In 2005, Louisiana lawmakers introduced a digital media incentive that awarded tax credits to companies developing video game software in the state. Later upgrades broadened the law’s impact, increasing the 25 percent tax credit to 35 percent for Louisiana-based payroll and extending the tax credit’s application to interactive software development in many industries – from engineering to healthcare. Still, Louisiana’s digital momentum was just beginning to build three years ago when the state recruited the industry’s biggest entertainment player. Would EA bite?
The Challenge
By early 2008, Louisiana’s digital media incentives were feeding off momentum in the state’s film industry, where earlier incentives were driving film production to the third-highest level in the U.S., after California and New York. Louisiana Economic Development, the state’s economic development agency, identified digital media and software development as a growth industry with much stronger long-term potential than the film industry. Properly cultivated, the digital sector could generate 23,000 new permanent jobs with high wages over the next 20 years, LED estimated, and their reach could touch virtually every existing sector – from oil exploration to manufacturing to healthcare.
Here also was an industry young enough that migration to Louisiana wasn’t out of the question. LED, joined by the Baton Rouge Area Chamber, Baton Rouge Area Foundation, LSU, the Baton Rouge Mayor-President’s Office and the new Baton Rouge Area Digital Industries Consortium began actively courting digital entertainment and software companies at conferences and in private meetings. BRADIC created the Red Stick International Animation Festival in Baton Rouge to build a surge of interest around the digital sector in the city. Independent studios already were opening shop in Baton Rouge technology incubators and claiming the digital media tax credits. Early digital success stories also were springing up in New Orleans, Lafayette and Shreveport. Still, the state needed a big name to tell the world its digital story and validate the model’s success. In 2006, that opportunity began to emerge as Louisiana and Baton Rouge economic development leaders began actively cultivating a business relationship with Electronic Arts Inc., the biggest name in the game development world.
The Solution
The timing was propitious. EA wanted to experiment with better ways of assuring the best experience for its customers. The way forward might include fewer quality assurance locations with a greater concentration of worker talent fine-tuning a wider variety of games. But first things first.
“The initial objective was to create capacity for games that were developed in the Tiburon Studio in Florida – small beginnings – and the challenges were similar to any startup business,” said Mike Robinson, EA’s head of worldwide quality assurance.
Louisiana landed a new EA quality assurance center in August 2008 by offering the digital media tax credits, a renovated building on an LSU campus several miles south of the main campus, the expectation of a new permanent building in the future on LSU’s main campus, and hiring and training incentives from LED Faststart™, now rated the best state workforce development program in the U.S. The workforce incentive was a godsend, EA officials said.
“They played a huge role in helping us develop our EA certification,” Robinson said. “That’s the program we use for all testers who join our team, and we’ve extended that and taken it worldwide.” The result, he said, is that the skills of EA testers and developers are improving across the board worldwide because of the LED Faststart contributions.
The Results
Meanwhile, at EA’s North American Test Center, growth in scale and skill has occurred. Located on LSU’s South Campus in a temporary facility of about 18,000 square feet, the site teems with nearly 400 employees, half of them full-time and about 10 percent in management roles. By design, the center carries significant part-time roles to tap the talent of local college students and to accommodate their study schedules and lifestyles. Students make up roughly half the employee roster, but EA has had success recruiting others in the Baton Rouge area to test children’s games and casual games more popular with adult women, Robinson said.
In July 2011, Louisiana Gov. Bobby Jindal, LSU, EA and other partners broke ground on the 94,000-square-foot Louisiana Digital Media Center, where EA will move its global test center from the current location to the main LSU campus. There, EA will share space with LSU’s Center for Computation & Technology, a high-performance computing center engaged in academic and business research, and with AVATAR, the LSU curriculum of Arts, Visualization, Advanced Technologies and Research that prepares students for the real-world intersection of creativity and technology.
“One of the things we’re excited about exploring in the future is the partnership with LSU,” Robinson said. “When we move to the main campus, that will really strengthen our ability to attract students to our workplace and give the opportunity for some folks to just walk upstairs when they finish class.”
In the meantime, EA continues to assign greater responsibility to its North American Test Center in Baton Rouge, with game testers coordinating work on a daily basis with studios in such places as Stockholm, London and Bucharest. EA operates in more than 30 locations worldwide.
The Louisiana experience confirms what the company hoped for from the outset, said Craig Hagen, EA’s senior director of government affairs.
“I can’t say emphatically that we wouldn’t have come (to Louisiana) had there not been an incentive. EA goes to the places where we can find the absolute best talent. That’s the No. 1 determining factor of why we choose to locate somewhere,” Hagen said. “But I can tell you that the tax credit was a very definite factor in our coming to Baton Rouge. Between this building (the Louisiana Digital Media Center) and the tax credit, it would have been hard for us to say no to a deal like that, because you absolutely have some of the best talent in the world.”
The New Louisiana
EA’s success in Baton Rouge places it at the vanguard of a New Louisiana, said Gov. Bobby Jindal, a state where existing employers and major out-of-state corporations are recognizing the best business investment opportunities available in the nation’s most-improved business climate.
“The new Louisiana Digital Media Center at LSU will not only enable EA’s growth, but it also will help us grow a thriving digital media industry in Baton Rouge and in other Louisiana communities so that we can continue to create good jobs for our people,” Gov. Jindal said.
Since 2008, business development projects won by Louisiana will result in more than 45,000 new jobs and more than $10 billion in capital investment across the state. These wins, which are fueling hundreds of millions of dollars in new sales for Louisiana small businesses, reinforce what others are saying about the New Louisiana:
- Southern Business & Development magazine in July 2011 awarded Louisiana its State of the Year honor for the third straight time. In ranking Louisiana’s economic development performance better than 16 other Southern states, the magazine said, “It can’t get any better.”
- Business Facilities magazine in July 2011 ranked LED Faststart as the No. 1 workforce development program in the U.S. for the second consecutive year.
- Pollina Corporate Real Estate awarded Louisiana its first-ever Most Improved State designation based on Louisiana's improved business climate ranking from 2008 to 2010. Louisiana ranked 20th on Pollina's 2010 business climate ranking, up from 27th in 2009 and 40th in 2008.
- Site Selection magazine in May 2011 judged Louisiana Economic Development as the highest-performing state economic development agency in the nation. Site Selection also deemed Louisiana's business climate ninth-best in the nation, the state’s first Top 10 appearance, and rated the Louisiana business climate as the most-improved in the U.S.
- Business Facilities magazine named Louisiana its 2010 State of the Year based on its strong business climate, business-friendly tax environment and overall business development success. Business Facilities Editor in Chief Jack Rogers said, “We were particularly impressed with the diversity of Louisiana's strategy for developing high-growth sectors, including digital media, alternative energy, advanced manufacturing and modular nuclear power plant components.”
