COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON LEGISLATIVE OVERSIGHT Room 400, City Hall Philadelphia, Pennsylvania 19106 Wednesday, January 22, 2025 2:18 p.m. PRESENT: COUNCILMAN ISAIAH THOMAS, CHAIR COUNCILWOMAN RUE LANDAU, VICE-CHAIR COUNCILWOMAN QUETCY M. LOZADA COUNCILMAN MARK SQUILLA COUNCILMAN JEFFREY YOUNG, JR. RESOLUTION: 240983 - - -
Today is Wednesday, January 22nd. The time is 2:18 p.m. and we are now ready to call to order the Committee of Legislative Oversight. Again, good afternoon everyone. Welcome to Philadelphia City Council session. I want to thank my colleague Councilmember Lozada for being here with me today, and I now note that the hour has come. Mr. Maynard, are you ready?
Mr. Maynard, will you please call the roll to take attendance. Members that are attendance will say aye to notify that you're present.
Present. Thank you, Mr. Maynard. This hearing is now called to order. This is the public hearing of the Committee of Legislative Oversight on Resolution 23 No. 240983. Mr. Maynard, will you please read the title of the hearing resolution to be heard today.
Resolution 5 240983, authorizing the Committee on Legislative Oversight to hold hearings to receive the report of the PHL Gaming Task Force to learn about its findings and the actions thus far taken and to review the impact of this work on the vital gaming and tech sectors in the City of Philadelphia.
Thank you, Mr. Maynard. Before I call the first panel, I just want to take a moment to first and foremost talk about the importance of the gaming industry. For those who don't know, this hearing is extremely important to us as the City of Philadelphia because gaming is one of those industries that we want to be recognized to be branded as it relates to how people think about our city. Far too often when I hear people describe the City of Philadelphia through an economic lens, we call Philadelphia the city of eds, meds and beds. And if you don't know, those eds represent our institutions, those meds represent our universities and those beds represent the hospitality industry. While all of those things are great and great ways to be branded as a city, we now know we have a growing biotech scene predominantly in the West Philadelphia section so that's becoming part of the narrative. And as we begin to modify that narrative to add biotech, my goal and our advocacy as it relates to the work that we're trying to do is to make gaming a part of that conversation. We want Philadelphia to be a gaming city. The gaming industry is a multi-billion dollar industry. And when you think about the home of gaming, it doesn't necessarily exist. We want to compete with other cities, whether they're in Canada, whether they're in the South. We want to compete with other cities to be known as the city that's the home for gaming in the gaming industry. And so, with that intentionality in mind we started the PHL Gaming Initiative. Then we moved into the PHL Gaming Task Force, and today we're able to have our first hearing to examine the findings of the PHL gaming report and to listen to recommendations from experts in the gaming community who are going to advise us as it relates to what government can do to turn that dream into a reality and to have Philadelphia be the gaming capital of the country and hopes to be the gaming capital of the world. So I want to say thank you all as it relates to every member of the PHL Gaming Task Force, and I also want to give a huge, huge shout-out to my Chief of Staff Dom Miller who has been the point person from my office as it relates to leading the Gaming Task Force, leading the PHL Gaming Initiative and fighting to make sure that the gaming industry is one of the most recognized and important industries in the city of Philadelphia as we start 2025 and move forward. So, Mr. Maynard, with that being said, if you can please call the first panel to testify. But before you do that, I wanted to take a moment to acknowledge the presence of our Vice-Chair Councilmember Rue Landau, who just as a side note led a phenomenal hearing this morning on an important issue that also speaks to the future of the City of Philadelphia. So, Councilwoman, thank you for being here today, but most importantly thank you for your leadership as a new member of City Council who's hit the ground running. Folks would never have known you were a new member. So thank you. Thank you very much. Mr. Maynard, the first panel.
Yes, Mr. Chair. The Committee will hear from Tempest Carter from the Commerce Department and Nicodemus Madehdou, the Chief Executive Officer of Jump Button Studios. Nicodemus, I apologize if I mispronounced your last name. (Witnesses approached Witness table.)
Please state your name for the record and please begin with your testimony. We're so excited to hear from you and your department as it relates to today's topic.
Absolutely. Hello. My name is Tempest Carter. Good morning or good afternoon, Chairman Thomas and the members of the Committee on Legislative Oversight. My name is Tempest Carter. I am the Director of Strategic Tech Initiatives in the Department of Commerce. I'm here to testify on Resolution No. 240983, which authorizes a public hearing regarding the results of the PHL Gaming Task force as well as related efforts to support gaming in Philadelphia. First, I want to thank the Committee for recognizing the tremendous potential of Philadelphia's tech industry. Gaming is a burgeoning subsector that has seen impressive growth in recent years. We've witnessed a rise in gaming-related events, new startups and educational initiatives, all of which contribute to making Philadelphia an exciting hub for innovation. Our city is also home to a growing number of gaming studios, independent developers and esports organizations. A notable example is Nerd Street Gamers also known as Localhost, which brought the nation's first esports campus to Philadelphia in 2021. Since then we have partnered with Nerd Street Gamers on programming and connected them with the School District of Philadelphia to explore potential afterschool activities. We are also committed to supporting and growing the third annual PHL Gaming Conference scheduled for September 2025, which will be a key opportunity to showcase the City's leadership in that space. Technology is one of the Commerce Department's five priority industries. We support Philadelphia's tech ecosystem through business development attraction and retention. Our role is to serve as a liaison for businesses looking to invest and expand in Philadelphia. For example, we proactively connect startups and growth stage businesses to capital readiness programs, investors and accelerators. In addition, we facilitate quarterly tech talks -- the next one is February 12th -- to foster cross-industry learning and collaboration. We would be happy to host a dedicated gaming tech talk to support industry leaders and aspiring professionals, engage with the latest trends, challenges and opportunities in that space. Philadelphia is home to a wealth of academic institutions, workforce programs and boot camps, all of which provide multiple pathways into this industry to quality jobs. In the gaming subsector, software development jobs continue to represent a significant portion of vacant tech positions. Many of the roles do not require a college degree, but some do require specialized skills that can be gained through alternative pathways such as boot camps or self-taught programming. To further assess and support the growth of the gaming sector, Commerce recently commissioned an economic study of our own, which will provide a detailed landscape analysis and outline how the City should invest and take the sector to the next level. The data confirms what we already know. Philadelphia is currently underinvesting in this space, which is limiting our ability to fully capitalize on the opportunities available. With the right investments, Philadelphia can be the most diverse hub in the region. However, we cannot achieve this alone. We need strong public and private sector collaboration and investment to make this vision a reality. We look forward to working alongside our partners to support the continued growth in this sector. Thank you for the opportunity to testify today and I am happy to answer any questions you may have.
Thank you. We are going to allow the entire first panel to go. Khenan, all right, so you're after Nicodemus. Then you'll provide your testimony and then after this entire first panel all three of you, then I'll open it up for questions. Nicodemus.
I'm sorry. Nicodemus, hold on. For the record, I would like to acknowledge the fact that our 5th District Councilperson, Councilmember Jeffrey Jay Young has joined us. Nicodemus, please state your name for the record and you can proceed with your testimony.
Hi, everyone. Thank you. My name is Nicodemus Madehdou. I am the CEO and co-founder of Jump Button Studio, a games and animation company crafting experiences that are fun to play at home and away from home. I'm also privileged to be a partner and member of the PHL Gaming and Tech Task Force here in the city of Philadelphia. years ago I first 19 discovered the world of games. I never imagined I would be standing here with City Council working towards vital initiatives that not only empower an industry that saves lives every year but entertains billions around the world. This is an industry that has grown to be economically bigger than movies and music combined. One that can inject --
This is an industry that has grown to be economically bigger than movies and music combined. One that can inject at minimum 80 million into a local economy and if fostered and empowered efficiently, over $1 billion into our local economy that currently is being missed. We are all here today for a very important impact. When our city succeeds so does its residents, students and workforce. We are the experts and leaders shaping this local future presently and together, with unwavering support of City Councilmember At-large Isaiah Thomas, his Chief of Staff Dom Miller, thank you. We want those gathered here today to take away one thing: Philadelphia is positioned to be a premier destination for gaming careers and economic growth within this decade should the proper support from our home city be provided to scale this workforce sector. Now, experience. Who am I to be telling you what should be considered or be done within the city to empower new revenue, growth and retention. While my career is still very young, I've managed to accomplish something generations of my family never have through an industry I love, not because of financial opportunity but because of social barriers and positive impact it's made on me personally. I immigrated to the United States from Monrovia, Liberia and started my journey on Walsh Road in 2004. Imagine a young 8-year-old kid turning in a 6 new environment with absolutely no 7 friends, no knowledge of how to fit 8 in outside of my home and 9 struggling to have intentional conversations out of fear of being judged. Once I learned about computers I found myself browsing the internet and it did not take long to find games. My world shifted instantly. I made my first friend through playing games and they happened to live right nearby in the Walsh Road Apartments where I was living. This was my cheat code. I spent the years that followed consuming the space and eventually building in the space at the start of high school, gained recognition twice at the White House during the Obama presidency, received several local awards such as the Philadelphia Geek Awards, Billy Penn's Who's Next in STEM, 40 under 40 by the Knight Foundation, Forbes Fellow and more, all while bootstrapping our games company to over million in revenue and now working towards closing our 3 million funding round. That's over 5 million by the age of 28 that I've been privileged to empower so many developers and future leaders in our space with. No one in my family has ever been positioned to start and attempt growing a business to that scale that my team and I have managed to accomplish, and this is all thanks to the games industry. We've worked with industry leaders across Niantic, the company beyond PokemonGO, Disney, Paramount, Rovio and the list goes on, all of whom are also industry leaders dominating our space across the country and empowering their headquartered cities with millions to billions in economic revenue through games. Today your experts, capable of enabling the same growth for our city, are taking the stand and sharing now more than ever what our city needs to empower this sector intentionally so that we can help bring more dollars, excitement and residents to our city in all the right ways while mitigating the least amount of risk because we've seen success over and over again, and know just how much and what to avoid. So missed opportunity: Montreal's game industry contributes over 2 billion annually to its local economy. California's gaming sector generates over 50 billion in revenue while empowering over 215,000 local jobs. San Francisco injects over 80 million annually simply through gaming events alone. I could keep going, but I believe our economic point here is clear. Philadelphia is capable of capturing this opportunity for economic growth while presenting thousands of new jobs, opportunities.
This leads to stronger retention of our competitive talents graduating from Drexel, which you can find on 4, we're losing over 60 percent of our talent. We could keep a lot more. Philadelphia is capable of capturing its economic growth. This leads to stronger retention of our competitive talents which has one of the -- Drexel has one of the top 10 gaming education programs in the country. As of today, 60 percent of those are leaving. The City does not have enough legislative and financial resources directly tailored for growing the games industry within tech to enable the possibility of growing to capture similar annual dollars here in Philadelphia. And our Task Force through Councilmember At-large Isaiah Thomas is primed to ensure, should you all listen to us here today, our city too can begin to grow a sustainable games industry in Philadelphia that many other cities will one day adopt because we are fortunate enough to have experts at our doorsteps. At minimum, we can most definitely surpass San Francisco's 8 million, as Philadelphia is much bigger. Philadelphia's larger size and lower population density offers more opportunities for expansion and development, including spaces for game studios, esports arenas and tech hubs. And the lower population density also positions a leverage where we can attract more talents and companies seeking affordability. So in conclusion, it's time for change. Next year we celebrate a massive milestone within the city and it will miss on multi-billions of dollars that could have been enabled had we already empowered the games industry before now. Let's make sure we don't miss that opportunity next time. Thank you all for being present here today. Collectively we, Jump Button, PHL Gaming and the Task Force in partnership with Councilmember At-large Isaiah Thomas are ready to ensure our city captures a portion of the gaming industry that's expected to grow to 470 billion by 2030 with a compound annual growth rate between to 4 percent. 5 Its current size as of 6 2023 is 220 billion, an industry 7 that grew to be bigger than movies 8 and music combined despite being 9 late in the game historically. 10 There's a real opportunity here and the city should take it seriously. Thank you.
Thank you. Before we open it up for questions for this first panel, we're going to allow Mr. Keenan Newton to provide testimony and then after Mr. Newton provides his testimony, we'll open it up for questions for members of the Committee for this particular panel. Mr. Newton.
Hey. Good afternoon, everybody. My name is Khenan Newton and --
Yeah. No 11 problem. I'm the Executive Director of the Philly Game Mechanics. Thank you, Councilmember Thomas and the members of the Council for your time today. I am a gameplay programmer with five years experience in the industry. I've released two games on Steam and that's the world's largest video game marketplace, online video game marketplace. And I've reached over 30,000 players with these games with the help of small- and mediumsized content creators, and I've led teams of over developers on more than a dozen game projects. And since 2022 I've served as the Executive Director of Philly Game Mechanics. And Philly Game Mechanics is a project of Culture Trust Greater Philadelphia, which is a 501(c)(3) charitable trust. We support game developers in the Philadelphia region through grants, networking events, skill-building activities and business programs, and our regular events include Play Test Night, where developers will bring prototypes and demos for live feedback. December 12, 2024 was our 20th event of 2024 with over 40 attendees, that we get just about each session. And in 2024 alone we've seen 30 games come out of our community, adding to about the 130 games we've developed over our 12-year history. Just to give you an idea of what exactly comes out of our community, so several games found success. So we have SNAKE FARM by Heather Flowers with over 14,000 units sold on Steam. We got SWORDCAR by Space Microscope boasting 86 very positive reviews on Steam, Timeworks by Starworks Studios with 51 very positive reviews on Steam, and Scattered Verse by Tony (inaudible), which is a mobile title with a 5 out of 5 score on Pocket Gamer. So despite these successes, most games made from within our community, say like 4 out of 130, they'll never see or achieve this commercial traction. Why? A lot of our developers often lack the time and resources to create projects ready for publishers or investors, and that's a big part of game success, is finding those publishers and investors. While we excel in art and technology, many of us need more support when it comes to marketing, design and business development. Those are all critical components of success. So the Philly Game Mechanics, we're currently run entirely by volunteers and we don't have the capacity to provide mentorship in these areas. To grow, we need a full- time program director who can establish programs to connect developers with the resources they need. So with more targeted investments and grant opportunities for communities like ours, Philly Game Mechanics will be able to hire full-time staff to launch a learn- build-launch pipeline. Let's see, this would be our effort to emphasize learning by providing a directory for game business literature building impactful projects and consistently bringing games to market. And finally, we would benefit from yearly grant programs targeted directly toward game developers so our developers could work on their own time and hire contractors to create investor- ready demos. So in closing, these investments would not only strengthen our community but also help position Philadelphia as a hub for creative and innovative game development. So thank you for your consideration and support. Also, I have like another little extra excerpt to give you some more statistics on how government intervention has helped game studios bring revenue to cities. So in 2022, the NYC Mayor's Office of Media & Entertainment introduced a Made In New York marketing credit for digital games, which awarded grants for local indie studios. For example, during the 2022 Game Devs --
Sorry. Is that something that's referenced in the report? The recommendation you're reading right now, is that referenced in the report?
So in 2022, the NYC -- yeah. So the 2022 Game Devs of Color Expo, five grant recipients collectively receive more than 90,000 in funding providing a crucial support for their development projects, and that's sourced from Welcome to NYC.gov. And another example would be Iron Galaxy Studios, which is one of the biggest indie studios in North America. They benefited from the support of the Orlando city government during the relocation to Downtown Orlando a few years ago. So in 2022, the city of Orlando's Commercial and Residential Building Agency, the CRA, approved a package of actions to support the relocation of Iron Galaxy Studios to Downtown Orlando, including the public transportation incentive and downtown living incentive. And Iron Galaxy Orlando, LLC is a development studio that helps other game developers create their games through services -- through their services division, and they also create their own original games from time to time, and Iron Galaxy Orlando, LLC was approved for up to 135,000 in funding assistance to create 90 new high-value jobs over five years. So in conclusion, there are numerous other examples of indie studios in the U.S. and other parts of North America being established and being able to grow thanks to support from local governments. The organizers of Philly Game Mechanics and (inaudible), we'd be happy to share other examples with the Philadelphia Council if requested.
Thank you. We appreciate it. A couple questions. So first, Ms. Carter, thank you for being here. Thank you for representing the Administration. Are there any other members of the Administration that's joined us for this hearing today, do you know? Are you by yourself?
I am not by myself. The Senior Director of Life Sciences who also oversees my work directly, Dr. Rebecca Grant, is here as well.
Awesome. So the reason I asked that is because I had an opportunity to speak with the Mayor briefly about gaming and the gaming industry. I had a conversation with her directly and I really wanted to push the Admin to understand where we are as it relates to the unique opportunity we have to court gaming to the city of Philadelphia. Nicodemus, who's my tutor, he had a couple stats and some data that I thought was really important. Nicodemus, can you just on the numbers side, so you said something that I asked you to repeat and I'm going to ask you to kind of go a little more indepth right now. And if it's okay with you, Ms. Carter, I would like to hear from the Admin as it relates to your appetite. So, Nicodemus, you spoke specifically about music and movies. Are those the two industries you talked about?
And he talked about three different areas. You talked about Montreal, you talked about the state of California and you talked specifically about events in San Francisco. So if you could just elaborate specifically around numbers. What do we know about music and movies compared to gaming? And then what do we know about events in San Francisco, anything that can be replicated? And then of course for you, Ms. Carter, if we can hear the Administration's appetite for us to replicate some of this stuff, that would be definitely beneficial. Nicodemus.
I mean, I'm thinking about Councilmember Young, right. I got to get his vote. So there's one thing for us to say that one industry is more lucrative than the other, but this guy's a lawyer. He wants proof, so help us out a little bit. And then I got another lawyer to my right. I'm struggling right now.
Definitely, definitely. Montreal, they contribute over 2 billion annually to their local economy through gaming.
Montreal is what we would probably consider a city that's a gaming city right now, right?
California, their gaming sector generates over 50 billion in revenue while employing over 215,000 local residents in gaming, 50 billion. And San Francisco, through events alone, generates over 80 million annually through gaming.
What type of events do they do in San Francisco? Is there anything similar to what we do with the conference?
It's very similar, very similar. We have out there -- they have a lot of tech- related events that bleeds into gaming. You have your A16Z, big investment firm out there that host -- they have their similar San Francisco Tech Week similar to what we have here, Philly Tech Week, only because they have a lot of gaming-involved components. They are able to generate a lot more than our Philly Tech Week I'd imagine generates for our city. So if we were able to empower a lot more gaming activations within our "Philly Tech Week," I imagine it is very possible we're able to meet the same 80 million annually to bring it to our city locally with the right support, at minimum.
-- California, not the events. When you talked about California and the revenue with a B and the number of jobs, why would a business be incentivized -- like the cost of living in California is so high, right, and California is clearly not as transit as some of our East Coast cities. We're talking a lot about SEPTA, public transportation, people being able to walk places. Why would a person like yourself be in California instead of being in Philadelphia?
Because Philadelphia does not support our ecosystem the right way. I believe one of the hearings you'll hear later will be one of our leaders here in the city with a game company that had to start their journey by leaving the city because they couldn't find the right opportunities here. So if we are unable, similar to the 40 percent on in the report, that we're losing to the students that are graduating from Drexel because they don't have, one, job opportunities that want to keep them local or, two, good-paying job opportunities or, three, city-incentivized and support legislation that empowers the companies that are locally here within that sector to want to remain and empower more job opportunities. So none of those things exist here in Philadelphia whereas California they've seen the lucrative wins of the gaming industry, so it is more favored and they have all of those structures there that empower that.
I have more of a question. I'll wait until you finish, Councilmember.
So what does the gaming infrastructure look like, right? What is necessary for us to build out, to fit out spaces and places where the gaming industry can thrive here in Philly? So you're looking at what -- I guess I had this question for the Drexel professor as well. If you look at what San Francisco is, as you mentioned, we're a much larger, denser city but it has all the resources that are necessary, what are we missing here in Philadelphia for that gaming infrastructure to really thrive?
And when you answer my last question, you referenced of the report. When you answer Councilmember Young's question, please continue and other panelists continue to reference the report. All of the information is here for members. So as you answer if there's a reference point that happens to be in the report, please include that in response.
Definitely, definitely. of the report will give you a glimpse into why we believe gaming is prime and capable of being grown in our city, whereas what other cities are doing, Nick Madonna, another individual that'll be speaking here, has a lot of thoughts towards the tax incentives, right, that empower the job opportunities that are offered to the people that are hired, the offerings of financial investments, mentorship, et cetera, all of those things are more lucrative out West essentially and they are provided and empowered by the city too in addition to the firms and companies that are fueling the gaming economy financially. So when we look at Philadelphia, we're missing legislative action, right, that empowers tax incentives and other hiring benefits and funding, a lot of funding.
Why do you think those investments are being made out West versus here in Philly outside of the tax incentives, right? I mean, a city like Philadelphia, an East Coast city, as Councilmember Thomas was saying we have everything that any corporation, any business, any investor could need here in Philadelphia. So is it the weather in San Francisco? Like, what is it that makes that more popular than --
Their city understands the importance of gaming. That's the difference. Their city understands the importance of gaming and they empower it. That's what's missing here.
I think also from an investment standpoint when you're looking at various types of investment, it's a center for venture capital so there are no 4 gaps in terms of what can be invested upon and it's very easy to kind of tap into those networks out West, particularly in the Bay Area in San Francisco. So when we partnered with Pegasus Tech Ventures, which is a venture capital firm that has over $1.6 billion out in investment, they're based in San Francisco. And the finale of that start of World Cup happened in San Francisco. There's just a lot of money there on top of over 60 years of investment, both in creating the infrastructure but also from their anchor institutions with their colleges and universities to kind of support tech in general and gaming in particular. And so, we're burgeoning and we're building that, but there's still some gaps particularly when we look at investment for those not raising their first $5,000, $10,000 but are looking for million, 30 million, 8 their first 10, their first 5. 9 It's like a death valley 10 here. And so, being able to 11 attract more investment into the 12 city is pivotal and we can do that 13 through a host of different ways. 14 When you look at Ohio, when you 15 look at New York, when you look at 16 Chicago, they have their own kind 17 of venture funds set up and venture 18 studios set up within the city and 19 sometimes brokered by the city or 20 state to help to invest in those startup companies and we don't have that currently in the same way as you would see in California and other places.
Those funds that you mentioned, are they publicly-run funds essentially?
Often times they're private. So you will have investors coming in, whether they're angel investors or sometimes these places aren't --
They haven't had IPO yet so they're not on the stock market sometimes.
Yeah. I think we're in a catch 16 situation though because if we say, 17 well, we want to wait for the 18 private sector to be able to come 19 up with the appetite and the money 20 to be able to provide the 21 philanthropy dollars that you're 22 mentioning, then we're going to be waiting a long time, because out of the top 10 employers in the city of Philadelphia, only one is in the private sector.
So we're struggling for reasons that don't necessarily relate to this conversation to get that type of appetite for any type of venture capitalist in the philanthropy community. And so, I think for us we want to know, and I guess this leads to my question for you, what do you think -- and I know you're limited in what you can respond with -- but listening to all of the things that's been discussed thus far and we're going to go indepth into more dialogue as it relates to the next two panels, what do you think the Admin has an appetite based on what you've heard thus far as well as what is in the report, specifically recommendations for what local government can do?
Right. So the Administration and Commerce in particular, they are deeply interested in making sure that we're able to retain talent and that we're able to partner and create more private and public collaboration so that we're able to platform this city in a way that will attract those dollars that we need, right. And so, being able to kind of work together to make sure that the PHL Gaming, the third one that happens in September is even larger, that were able to create more kind of inroads and collaboration when you are engaging with these smaller startup companies that were able to have larger conversations about the incentives that we do have, right. Things that aren't talked about right now is quality jobs. The quality jobs program which is incredible and gives $5,000 for new jobs that are life-sustaining, so if you have a company that's growing from to 15, you can 6 really get dollars that are 7 unrestricted that are going to be able to help you grow, and then we're also doing an incentive study on top of the tech industry study that I'm doing that'll be public in the next few weeks that'll tell what exactly we'll be able to do in terms of recommendations. But I think that we're on the right step, right track in terms of more collaboration between us making sure that we're getting these anchor institutions to kind of understand and put more kind of skin in the game and then looking to see what incentives are working and what incentives aren't so that we're able to create an incentive package to be more attractive as a city.
So I love to hear the appetite and I'm going to recognize Councilmember Mark Squilla who's joined us for today's conversation. Just a couple more things that I think we can do that's outside of the report. We're going to continue to examine things in the report on the next panel. We're going to ask for that to be a part of the conversation. We actually spoke with the folks at the Library Foundation, and we're hoping and of course we're not going to ask you to answer this right now, we're hoping that we can work with the Admin, the Library Foundation, the Director of the Library to begin to see what a partnership could look like to provide gaming spaces in our libraries. Our libraries are unique spaces. On our next panel we're going to talk about some of the professions that's in the gaming industry, because again I can play a little 2K and a little Madden but that's where it stops for me, and I'm sure most folks are limited like I am as it relates to understanding the professions in the gaming industry. But I think a lot of people when we think about gaming, we think about the act of playing a video game which could fit at a rec center or something like that. But if I'm a programmer, if I'm a developer, if I'm a professional in the gaming industry, I probably would rather be in a library than a rec center, right. I probably need more quiet than chaos. So I'm wondering for a little bit of homework we can see if the Admin would entertain or have an appetite for collaborating with the Library Foundation as well as the library to provide more tools, programs, resources and initiatives in our libraries so that our libraries can become a gaming hub for young people in neighborhoods across the city of Philadelphia. That's one thing. You mentioned the gaming conference. That's the next thing. The third thing if we do get to the point where we entertain the idea of a big developmental project, folks are talking about East Market Street in South Philadelphia. If those things happen, we would ask that the Admin include some of that stuff in -- I mean, include gaming in some of those negotiations because gaming can be that experience that changes a corridor, right. It's one thing to say that I want to have a retail. Retail is great, right. I'm not going to never knock retail. But I know for me I like to spend my money on an experience, right. And what the gaming industry often offers is a specific unique experience and I think that's what we should be thinking about as we continue the innovative thinking that the Admin has led since our Mayor has been sworn in. That's the type of push we want to see to try to make gaming a priority. The Chair recognizes Councilmember Squilla and then we're going to try to move on to the next panel.
Thank you very much, Mr. Chairman. And you actually took the words out of my mouth because I was even thinking of the Wanamaker building and reimagining that and looking at spaces, that we could say is there an opportunity if we build it, they will come, right. Is there an area we're saying who would want to rent a space like this or I remember when in South Philly they were talking about maybe a 2500; 5,000 seat arena for gaming three or four years ago or five years ago and then somehow that fell off the radar. But I think that's something if it's a possibility to get a venue just for those type of events but only if we have enough people that are in the city interested in doing that. And I guess at some point somebody thought I guess it wasn't profitable or whatever the reason was it didn't happen, but if we re-envision East Market or South Philly or some of these other places, is it possible to connect them with people who would be willing to lease spaces that had this type of setup in there? And if we did, we could even help market that, right, as a city and saying, all right, there's a need, right. And if we build it, they will come and we'll be able to fill these spaces, because the worst possible thing is I remember we did this with some of our other buildings and we were building out life science buildings and then we weren't able to fill any of them, right, so it became a challenge. But if we were able to build out some of these spaces here and say, all right, by working with you guys, working with the Chairman and the Mayor's office, say let's look to build these out and let's make sure that we could have the ability to do that so that we could attract you guys and other people in the business to come there and say we're going to rent these, we're going to use these places and then it becomes a hub, right. And that's what I think we need to do. And I think thinking outside the box and being creative about it is something we as a city could do as we continue our planning process.
I know the Commerce Department is committed to exploring and figuring out how we can better attract and retain and grow tech in all its spheres including gaming, so I'm really excited to see. I look at this as kind of a springboard for us to jump into deeper collaboration, right, utilizing this report, utilizing the report that will come out in a few weeks around tech in a more broad sense and figuring out what we can do together to make sure that we have a thriving innovation hub within the city. And we do have EDA designation as a tech hub, so how do we utilize that to be able to draw more light into what is happening in gaming and what's happening in various other sectors within tech. I think that is going to take creativity and work, but I think that we can do it and I'm excited for us to be on that partnership together.
And if I may, I believe COVID impacted some of those arena gaming plans. And Pages 12 through 17 in the gaming report also dives in so much more detail around ways in which the city can collaborate with existing experts here to more empower, bring in at minimum 80 million into the local economy and high billion or more into the local economy.
Thank you. As we close this panel out, I want to thank you both. I want to ask you if there's anything else you want to add. Nicodemus, I think you blew a lot of us away when you talked about the fact that the gaming industry is more than a music and movie industry combined. That creates the appetite for local government to do our due diligence to attack this. But as we close out, if there's anything you want to add, specifically any highlights in the report that you didn't get to discuss that you might want to put out there and anything around tax credits as well too. I think it'll be good for the members of Council to hear about recommendations around tax credits and then we can get ready for the next panel. Thank you both.
Thank you. From the Commerce perspective without Revenue being here and being able to have like a full proposal, we wouldn't be able to condone any tax credit. But I am really interested in what broader incentives we'll be able to create maybe together that go beyond the tax credit issue and maybe more into generative grants and larger kind of fiscal investment. And so, I'm really excited about that. And when I look at the sort of investments that we need to make, I look at the median tech income in Philadelphia which is right now at 109,000. It can go up to 141,000 depending on whether it's research and development. And I think that that is revolutionary when we're talking about our most marginalized communities getting access to that type of lifesustaining wage, we see the fruit of what gaming and what tech can do in the city can make millionaires out of our neighborhood residents. And so, I'm very interested and very committed to figuring out the ways in which we can kind of grow that pie so that we're able to equitably distribute it more.
Thank you and thank you to the Admin for representing the Mayor. Thank you.
My colleagues will definitely speak much better than I can on a lot of direct city support. I've said a lot of what I had to say, but thank you especially Councilmember At-large Isaiah Thomas for spearheading and being committed to the PHL Gaming Task Force and the events we have done to be able to put together this report and be very authentic and true to what and how we can impact Philadelphia locally.
-- and if you can stay around and listen to the other panels so we can figure out how we can work with the Admin, turn some of this stuff into action items.
Mr. Maynard, will you please call the members of the next panel to testify before us.
Of course, Mr. Chair. The Committee will now hear from Professor Robert Lloyd and Adrian Sandoval. Gentlemen, if you'll make your way to the podium. (Witnesses approached Witness table.)
Good afternoon to you both. Thank you for taking the time for being here. Thank you for being patient. We appreciate your patience. Please begin by stating your name for the record and you can begin with your testimony. We'll allow you both to testify. And then after you both finish your testimony one after the other consecutively, we'll open it up for questions from members of the Committee. Thank you both.
Excellent. My name is Robert Lloyd, Professor at Drexel University.
My name is Adrian Sandoval. I'm an Adjunct Professor from Drexel University and also the Chair of the Philadelphia Chapter of the International Game Developers Association.
So I have graphics that I believe you have printouts of that will have additional information to accompany my testimony. But first, I want to thank Councilmember Thomas, his Chief of Staff Dom Miller and the Council for giving us this opportunity today. My name is Rob Lloyd. I started at Temple University as a studio artist and joined a local simulation company, creating a variety of training and simulation projects, including the award- winning Wild Earth at the Philadelphia Zoo and the NASTAR Training Center in Southampton, Pa which is train civilian and military pilots plus hundreds of people preparing to go to suborbital flights with Virgin Galactic and others. I joined the faculty at Drexel a decade ago and have since become a Program Director for the Game, Design and Production program or GDAP as I'll refer to it, the undergraduate degree program which is what brings me here today. D. 19 programs. You can be a doctor of 20 digital media with Drexel. 21 This year we will 22 graduate our 25th class, including 23 about 40 game majors. With their 24 partners from music industry programs, custom design major and computer science, the seven current senior game teams represent about 75 graduating students looking to enter the game development industry. The Game program currently has about 200 majors, plus a new minor that we've opened and hundreds of computer science majors that are taking game-related concentrations. It's a lot of students studying game development. The Drexel Game Design program is ranked by Princeton Review as a top game design program in the nation. We've been consistently in the top group from when there were only a few, a handful of digital content creation degree programs in the nation to now when there are hundreds, and I'm very proud of that consistency. Our cohort continues to grow and evolve, and there's demographics on the slide graphic. While not yet a mirror of society, we are trending in the right direction with increased gender, racial, ethnic and neurodiversity. This diversity of voices is important for many reasons. But for today, I want to point to how that diversity feeds the indie game dev scene and with countless untold stories that make the indie art scene so vital and vibrant. Our students come from all over the globe, but about 40 percent of them come from the state of Pennsylvania, and most of them within the immediate region. However, over half of them leave the state of Pennsylvania upon graduation and you heard in the report has the larger number of 60 percent leave the city of Philadelphia. They leave the state, they leave the city to find work and build their careers elsewhere. And I think this Council can help change that, and this report and this effort is the beginning of it. Together we can improve the business environment to support more game dev and related companies growing in the area, providing more game dev opportunities for students in Drexel's 100-year-old cooperative education program, providing more opportunities for graduates to stay in the area working for a more robust local game dev industry. Our students work for small indies companies, mid-sized companies all the way up to major AAA studios and Fortune 500 companies. Beyond a couple of small indies in Philadelphia and other limited opportunities in the region, the vast majority of those companies and opportunities for our cooperative education students as well as our graduates are elsewhere. Our students have started companies, some of them incredibly successful, but the most successful have started them elsewhere. Greg Lobanov graduated from digital media before the game program was specifically branched off. He graduated in 2014. He is a Philadelphia native. He has his company based in Vancouver, Canada.
His titles are critical and commercial successes and his latest title, Beasty Ball, even calls back to the Philadelphia sports scene and he has a character based on Gritty who PhiladelphiaVoice just had an article on him. Recently Dan Fornace, a digital media graduate from 2011, has grown his Rivals of Aether game into a franchise with multiple titles under that franchise and an exciting esports scene attached to it. We've actually held esports tournaments at Drexel using his titles. His company is based in Seattle, Washington. Drexel has an on-campus incubator, the Entrepreneurial Game Studio or EGS. Over the last decade with limited funding and resources, our Game faculty, Dr. Frank Lee and Tony Rowe have helped launch a dozen or so student companies representing over 50 students and a dozen or two commercial titles available on a variety of commercial marketplaces. Some of those will be represented in testimony later today. While startups are inherently risky, only about three of those studios have persisted past graduation. The learning experience of that startup is invaluable no matter what. I believe this Council, this effort, this report is the beginning of increasing the success rate of those locally EGS-launched companies. Many game developers from industry have come to Philadelphia for family connections, cost of living and quality of life. I'm constantly running into new people who have come here for those reasons, to bring their industry here. These are factors that are not easily created out of thin air. Philadelphia has proudly built them up over time. With additional support from this Council, from this effort, we can jumpstart and support the growth of the existing indie game development community that's already here into a healthier, sustainable, profitable and noteworthy industry. Importantly, most indie game companies survive through a combination of their own original intellectual property, their own original titles that they build, predominantly they're keeping their lights on through contract work and grant work. That original IP is an iterative, experimental, tricky process. The ideas may not make it past that initial stage. Yet they still need to be funded to keep the lights on. Philadelphia talent from companies that can't keep the lights on find other solutions, from grad school to full-time work in game studios or other work usually out of state. At the 2024 -- and this is where the graphics attached to my testimony are important particularly. At the 2024 Game Developers Conference, GDC '24 in San Francisco, I attended a presentation by Latoya Peterson who made the gap between funding models for games and film very clear to me. The limited, mostly self-funded, ways to get a game made pale in comparison to the many ways a film might be funded, especially smaller indie-based productions. And on the graphic, you'll see that it covers personal savings, friends and family, crowdfunding, angel investors and institutional investors. Only two of those are really serious sources of funding. However, on the next graphic on the next page you'll see a wide variety, almost illegible depending on how large the print is you have, of the many ways that films can be funded. With the current mammoth scale of AAA consolidation within game development making huge publishers even larger and therefore less risk averse, there is an opportunity for smaller studios to create more inventive, more risky, more personal content to appeal to a wide variety of underrepresented audiences. Funding for those projects can reflect the same variety of sources already used for smaller films. And this you'll see listed in the report as one of the many ideas that the taskforce put together of looking for existing art funding mechanisms and making sure that they are open to and receptive to game companies getting that same art-based funding.
I think there are new things that we can build from scratch, but I think there are existing systems that game development can be included into. The following -- the last few slides, graphics that you'll have, show a variety of directional- related student-nurtured companies from the EGS incubator. There is vast potential that student-based teams, there are a multiple of them, but they are only part of the vast potential in the Philadelphia region for new companies to create new stories for a global audience. I'll touch on a couple of those briefly, and though some of them will be again represented by their own testimony later, these are some of the latest releases in this one graphic showing Star Hound, Jubilite, Trouble and Tornado Time, Timeworks Lockjaw and Bones, these are releases from EGS teams just from the last year or so. In fact, one team, Starwork Studios is not here to testify today because they're at Super Magfest in the Maryland area in the National Harbor of Maryland sharing their game with a wider community through that Super Magfest conference, an exhibition. They're a current senior team. They're actually excused from class today to go and participate in that conference and showcase their senior project. Drexel SplitSide Games, who will be represented again later in a moment, with their award- winning title Fling to the Finish, this started as a four-week in-class project within the classroom. They took it to EGS to develop it further, and then in pursuit of a publisher, continued to work on it as their capstone senior project. Ryan can elaborate further, but their four years of effort before it took them to get to a publisher deal. And while this continues to be developed, the team has had to find alternate paths to make a living, at least for now. But that's a company that is on the cusp of having great success. Without further support, it won't have that further success. The last one I have to show is Drexel's Pharaoh Hound Studios And their award-winning title Sons of Raw at the last E3 before that conference was shut down years ago in response to COVID. As events like E3 shift and disappear, student teams like this who won their last college game competition in 2019, there is a call for new methods for highlighting and jumpstarting new game dev companies to keep these industries growing and with the high potential of all the small- to medium-sized indie studios that can really bring innovative content out into the world. So in closing, I want to thank again Councilmember Isaiah Thomas and his Chief of Staff Dom Miller and the entire PHL Gaming Task Force for this opportunity, for all the effort that's gone into this report. And I just want to close by saying that with enhanced access to existing arts-related- funding mechanisms, city-fostered B2B connections and evolving funding models closer to the multifaceted indie film development model, the City of Philadelphia can help create a game development hub that the world will pay attention to. Thank you for your time.
So as mentioned, my name is Adrian Sandoval. I'm the Chair of the Philadelphia Chapter of the International Game Developers Association. I've been the chair for that chapter since 2016. However, I have been involved in the community and part of the IGDA chapter since 2007 at the earliest. I'm currently an Adjunct Professor of Game Design and History at Drexel University. I'm also an active game developer myself having been working in games in the Philadelphia region for nearly 15 years now. 16 I consider myself 17 fortunate to have been part of such 18 an active and vibrant community for 19 as long as I have, but I've been 20 frustrated in that time frame as well and I want to talk briefly about those frustrations today. I'm frustrated because despite the large number of talented artists and incredible games developed in our city year after year, a lot of which were mentioned by Rob here and also many more even before that, the community of Philadelphia is largely unknown in the wider games industry. It is sort of a running joke and has been a running joke for a decade or more now that any time any of us go out of state, any of my colleagues in the developer community, we're told by other people that we talk to, oh, we didn't know they made games in Philadelphia. I've heard that time and time again over the years. This lack of visibility is not just a funny anecdote however. I think it is a symptom of a larger problem, that our community has been underserved and unable to gain a foothold within the larger games industry despite having the same level of talent and expertise as the other major tech and gaming hubs within the United States. I'm frustrated because across two decades I've watched promising studios with successful first-time game launches having to close their doors a couple of years later. They're unable to find adequate funding or support to keep their studio afloat and healthy despite initial critical and financial success. Rob mentioned a couple of great examples. I can point to a couple of others. Cipher Prime Studios, Final Form Games existed for maybe a year or two, some getting one or two titles out the door that again critical on financial success but just not able to get over that hump to continue that success. And I think that speaks to the difficulty of being able to maintain a sustainable place of business within our city. The handful of studios that are currently open struggle to cover the operating costs necessary to be able to sustain themselves to their next contract, provided they can find one, let alone be able to grow their business and hire new talent for bigger projects. Meanwhile veteran talent cultivate here, then leave for opportunities elsewhere in the United States or abroad. I'm frustrated that while many schools such as my institution, which Rob spoke to within our community, teach and nurture hundreds of future game developers or many studio institutions outside of Drexel that are also teaching game development as well here, but the students there are then forced to find entry-level jobs or unpaid internships on the West Coast because of lack of opportunity or mentorship in this area. This to me is a great disservice to our students. They take a great risk even when they find the rare paid opportunity within the larger tech hubs because the cost of living is so high and the future is uncertain. For our city the lack of both new and veteran talent also represents a huge cultural loss. This is the next generation of artists, engineers and entrepreneurs. They should be able to find stable work while at the same time showcasing their unique voice within that work. Our city is known for its breadth and diversity of its art and its culture, and games are just another vector for that as well. And it's necessary that it's cultivated as such. In order to do that, we need to be able to maintain both our current and future talent. People often say games are our future.
As a historian, I think this is a misnomer. I think the fact is our games are our present and they have been for decades. They've been a vibrant culture for over 40 years now with billions of players from all walks of life now actively playing games. As a market, I think there have been challenges in recent years. But one thing is certain, games are not going away. So my goal as the Chair of our IGDA chapter has been twofold: One, to give Philly a larger voice within the global games industry and, two, to build a better and more sustainable path for current and future game developers in this area. I believe the report and many of the items that have been brought up by the previous panel and by Rob are the first steps towards addressing these longstanding issues. I'm very proud to have been a part of it. Thank you.
Thank you. A couple questions. Try to be as brief as possible on your responses so we can get as many questions in as possible. A person graduates -- first of all, thank you for what you do as educators and thought leaders in the city of Philadelphia. A person graduates from Drexel with a degree. You mentioned an entry-level job. Based on the testimony that's been provided today, anywhere from 54 to 60 percent of the students who graduate from Drexel leave Philadelphia which is terrible, but you said they're going to another business for entry-level jobs. There are so many people who do not understand the employment hierarchy within the gaming community, right. So if I was a educator and I was going to an entry-level job, I might start off as a substitute teacher or a student teacher. Then I become a full-time teacher. Then I become an administrator. Then I become a principal. Then I'm trying to be -- so you get the hierarchy. And I'm not necessarily saying it works unilaterally that way in the gaming industry. But help people who have no idea -- because whenever I talk about gaming, the first thing people think I'm talking about is sports betting- type gaming. Then I say, oh, no, not that type of gaming, esports. Oh, so the kids who play the video games? No, no, it's more than just a kid sitting on a Playstation or Xbox playing video games. So for those people who only know that side of gaming, talk a little bit about what those entry-level jobs are, how much they pay and where can you ascend to as you get more entrenched in the gaming profession.
I'll do my best to respond to that. Game development is a multifaceted effort. It takes a wide variety of skills. And so, Drexel is a generalist to specialist program. We take in students and introduce them to all facets of game development. And so, you're talking about audio writing, lighting, cinematography. You're talking about 3D modeling, animating, creating the bones of the rig, the skeleton of that character that you can then animate it from. There are the encounters themselves. I believe Khenan earlier testified he is a gameplay engineer. He is someone who creates the rules --
All right. So this is what we need you to do. Act like we're your students but not the smart ones. All right. Take a couple steps back, slow down a little bit. I understand what you're saying and the two lawyers up here might understand what you're saying as well too. But this conversation is for the greater good of the entire city. So someone's going to watch this on YouTube in a week or two and they have no idea about the gaming industry, but Councilman Thomas told them to watch the hearing to get a better understanding. So if you could just slow down and just start all over again so everybody can understand, and also speak a little more into the mic as well too.
When I speak to high school students who come and visit and during openhouse, I introduce them to a couple different things, and I can share this with you later. But there's a great designer out of Montreal actually, used to work at Ubisoft, that at cocktail parties would have to explain what they do. And they were a game designer, so they would explain to the concept of a door and what a game designer, how they thought about a door and how you would decide whether a door needed to be in the game or not. And then the person who was doing the concept art would draw different styles of door. And then somebody who would be an art director would pick one of those styles and then a 3D modeler would create that door. All of these things are just taking simple objects and trying to figure out the many roles it takes to build these things. And our students often enter as gamers, as consumers of games. And the major pivot that we help them make is turn them into makers, to understand to take that box apart and rebuild it themselves. So the multiple roles, it is like many art fields, a master and an apprentice kind of situation where you've got to enter as an entry-level junior artist who is following along with the master trying to figure out how they do what they do, slowly working on the small safe parts from an entry- level point of view until the master trusts them enough to start working on the heavier lifting things. Those jobs are incredibly hard to find. This is one of the valuable elements of the Drexel program in that we have the co-op program that allows them to go out and work while their students work as interns within the industry. But one of our challenges within that space is identifying enough of those opportunities, especially enough local opportunities that are paid internships, to give them that entry-level competency so they can be more competitive for the higher- level positions. But entry-level jobs from quality assurance where you're just stress-testing the game to make sure it doesn't break or how it breaks, you're trying to find out how it breaks, that can be 25k, 30k a year which is barely a salary. All the way up to an entry-level programmer who is fluent in multiple languages, they potentially might be able to walk into something as a junior programmer, 80k, 90k, 100k and above, but it's a full spectrum of that entire from 20k to 100k. But again, it is the opportunities -- if there were more local companies that had the wherewithal to bring in additional talent, they could be bringing in our students to give them that entry-level experience --
How do we get more of those local companies? How do we do that? How do we get more local companies to provide these opportunities?
Well, as you'll hear from other testimony today and as I mentioned in my testimony that it is a mix. There were I recall numbers from I think it was an IGDA or it might have been one of the other industry reports from 2014 that over 50 percent of independent game developers made less than $500 a year on their own intellectual property, but those same companies earned per employee around $64,000 a year by doing contract work and grant-based work for outside clients basically, so they weren't doing their own work. That's really hard to launch your own intellectual property. And so, making those business connections so that a young up-and-coming studio can connect to larger studios to get that contract work. I hold myself up as a poster child for my students in that I worked in military and aerospace training and simulation. I've done educational projects. I've done marketing- based projects. I've done themed entertainment for theme parks and museums. The skill set that game development has is a gateway to pretty much any industry. And so, I look at the eds, beds and meds of this area and go all of those are industries that need my game development students to make experiences for them, whether it's a pharmaceutical company who needs a game on their trade show booth or another one that needs to have a game that will teach a medical student or a doctor how a medicine works within the body. All of these are potential spaces, but making those connections takes existing connections, and that's where I think this Council and the various constituencies that you are connected with makes for a very fruitful area for growth of getting young student companies, like you'll see represented today, connected to existing large companies that need this kind of multimedia support. They're not thinking, oh, they don't need 2K basketball, they don't need those big AAA things. They need some specific interactive experience in a game-like way to speak to their constituents, to speak to their audience. Our students and not just -- I'm here representing Drexel today but I'm also part of the IGDA with Adrian. With the loss of the Arts was tragic, but more, Temple, Haverford there are multiple institutions in this area. There's so many educational institutions and all of them have some form of digital content creation, which is just a larger umbrella term, to talk about game development and film and animation and all the things that are done with the same toolkits that we use in games. There are a lot of potential employees and contractors to build this incredible interactive way to educate, to spread the word on whatever it is a company needs to communicate. So lots of possibilities there.
To just quickly add to what Rob is saying, I 100 percent agree that I think you mentioned that we're known as eds, meds and beds, and there is opportunity for game development there. You had mentioned that a lot of people think about people playing video games at home as part of the entertainment industry, but we teach serious games at Drexel University, games for training, education and those things and there are opportunities within these other sectors to connect game developers so that they can continue to grow their company. Rob also had mentioned these different funding resources that you see for other media that are considered arts and culture such as film. And other cities have been investing in games as a culture thinking about them in the same way that we think about film and media and such. And some of the places that Khenan had mentioned earlier, some of the things that have been mentioned in the report is looking at these other cities where we've seen success where developers are able to kind of get over that hump of their first game because they're able to receive extra cultural funding on top of again looking into serious games and contract work that we could also help connect with, so those are all the different elements I think that we could see as helpful and again kind of getting beyond what you had said before about the perception of games as beyond just entertainment industry.
Thank you, Councilmember. Just a point of information from earlier when you mentioned having conversations with the Administration, the Library Foundation and the Director of our libraries here. I've been in conversations with the Administration about developing and building a brand new Cecil B. Moore Library. And the idea is to create spaces such as these gaming spaces that are 21st century spaces for our children, for the community to have. And so, whatever support that you all need in dealing with the library system, I'll be willing to lend that support because our libraries are the perfect spaces to have these types of studios, these types of spaces, not for children to just play video games, right, but also to learn how to develop these games as well so I'm very supportive of that idea. We need to build these new facilities in our city to keep up with some of the other cities that are taking this industry from us. But I do have a question. I'm just looking for some data I guess on the commercial success of some games like what's the percentage of those games that are being developed that actually make it to market? And I'm looking for that information because I'm trying to figure out how as a city do we invest in this space, right? Do we invest in individual entrepreneurs, right, or do we invest in creating the spaces or do we invest in the tax credits? How do we invest in this particular space? What's the best model, the best way?
All of the above, too much to ask. So I think there are multiple avenues. One, if I may, quick aside on the library concept. I often talk to prospective students that math is a core element, it's a gateway element into game development in whatever facet. And game development like you see in youth programs around robotics, the Lego First competitions that are often happening in library spaces, games are also a gateway into STEM fields across the board because of the variety or steam rather with the art injected into that gateway, into that space. In terms of support, I will defer in some detail to the further testimony from the studio members and the companies that will follow later, but I think it is a combination of investing in those business-to-business connections to get young studios more contract work to help them keep the lights on as they build their studio capacity and stability, which gives them freedom to invest more into their own intellectual property. But then also there is, as Adrian talked about, the reason we've built as the IGDA a campaign called Phillymakesgames as a hashtag, there's for the YouTube crowd, #Phillymakesgames, is an awareness issue. And so, part of that investment is when I go to GDC, the Game Developers Conference in San Francisco which is the premier networking event of the industry, even internationally not just nationally, and I go into the pavilion where all the state- and country-based pavilions are, I can look at a million dollar booth or whatever it cost, I'm sure it was quite expensive from New York state which has done a lot of investing into the game space as already been mentioned by Nicodemus and others, all the way to Canada, the entire country of Canada is represented by a booth that probably cost them $15,000, but we can't be there in Philadelphia because nobody here individually has that $15,000, so there is a larger awareness so that people know that Philly makes games and that we're making a lot already and we can make even more. I think it's a multifaceted approach of awareness as well as support of those young companies that will build a critical mass of successful revenue generation and jobs here in the city. Adrian.
I mean, I 100 percent agree. I will say outside of Drexel as the Chair for the IGDA representing game developers, my interest is to see that like future game developers have a job to go to, that's my number one concern, and I really do believe that we've had companies before start who have critical success, who have financial success, who as I mentioned before just haven't been able to get over that hump. I know that the people who will follow us, the developers and CEOs of some of those companies, will be able to speak to some of that difficulty, and I 100 percent believe that investment in them and growing something here organically is the path. That is the direction that I see going forward.
It was mentioned that some of the barriers I guess to the industry is publishers, investors, marketing. And this is a market, like the gaming industry is a market just like any other industry, right. So you want to have -- and this is America so capitalism is it, right. So what do you as a -- how can you as a smaller -- I guess I don't want to call them gamers, but what do you call someone in this industry, right, starting up in this industry? How do you stand out? How do you get yourself into a particular space that these investors, these publishers, these folks who put games to market can see your work and recognize your work outside of going to those conferences? What other things are available?
Sure. I mean, number one has always been social media. Social media has been the biggest thing for small companies to try and carve a niche out for themselves. And in the independent space when you're starting a studio yourself, the best way to stand out has become high quality art, a very good trailer. The difficulty there though, however, is that you kind of need that initial funding to be able to even develop a proof of concept. So this is why again a lot of cities and countries have started small funding boosts, even just like an initial package of money to a new company to allow them to be able to have that investment to create something that they can then show to potential investors developers to be able to create that first thing. I also know that some countries such as I believe it was New Zealand started where a returning company after they've made their first game might actually be able to have an ascending level of funding to keep that studio going to get to the next contract.
And last question: Does your organization help create some kind of pitch deck for some of these developers to give to or send to some of these larger institutional investors, other investors to say, hey, this is what we can do, this is what I can do, this is what I've done? Is that infrastructure in place?
So the IGDA has some resources like that on their website for the national organization. I can say that the primary goal of the IGDA, which is nationally based, but has chapters all around the world to support depending on what the individual needs of that community are, right so my coming here to testify is an example of that sort of advocacy. Primarily those kinds of resources have traditionally been a community effort, so there have been -- like I know certain publishers like Raw Fury and Humble Games actually share their pitch decks online for people to see, and then organizations like ours or the Philly Game Mechanics will then take those and then share them with their smaller community. So it's not necessarily the purview of our organization. However, our organization does try to connect those resources to the community at large.
And our students are also taught how to build those decks because in our studio-based courses where they're building larger projects, they're pitching those projects all the time. And part of that is having an awareness of the market aspect and pitching to an investor or other publisher, so that's part of the education aspect.
Thank you, Councilman. As we close out this panel, just a couple things real quick. I'm wondering is there anything from the report that you didn't get a chance to highlight that you feel like should be put on the record and talk to us a little bit about local tax cuts and what that would do for the industry as well too?
One of the things that I'm really excited about with this report is the wide variety of options to work and grow the community. Part of actually what I wanted to add into an earlier question was how do you get recognized, how do you get found. And some of that is through, you know, we're representing the makers of games, but part of this push includes the playing of games through esports and the supporting of that --
Part of the report discusses esports and the playing of games. And so, part of what we've done at Drexel, like I mentioned earlier, Rivals of Aether, which is an esports game built by one of our alum, we've had esports events using that title. And one of the things that I would love to see and is, I think, part of the esports portion of this is having local esports- related games being played at these events and not just top tier AAA games made elsewhere but having local games part of that esports initiative. I think the element of tax credits and the B2B connections and the existing arts funding that is available being open to game projects are all important elements of making it fiscally possible to have a young company survive past that critical first couple of years until they can really get on solid footing and persist. Some of those things are a short run but can help them get going, so to me it's about building that awareness and building those connections between all the large industry that's already here. Comcast Labs is part of Comcast, the larger corporation, and we have alum there working on a variety of non-game entertainment projects --
So with that concept in mind, my team and I were thinking about UCity Science Center, right, which is an example of a KOZ zone and a university and government partnership focused on basic research as well as job creation, clearly that's mostly for life sciences. What would it look like or could we expand that or have a similar type of portfolio as a partnership with Drexel looking at the city, a KOZ zone, local university, job creation and all parties involved providing support and this possibly being a pilot for a space that can put us in a position to help grow the industry? It's a random idea, thoughts.
I'm intrigued. I can't suddenly elevate myself to the position of President of Drexel University --
And I can't be a District Councilperson to provide a KOZ zone, so we're definitely speaking in a hypothetical here.
But I love the idea. I love the idea. Actually I'm on a -- co-op is a huge part of what Drexel University represents and offers an educational experience and I've been part of a co-op committee within Westphal College, the art and design college within Drexel, working specifically to identify other ways and partnerships that we can build more paid internship possibilities and exactly the kind of partnership that you're talking about to me would feed right into that conversation and I would be very excited to continue that conversation about that. I think that'd be very interesting.
Amazing. All right. So I'm going to let you go. This is what I'll ask you to say as your goodbye. 54 to 60 percent of students who are within the department eventually leave when they get their degree. Talk to us in comparison to other majors, right. So if I didn't know any better, I would say, oh, yeah, well, you know, everybody leaves, right. 54 to 60 percent of people who get their law degree from Temple leave the city, 54 to 60 percent of the people who get their Bachelor's Degree in Education go teach somewhere else. So how alarming are those numbers? Are they really bad? Are they the norm? Should we be worried or is it to be expected? And that'll be my last question, and we can move on to the next panel after this.
I thank you for the opportunity overall and for that last question. What those numbers don't represent is of the 40 percent who stay in the city, of the roughly 50 percent that stay in the state overall, a much smaller fraction of them stay in game development. And so, those numbers don't represent who stays in game development in the city. That just means who stays and finds some way to pay their bills.
And I come from a generation where everybody around me, very few of them went on to actually do what they studied to do. I sit before you a Master's of Fine Arts of Metalsmithing from Tyler School of Art, but I found my way into digital storytelling and making themed entertainment and that's how I run a game department now. It breaks my heart to see so many of my students with incredible talent -- what we haven't even addressed today is the challenge that our international students, which is maybe only 10 percent of my program specifically, but sometimes they're excellent talent and their visa challenges where they not only have to find a job but they have to find one fast before their time runs out on their visa to watch incredible talent have to not only leave the city, leave the state but leave the country that we trained, that we helped get to that high level of excellence, they have to go. They have to find some other way to make a living and that spreads out to too many of my students. They want to be in the area. They have family ties. They have financial cost of living. They like the area. They want to be here. They can't afford to stay and stay in the industry so they have to find a different path, and that number is way less than 40 percent.
Thank you both. Thank you for your presence. Thank you for sharing your expertise. Thank you for all you do to make our city great, and we want to continue to work together and explore what we can do to expand the program and of course provide opportunity for the students who go to the program so we can put them in a position where they can stay here and much longer, your numbers, and of course work in the industry, so thank you.
Thank you both. Mr. Maynard, will you please call the final panel for today's hearing. I want to -- go ahead, Mr. Maynard.
Yes, of course, Mr. Chair. For our final panel, we'll hear from Ishmael Shaheed from Nerd Street Localhost and Nick Madonna, the founder of PHL Collective. Please --
I know that we have a number of people -- go ahead, Mr. Maynard. I'm sorry.
I know we have a number of people who signed up for public comment. How many is there, Mr. Maynard?
Okay. So we're going to ask the people on the public comment side to try to limit your remarks to about three minutes per person if that's okay, so you can kind of prepare yourself for your remarks to be around three minutes per person. And this panel, please state your name for the record and you can begin your testimony. We'll allow you both to testify consecutively one after the other.
Absolutely. First of all, good afternoon, Councilman Thomas and members of the Council. My name is Ishmael Hall. I'm the head of venues of for Nerdstreet, which currently has me supporting other great leaders. I'm in the Denver area and also the Philadelphia area and the Glassboro area for Rowan University. Before I begin, you made a point about saying folks are going to be watching this on YouTube so let me explain what Localhost is. So Localhost is an esports land center. We do tournaments, events, birthday parties. We also work with third parties to host events that they may want to do. A lot of these great people behind me that create their own games, they actually were able to use this facility during PHL Gaming to show off their games that they created to different people in the community and also to inspire the youth to go on that same route as well too. Our local's venues that I previously mentioned all offer unique experiences tailored to the communities in Denver. We see a strong focus on high level competitive esports in which we're able to support groups striving for top performance while our Philadelphia and Rowan properties focus on building diverse participation in skills include broadcasting, streaming, event management and community engagement and a lot of the other things that folks were talking about today, my fellow peers were talking about earlier today. For our first university property in Glassboro provides a crucial dedicated space where students can practice and hone their skills without worries of equipment, limitations making it an attractive option for high school students to have a place to go to after they graduate to go for a degree for esports. Our Philadelphia property located at 401 North Broad Street near Temple, Drexel and other local high schools, tech hubs and the Philadelphia Library continues to be dedicated to offering students in the community opportunities beyond competition. Across all three venues we focus on creating positive, practical and career-focused experience and the technical and communication side of gaming rather whether through competition or community involvement. The data that I'm about to speak of highlights the powerful impact of esports on students' academic performances. 7 percent. Furthermore, 60 percent of coaches report better grades in attendance among players while 30 percent of students express a greater communication -- commitment, my apologies, to academics. Esports also significantly boost school's engagement with 45 percent of play versus students feeling more excited about going to school and 80 percent of high school esports players being new to extracurricular activities. S. esports generated 243 million in revenue in 2021 contributing significant to local economies. Major esports events have brought substantial economic impacts to host cities ranging from 100 to 280 million. Cities like Jacksonville, Chicago, Nashville and Atlanta which consider themselves the capital of esports. Having seen the tangible benefits from the growing industry, this is why we're all here today because we know that Philadelphia can also compete and also be a part of that winning success for esports and also gaming. Employment within the esports has grown massively with an 87 percent annual increase since 2019 and a jump from 39,000 to around 41,000 jobs between 2020 and 2021. S. are employed by esports. Venue sectors surpassing employment levels in many other industries. Roles range from software engineering, game development and marketing, event coordinating and content creation and so many other different positions that my previous colleagues just spoke about. Offers competitive salaries, start from anywhere between 30,000 to 40,000 for entry level positions all the way to six-figure incomes for specialized roles.
Beyond economic growth, esports fosters essential skills like teamwork, communication, critical thinking and leadership, making it an important part for the modern economy. I know a lot of folks spoke about different venues and what's needed in the Philly area. Just to kind of speak about Localhost, Localhost venues empower communities by providing high- quality PC and internet access fostering academic, social and career development. Nerd Street with the support of Philadelphia partnered with schools to offer esports experience rather that be commentary production, marketing enhancing critical communication skills. Data on esports positive impact on student performance supports align Localhost programs with academic support, creating a more comprehensive system. Esports is a valuable education and career development tool, and I'll repeat that again. Esports is a valuable education and career development tool benefiting students and the community together. We can nurture the next generation of talent and make a real difference in the city of Philadelphia. So that's all I have.
Hi. Good afternoon. My name is Nick Madonna and I'm the founder of PHL Collective and a consulting member of the PHL Gaming and Tech Task Force. Today I'm speaking to propose how we can grow a thriving video game industry in our city by investing in dedicated funding for local developers and fostering programs to attract and retain creative talent. We can unlock Philadelphia's potential as a vibrant job-creating sector centered around video games. With the city's support, we can transform challenges into opportunities and build an industry that benefits everyone. Before I get started, I'd like to thank Councilman Thomas for hosting this hearing. I'd also like to thank the other members of the Council who are present. Your time and consideration regarding these matters are very much appreciated. Since 2013 I've been running PHL Collective, an award- winning game development studio founded and headquartered here in Philadelphia with the core goals of making great games and growing local talent. Out of nearly 17 years in the industry, I've been 18 running PHL Collective for 12. 19 Before I can tell you more about 20 PHL Collective, I should quickly tell you how I got here. It's a story about leaving Philadelphia in order to come back, something that's not uncommon for local graduates who possess creative and technical skills. I'm a fourth generation and current resident of South Philadelphia. I was born here. I was raised in the suburbs and attended Philadelphia University as an industrial design major. Video games were always my passion and Philadelphia University wasn't meeting my needs, so I left and attended Full Sail University in Florida. I received my degree and returned to Philadelphia only to find no local job opportunities. I found an entry-level opportunity in Los Angeles, packed my bags, moved and I grew my -- I'm sorry. I grew my career there working for large companies like Square Enix and Vivendi Universal on renowned AAA titles like Final Fantasy and Fear. I continued to grow my career with Saber Interactive, which was headquartered in New Jersey and St. Petersburg, Russia. With Saber I lived and worked internationally shipping huge titles like Halo, Inversion, World War Z and even Shaq Fu. Once I'd built enough experience, contacts, pennies and know-how, I bet on myself and returned to Philadelphia to start PHL Collective, a studio meant to be part of a small and growing local scene, a studio that would also help solve problems I ran into while looking for a job coming out of college. I knew there would be more people like me who didn't want to leave the city and were being forced to due to lack of local job opportunities. PHL Collective was founded with a team of six highly- skilled local graduates from Drexel and University of the Arts who wanted to stay in Philadelphia and grow something. We were supported and mentored by Cypher Prime, Flyclops and Final Form Games. These Studios were founding members of Philly Dev Night, the precursor to Game Mechanics and were the first wave of indie studios here in the city. Since its founding, PHL Collective has continued to grow its headcount to nearly 30 and has continuously signed major publishing deals to release titles based on world-renowned IPs like Star Wars, Justice League, Barbie and SpongeBob SquarePants. Today if you walk into any Target, Walmart or GameStop here in the U.S. or a similar store internationally, you will find a game created here in Philadelphia by PHL Collective on the shelf. These are some of the games here in front of me.
Do you hear that, Ms. Carter? We're trying, right. And for those who don't know, I think it's really important to understand that -- and I keep referencing Ms. Carter just because the Mayor isn't here but Ms. Carter and the Commerce Department has been a great ally as it relates to the work that we're doing, our advocacy efforts and having coordinated initiatives to be able to fight for this. So again, thank you for staying as well too, Ms. Carter. Your representation in the Commerce Department listening to everyone's testimony is greatly appreciated. Go ahead. Please continue. I apologize.
No, no 24 problem. Video games get us excited, right. So all the games that you have in hand are games that you could find on the shelf in any of the stores that I mentioned. So all this is only possible with our local talent and the mentorship we received at Philly Dev Night. PHL Collective is leading the second wave of studios in Philadelphia and it's imperative that we work together to build a support framework for current studios and future ones that will call the city home. Today I urge City Council to take decisive steps to position Philadelphia as a leading hub for the video game industry. The following four targeted solutions are crucial for supporting current businesses while laying the foundation for future growth: First, establishing job creation and job retention tax credits will incentivize studios to hire and retain local talent, addressing one of the most significant challenges for local developers.
Establishing job creation and job retention tax credits will incentivize studios to hire and retain local talent, addressing one of the most significant challenges for local developers. Building stable teams in a competitive industry by reducing the financial burden of employment, these tax credits can help studios expand, create well-paying jobs, keep skilled professionals in Philadelphia and attract more game studios to set up offices in the city. Second, introducing a Philadelphia video game production tax credit will attract more developers, publishers and service providers here to the city. Requiring that at least 30 percent of production expenses be spent locally ensures that these investments directly benefit Philadelphia's economy. Offering an additional 10 percent credit for productions that feature the Phillymakesgames hashtag or logo in their credits not only incentivizes local pride but promotes Philadelphia on a global scale attracting more business and eyes on the city and what is being built here. Third, abolishing the Philadelphia business income and receipts tax will remove a significant financial obstacle for small businesses, particularly those in the creative fields like video game development. Eliminating it will create a more equitable and business-friendly environment, allowing developers to reinvest in their companies and their projects. And finally, launching a creative grant program for game developers is essential to nurture innovation in this industry. For many independent developers here, access to funding is the difference between success and failure. By providing direct support for the creation and release of video games, this city can empower a new generation of creators who will shape the future of gaming while further cementing Philadelphia is a hub for artistic and technological innovation. These solutions are not just investments in the video game industry. They are investments in Philadelphia's economic future. By fostering a thriving creative sector, the city will attract talent, generate jobs and build the reputation as a forward-thinking hub for digital media and technology. Council, thank you again for your time and consideration. I look forward to working together to build a stronger future for Philadelphia's video game industry.
Thank you. Thank you both for your testimony. Just a couple quick things. Thinking about your space, how many people do you have that come through your doors in a year?
So it's actually a -- thank you for asking that question by the way. So for our facility, it's a unique space because when we do our own events, we actually are able to contribute to bringing other folks in from different areas of the world. So I would say a few years ago we had a CSO event where we had folks from Australia, we had folks from just different -- like Germany, I believe that was another place that someone else came in that they're able to come in to compete. Now, obviously those are one-offs. We need the funding in order to market that. Our marketing team can only do so much and only reach so far, but we're able to reach out through community members by reaching out to one another. But on the daily, I would say for the Philadelphia property we have schools -- we have a free student hour from 3:00 to 5:00 where students can come in after school, have a safe place to kind of meet up with their friends, hang out, play games, get to know one another. From there that's probably like around 40 kids that come in during that time period. Any other given day on the weekend it can be anywhere from 60 to 80. If we have a tournament, it's anywhere from the hundreds to the 150s.
So thousands of people in a year take advantage of your space?
So it's not a membership. Memberships are totally free to make. It's just going to be an hourly purchase. So for hour play is $8 and then afterwards 4 hours is I believe 20 and then 12 hours is 48. The hours don't expire. They're able to stay on their account and come back any time that they choose to come in. We also have day passes and we also have worked with universities like Temple and also Drexel to provide day passes for the day where they're able to come in.
Thank you. You have the ear of the Mayor. You have the ear of City Council right now. You listed a couple recommendations. What is the most important one or two? All of them are important, and clearly we need to exercise and use our platforms to try our best to implement as many as possible. This is my last question. What do you think is the simplest and easiest to implement? What do you think is the most important to implement?
The simplest and easiest solution to implement is something similar to Rob's testimony earlier, which is leveraging existing mechanics that are in place when it comes to tax credits, specifically the retention and creation credits. I do know that they exist for similar industries here in the city and I know that the ceiling is very low on what's offered, but I think if we were able to leverage those existing pipelines, that would be the easiest way to move forward on an actionable item that would help developers. The single most important one would be the creative grant program. If we have a fund where developers are able to fund their games from creation to actually bringing it to market without having to rely on a third- party publisher, that incentivizes and empowers them to generate revenue on their own without being beholden to a third-party partner that takes a large portion of the pie.
30 seconds. What would that look like for government to do that?
We could look at similar states like Georgia or Louisiana or even Montreal where there is a fund that developers can apply to, get credits --
How much are the grants in other cities where this already exists?
So in Montreal you can get a credit anywhere from $150,000 to $750,000.
Okay. Good to know. What if we were to do it on a smaller level?
On a smaller level it would help, especially as games need specifically investment to get them over the line and get to market. Any amount of money that could be offered to a developer to help them release their game on Steam or Xbox to put a little bit money into marketing. As low as 50,000, as low as 25,000, that will do worlds of wonder for a developer looking to release their game.
So if the City created a pilot program that gave away $1.5 million to developers in the city to further their vision.
$1.5 million, all right. I'm looking around, you know, seeing who hears this.
Yeah. Those are numbers that help with our initiative that build from the ground up. Those numbers would have to grow in the future.
My only thing would be this, it's very difficult to give a grant to a startup. How do we do this in a way that's realistic because for us government can't fund an idea, right. You kind of got to be a proven -- I'm brainstorming.
And this initiative that the PHL Task Force is all about is furthering our economic goals and furthering an industry here in the city. So if you're a video game startup and you have a product that you want to build and you have a plan for how to get it to market, that should be enough to get a little bit of money to help --
Thank you. I'm getting multiple yeses. All right. I want to say thank you to this panel for your testimony. Thank you for your patience. I know there are a number of people who want to provide public comments so I don't want to hold them up any longer, but we appreciate your expertise. We appreciate you being in Philadelphia. We appreciate you staying here. And hopefully, the next time we come back in these chambers we're doing a victory lap around what we've been able to accomplish and what we still need to do because we know we're not going to get everything done in the first round. But based on your expertise and your advocacy, hopefully we can see some things change that benefits the industry, especially with 2026 on the horizon, because we got to get gaming right for 2026. I want the PHL Gaming Festival to be big and amazing, but I know that there are so many other initiatives and events and creative ideas that are out there. I want us to maximize 2026, so thank you. Please, last comment and then we can move on to public comment.
Absolutely. I just want to add one more comment for Localhost and Nerd Street. We're able to also meet you at wherever you are maybe too. So if anyone ever needs support with equipment, we have the technology and we also have the infrastructure to actually help you build it out. So thank you for your time.
Thank you. Mr. Maynard, if you could call up our witnesses for public comment. Just for those of you who know, during public comment is not normally a question-and-answer thing. So you can come up, provide your name, provide your comment and it will be added to the record and then we'll be getting ready to wrap up. Are you guys okay? I know we're going a little late. I know you had one this morning?