Dundee Developer Urges Action to Help Games Industry

31st January 2009

In order to safeguard the future of the UK games industry and prevent the loss of thousands of jobs, the head of Dundee firm Realtime Worlds has said - the government should offer tax breaks to software development studios.

Colin MacDonald warned that the games industry, which employs nearly 30,000 people and contributes £1 billion to the gross domestic product, will decline unless action is taken.

Worldwide sales last year totalled more than £22 billion, making the video games market vital for the uk economy.

In the last two years, the UK which has traditionally been the third largest games developing country in the world, has fallen now behind Canada and South Korea.

Canada, France, Australia and the US already offer subsidies and Mr McDonald warned that unless the playing field is levelled UK developers will be unable to compete.

Canada offered $500 million in tax credits, resulting in $1.5 billion of inward investment.

Several developers have banded together to lobby the government to introduce a 20% tax credit on game production—which has already been introduced in France and has been approved by the EU. They claim this would help create 11,500 jobs and bring more investment into the UK game industry.

“There has been a big push to get the government to do something about the state of the industry,” said Mr MacDonald.

“The UK is doing pretty well but the problem is that a lot of other countries have tax incentives in place which means they will attract a lot more investment, taking it away from the UK”.

“Britain has always been up there in terms of games development but has now been overtaken by Canada, because of the incentives they offer.”

If the government cannot approve the tax breaks, it will only mean companies will face losing their best talent to companies abroad being able to offer a better pay.

He said, “Companies will go where the price is cheaper, even if development in the UK is of a higher quality. At the moment the UK is doing great and games are worth more than DVDs or music.

“It is one of the few industries that is actually growing so it is kind of ironic to see the government helping out industries that are not rather than the one that can grow the most.”

Realtime Worlds is one of the UK’s most successful development and has joined other companies to lobby the government.

Mr MacDonald said, “They have been making positive noises but so far they haven’t done anything.”

Richard Wilson, chief executive officer of Tiga, the trade association representing independent games software developers, said, “With a 20% production tax credit—like that approved by the EU and found in France—we could create many new, high-value jobs, millions of pounds in new investment, and promote closer collaboration between industry and education.

“Without real measures to turn the tide, we’ll see our best people follow the money overseas to where governments are more willing to invest in the future.

“A great British industry could become a dead man walking, just like the British film industry before government gave it a tax credit. We must act now if the UK games industry is to remain a global leader.”

Share this Article:

• Delicious
• Digg
• reddit
• Facebook
• StumbleUpon