THE creator of the biggest game ever made in Australia says the local industry needs subsidies like film and television if it is to survive.

Team Bondi founder Brendan McNamara — the man behind blockbuster LA Noire — said the industry was currently not competing on a level playing field, with other countries already propping up their game development budgets with government money.

"It's hard... you have to do it here because you like living here," he told news.com.au.

The continued strength of the Australian dollar had also hurt the industry which can no longer compete as effectively on price for foreign game investors, Mr McNamara said.

"We have to compete with places like Canada where 40 per cent of the budget of the game is provided by the government," he said.

Read the full interview with Brendan McNamara

"You have to kind of compete on what's original about your title and what's going to set the world on fire about your title, as opposed to just price."

For the local industry originating a game like LA Noire is a rarity. Most development work is usually done "for hire" on a much smaller scale for overseas companies and their projects.

The situation is similar to film — where a smaller subsidised local industry competes against bigger budget Hollywood product and any overseas production work arrives only if it can be made attractive through government incentives or a weaker dollar.

With latest research from Queensland University of Technology tipping that Australians will spend $5.8 billion on games over the next four years, the head of the Gaming Developers Association of Australia (GDAA) Antony Reed said it was time for the Government to take video games seriously.

"I don't like to use the word 'cottage industry'," Mr Reed said.

"But the Australian video game industry hasn't had the opportunity to grow as much as it could have done.

"Certainly we haven't had the opportunity to do a lot of great intellectual property (like developing original game projects and programs) as a result of the lack of support."

In any case, Mr Reed said the evolution of technology meant the lines between film, TV and games were blurring.

"We're starting to see a new generation of filmmakers that see the opportunity games presents to expand their narratives," he said.

The Australian gaming industry generated about $3.6 billion in revenue last year from retail sales, development, manufacturing and subscriptions.

QUT’s Dr Sandra Haukka is working with GDAA to develop a future skills strategy for the industry.

Her latest report Working in Australia's Digital Games Industry shows key issues to gaining a bigger share of the fast-growing market included gaining highly-skilled staff, developing more online and mobile games and catering to the needs of new audiences.

"The industry can look forward to a 50 per cent increase in spending by Australians on games, rising from $1.1 billion in 2009 to an estimated $1.6 billion in 2014," Dr Haukka said.

"With 27 per cent of mobile users already using their phone to play games, Australian developers will continue to benefit from strong consumer demand for apps for mobile devices."

According to a report by Access Economics the local film industry earned more than $14.5 billion in revenue in 2006-2007