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UK Government reveals tax breaks for video game industry
UK Government reveals tax breaks for video game industry
March 21, 2012 | By Mike Rose

March 21, 2012 | By Mike Rose
More: Console/PC, Business/Marketing

The UK Government today announced that it intends to introduce tax relief for the UK video games industry, as it aims to make Britain "Europe's technology centre."

The Labour Government had previously said that it would introduce a Games Tax Relief back in March 2010 -- however, the coalition Government then dropped the initiative in June 2010.

UK trade group TIGA suggested soon afterwards that if the Government did not support tax relief for the video games industry, then it may lead to a 24 percent headcount drop over the next five years. It then proposed new tax break measures earlier this year that it said would support the growth of local developers and publishers.

Dr Richard Wilson, CEO of TIGA, called the move a "brilliant decision" and "a decisive victory" for the video games industry.

“Tax relief for the video games sector will increase employment, innovation and investment in the UK video games industry," he continued. "Our research shows that Games Tax Relief should generate and safeguard: 4,661 direct and indirect jobs; £188 million ($297.9 million) in investment expenditure by studios; increase the games development sector’s contribution to UK GDP by £283 million ($448.4 million); generate £172 million ($272.6 million) in new and protected tax receipts to HM Treasury, and could cost just £96 million ($152.1 million) over five years."

Numerous high-profile names in the games industry expressed their delight at the news, including executives from Rebellion, Jagex, Denki, Bossa Studios, Thumbstar Games, Blitz Games Studios, Crytek, nDreams, Relentless and Double Eleven.

Colin Anderson, MD at Denki, said that the proposed tax relief will "stimulate much needed investment and innovation" in the UK video games industry, while Crytek MD Karl Hilton said the move will "promote the creation of high skilled jobs, enhance investment and stimulate an export focussed industry."

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David Pierre
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Aww, I wanted you guys to all move to America so you'd open up more jobs! ...But then again, that'd probably lead even more of your talented workers to move here as well, and it'd become even HARDER to find one.

I guess it's a good thing for all of us then!

James Coote
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Where do I sign up? :)

I hope it sticks. One of the complaints from many businesses in the UK (not just in games) is that the government keeps changing the law, making it hard to plan long term based on such schemes

Craig Page
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Tax breaks are nice, but you lose your advantage when every other country offers the same or better tax breaks too. The government should take their incentives to the next level: exempt the industry from child labor laws. Imagine all of the jobs that would be created if the best and brightest school children were working 80 hours a week on the next big console game and countless other handheld games.

Darcy Nelson
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I can't tell if you're joking or not.

Tomas Majernik
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He better be joking.

J Spartan
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It is great news for the few remaining uk games developers/publishers. It's about trying to keep your technical talent as much as helping with the financial side of things. In particular most of the other top tier game developing countries give tax breaks, and for years uk based companies have struggled to keep the local uk production base going in this uneven playing field.

Possibly it may be too late already to make a huge impact as many of the bigger uk companies have already moved to Canada or the States, or atleast sold themselves to bigger companies that operate from those countries. We shall see, but certainly if i was looking to start up a studio in the uk, this would be the kind of news that could help in that decision. I just hope it isn't too late to breath much needed life into the uk games industry, which can be a very creative and technicaly compitent one.

Jim Partridge
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Once upon a time, back in the 1980's the UK had a booming games industry. Weird and wonderful titles like Jet Set Willy, Manic Miner, Hover Bover were pumped out for open platforms like the sinclair and C64 etc..

Games were sold on an unlocked format (cassette) and these small development houses were able to grind out a small profit while having complete creative freedom.

As the console market came of age, the licensing costs and pre-requisites for of simply being able to release a game onto a locked down platform became prohibitively expensive. This pushed control of the gaming market (outside of the PC) into the hands of several large orgnanisations (PSN, EA, Activision etc..) and slowley eroded the innovation of those early years.

While these tax breaks make it more appealing to create a games development house in the UK, the hugely prohibitive costs of the console market still make it doubtful that independent start ups in the UK will be able to release content to anything other than the PC platform without selling out / partnering to the big publishing firms and thus stifling innovation once again.

The PC platform is exploding with many new innovative indie titles at the moment which is fantastic but not the real win that the UK games industry is looking for as the big money is not in PC indie titles but with the mainstream console market.

That is until someone releases an Indie console based on the Raspberry Pi... :P