Once the China but with high quality location for video game manufacture, the australian games indsutry has really hit some lows with many studio closures and thousands losing there jobs because of the dollar being so strong against the USD. But while the ios/mobile development is growing it appears that they may be getting support from the government. The government of australia is going to change its legistation for Research and Development tax credit which is designed to help australians invest in companies focused on R&D. Basically its 45% refundable tax offset, and our local games developers assoication is working closely with the government for including games development with all the production work such as writing new code, doing new animation etc which games studios do to create games, that all comes under R&D. 

This is only for small-medium business's that earn less than 20 million dollars but contact work is also included. Combine this with the local universities (that are Asian leaders in education) are pumping out 100s of games developers students this is great news and if passed would create rise to alot of small studios poping up and able to score contacts with Major publishers to produce games. 

This could be great news if passed. 

read more at:

http://www.kotaku.com.au/2011/06/how-a-tax-bill-could-kickstart-the-aussie-games-industry/

Great news for Australia, maybe they will create some games that really sell well. As for the comparison to Canada, the Canadian Government helps all publishers and developers in some way or another. Thats why UbiSoft, EA, Square, RockStar etc...etc... all have bases in Canada. If Australia can do half of what Canada does then their industry is going to explode.

However I dread the day that Sydney eclipses Vancouver as game development capital of the world!

The success of Australian animation and visual effects studio Animal Logic last week announced plans to expand the development of an interactive game, but the Game Development Association of Australia has failed to meet the new studio is based in Los Angeles.

LA Noire is selling nicely and Bioshock 2 sold well as well. Dont know about X-COM with all that hate. But hopefully this does help build more smaller studios and boom the industry like in canada. 

also it would most likely be melbourne or Brisbane :D.