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GIVE US A BREAK
What role can government-funded tax breaks have on a country’s bid to establish itself as a leading player within the global videogame development scene?
By Martin Korda
$115 billion. It’s a figure that’s hard to ignore, especially in a time when the global economy is floundering in the depths of an unprecedented slump. But according to boffins at technology advisory firm Gartner Inc, $115 billion is what the videogames industry will be worth by 2015. It’s little wonder then that games development has been identified by several countries’ governments as key components to their nations’ economic growth.
By incentivising the establishment and growth of videogame developers within their borders through generous tax break incentive schemes, these governments have created a mutually beneficial financial framework to support both the growth of the games industry and that of the nation’s overall economy.
Taking its lead from the likes of Canada, USA and France, the United Kingdom recently announced in its 2012 Budget plans to introduce tax breaks for UK-based game developers, with exact details set to be announced in autumn 2012 after an extensive consultation period with key industry players. The UK games industry’s battle to convince the ruling bodies of the potential benefits of game tax breaks has been a long and challenging one, a fight that has been spearheaded by TIGA, The Independent Game Developers’ Association, a leading trade association that represents the UK’s games industry.
“I knew in some respects that the worse the economy was the better it was for our case for Games Tax Relief,” explains TIGA CEO Dr. Richard Wilson. “There are only so many ways we can promote growth. It’s not as though the government and the opposition have a locker full of policy ideas. The fact that we had a concrete policy proposal that was researched, backed-up and ready to go probably stood us in quite a good position given the wider economic malaise.”
Wilson and his allies presented the government with compelling evidence that the UK was drastically falling behind many tax-incentivised overseas centres of game development. “We had a lot of anecdotal evidence in relation to the brain drain of talented game development staff that was drifting overseas,” he explains. “41% of the jobs that had been lost between 2009 and 2011 [in the UK videogame sector] relocated to Canada or the United States.”
But the UK government’s move appears to possess more ambition than a mere cursory nod to a burgeoning industry. “The Plan for Growth published in 2011 identified the creative industries as having the potential to drive significant growth in the UK, prompting the Government to set a new ambition of making the UK the technology centre of Europe,” revealed a Treasury spokesperson who spoke with us regarding the UK government’s wider plan…
This is just a small extract from the full feature in Issue Three. To read the entire article, click here to purchase the complete digital edition of Continue for just $2.99/£1.99/€2.25.