Digital Media: New Mexico Is Ready For Player One

The Land of Enchantment, already a thriving location for TV and motion picture production, aims to become the go-to place for video game development.

By the BF Staff
From the July/August 2019 Issue

It’s no secret that New Mexico has become a premier destination for the film industry. Independence Day: Resurgence, The Mule, Better Call Saul and Breaking Bad are just a few of the most recent films and TV shows that have shot in New Mexico. This is in part thanks to the Refundable Film and Media Tax Credit, an incentive that rebates 25-30 percent of most film and digital media production expenses incurred in New Mexico.

New Mexico Digital Media

The growth of the film industry has resulted in some major payoffs, such as spurring the state’s universities to create related degree programs, generating relevant talent and attracting Netflix to Albuquerque. Netflix recently purchased ABQ Studios and plans on spending $1 billion on production over the next 10 years and creating up to 1,000 production jobs in the state per year.

But it’s also opened the door for a new industry—video game development—to grow in New Mexico. There is a wealth of relevant talent for that industry, the Refundable Film Tax Credit applies not just to film but to all forms of digital media including video games, and the overall cost structure of the state is dramatically lower than the places where the industry is currently concentrated.

New Mexico has a wealth of high-quality entry-level talent. New Mexico has over 133,000 students enrolled in public institutions throughout the state—almost 7 percent of the state’s entire population. Almost 40,000 of these are full-time students enrolled in top-tier research universities.

UNM, located in Albuquerque, is one of New Mexico’s flagship universities and has over 26,000 students enrolled annually. UNM is ranked in the top 100 graduate schools for its Computer Science, Engineering and Fine Arts programs by U.S. News and World Report. UNM offers a multi-disciplinary Cinematic Arts program focused on film, video gaming and animation.

NMSU, located in Las Cruces, with a total enrollment of over 14,000, is home to the Creative Media Institute (CMI) program which offers a Bachelor of Creative Media degree. CMI is a cross-disciplinary program that prepares students for jobs in digital arts, filmmaking, animation and visual effects. The program was rated a Top 50 Public Animation School Program in the U.S. by Animation Career Review. Forbes recognized NMSU as one of America’s Top Colleges in 2018.

For highly specialized, experienced science, technology and engineering talent, New Mexico is virtually unbeatable. The state is home to a host of cutting-edge R&D institutions, including two Department of Energy National Labs—Sandia and Los Alamos—which employ approximately 24,000 people combined. New Mexico also has over 15,000 people employed specifically in IT jobs. Recent growth has included new entrants to the state, like Facebook, which is building a 2.8 million square foot data center, with over a billion dollars in associated investment in Los Lunas, NM.

New Mexico has the ability to reduce costs for video game companies by almost 50 percent. New Mexico boasts a uniquely powerful incentive—the Film and Media Tax Credit Program which is also applicable to video game production. This program refunds 25-30% of production costs (including compensation paid to New Mexico residents) spent within New Mexico back to companies.

On top of this, the cost structure for compensation and other operating expenses, driven largely by below-average cost of living and a lack of intense competition for talent, is already at or below the national average, and often 20-35 percent below major video gaming industry hubs like Austin or Southern California. In addition to keeping costs reasonable, the lack of intense competition for even the most highly-in-demand skills makes it dramatically easier for companies to attract and retain talent.

The Film and Media Tax Credit, combined with low labor and operating costs, provides companies with savings of as much as, and sometimes more than, 50 percent relative to current industry hubs. These kinds of savings are dramatic enough to fundamentally change a company’s overall economic dynamics. For early stage companies, investor capital can be stretched to last twice as long or hire a larger team and get to market faster.

For more established companies, lower costs can increase profitability, be used to lower product prices or free up capital to diversify product lines or update existing products more frequently.

Ganymede Games is a studio that has already selected New Mexico for its headquarters. It is comprised of industry veterans from major studios like Riot Games, Blizzard, Electronic Arts and Wargaming. The Ganymede team is composed of seasoned gamers and adventure seekers whose passion for exploring new worlds infuses everything they do. However, they’re also keenly aware of the financial benefits that exist for digital media companies that locate in New Mexico.

“We left the high cost, noise and density of high-tech cities when we discovered Las Cruces, which is affordable, offers a higher quality of life, and now we have plenty of wilderness to explore both in-game and out-of-game,” said Prochazka. “The affordability allows us to maximize value to our investors with an experienced, world-class team. I’ve been fortunate to work with some of the best people in the world, all over the world, and we are bringing that experience to New Mexico. The gaming world is incredibly competitive and finding an affordable, high quality of life is so important to get the best results from our talented team.”