- Lindsay Gupton, PipeWorks studio president, on new rules extending state tax breaks

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(c)2014 The Register-Guard (Eugene, Ore.)

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