Michigan’s tax credits for Hollywood films underwent drastic cuts in 2011, but reworked legislation opened the door to viral players.
Elvis Presley passed away 35 years ago, but his music and movies are reaching new audiences thanks to a digital developer in Royal Oak. Founded in 2008, Pixo Entertainment tripled its revenue in three years. Representative of rapid changes in the industry, the company is on pace to post a three-fold sales increase in 2012, to $6 million.
Pixo, which designs games and applications for mobile, social, and video platforms, has developed and published properties about legendary golfer Ben Hogan, The Improv comedy empire, Mexican singing sensation Anahi, and Zorro, the fictional swordsman who protected the downtrodden from tyranny during the Spanish colonial era in California.
The company has been the beneficiary of a confluence of recent changes in the entertainment industry, including the 2011 reworking of Michigan’s movie tax credits by the Snyder administration. Along with a $25-million annual cap — the incentives surpassed $100 million in 2010 — the Michigan Film Office provided more inducements for digital game developers in the state.
Under the new plan, digital-related tax credits can reach 35 percent of a given project. Developers also can apply for the credits as soon as a project has been completed, rather than waiting for the calendar year to end.
“The reasoning was that movie producers spend three to four months filming here, and then fold up their tent and go home,” says Sean Hurwitz, Pixo’s CEO. “Because companies like ours are here year-round, there’s more bang for the buck. The money stays here, and is reinvested in new jobs and economic growth.”
Since Pixo’s inception, when it got off the ground with just a handful of employees, Hurwitz and his partner, Chris Firestone, have hired more than 30 designers, programmers, and social media experts.
Other factors driving Pixo’s growth: The advent of Facebook in 2007 and Apple’s App Store a year later, as well as Google’s foray into the smart phone market via its Android platform. A decade ago, the cell phone market was just taking off, but today roughly 70 percent of the world’s population has a mobile phone.
Pixo drives revenue by designing and building games and applications for social networks, tablets, cell phones, and video game consoles. It also helps advertising agencies develop games around popular brands, and creates special effects for the film industry.
For the app Graphic Elvis, available for $9.99 on iTunes, Pixo worked with the Graceland estate to offer a 3-D tour of Presley’s Jungle Room, along with rare notes, telegrams, and photos. There’s also a comic book of the entertainer’s life created by legendary artist and storyteller Stan Lee, of Marvel Comics fame. “Elvis may have left the building, but he will live forever in the digital world,” Hurwitz says. db