If Austin wants to grow its significant but mercurial gaming industry, it could offer economic development deals to smaller companies and try to lure publishers to headquarter in the capital city, Fred Schmidt said.

Schmidt was an executive partner in Origin Systems, the company that produced "Ultima," "Wing Commander" and "Omega." He is cofounder/CEO of Portalarium, a company that makes games for mobile and social networks, and CEO of Wild About Music Galleries, a store on Sixth Street.

He spoke during "Building Headquarter Gaming Companies in Austin," a panel during SXSW Interactive on March 12.

The creative industries—everything from video games to the arts—have a $4.3 billion economic impact on Austin, Schmidt said.

Schmidt said he understood that the City of Austin's 2012 economic incentive deal with Apple Inc. represented a good return on investment, "but it's all investment that is not from Austin."

He contrasted that with the debate over the City Council's consideration of working with local filmmaker Robert Rodriguez ("Desperado," "Spy Kids," "Machete"). The council unanimously approved a professional service agreement with Rodriguez' company, Troublemaker Studios.

"Invest in that man! He is the poster child for homegrown talent," Schmidt said, noting that Rodriguez was also working on a new cable channel, El Rey.

While Austin game developers have had a hand in producing successful titles such as "Epic Mickey," the city has not generated a blockbuster hit the way that "Angry Birds" has benefited Finland's Rovio Entertainment Ltd. or "World of Tanks" has benefited Belarus' Wargaming.net.

Austin is home to game development and various studios, but the publishers and parent companies are located elsewhere, Schmidt said.

If a game has a $100 million global economic impact, 80 percent of that goes on the balance sheet of the game publisher, he said.

"We may get $20 million, which makes us look smaller than we really are," he said.

Schmidt said he believes that getting or cultivating an anchor company or long-term entrepreneurial effort would make it easier to recruit talent.

"Within the sector, we need someone to take the really long view," he said. "Where is the John Mackey of Austin games? Someone to create the Whole Foods Market, the National Instruments, the BazaarVoice? We are struggling with that piece."

Gaming is a $200 billion global industry, Schmidt said, citing industry research firm DFC Intelligence.

2012 was a rough year for gaming nationwide, Schmidt said. Gaming attracted $835 million in venture capital, down 57 percent from 2011's record $2 billion.

2012 was also a rough year for Austin game development, he said. Austin lost about 1,000 jobs in gaming; the total local industry has only 7,000–8,000 jobs, he said.

Red Fly Studios, Heatwave Interactive, Zynga, Edge of Reality, LightBox Interactive and Portalarium all had to lay off some employees in recent years.

There are new companies arriving, however: Kabam, Bethesda Softworks and Cloud Imperium. Schmidt said it is easy to convince talent to relocate, settle or return to Austin.