Tiga talked today about the results of a study by the National Endowment for Science, Technology and the Arts (NESTA). The research showed that nearly 75 percent of gaming executives thought that original IP had declined in the U.K. and nearly the same number thought that a tax credit would allow them to pursue more original IP. The lack of tax breaks for gaming production and the flight of developers to other regions was a top concern, while over two-thirds of financiers and publishers said they'd be more likely in invest in U.K. development with a tax break.
“NESTA’s research confirms that while the U.K. video game sector remains a world leader it has been under enormous pressure for the last five years. This is because our key overseas competitors have benefited from generous tax breaks for games production. The unfavorable tax environment has also led to a decline in the development of original intellectual property on the part of the U.K. games industry," said Richard Wilson, CEO of Tiga. “NESTA’s research also shows that a tax break for games production could lead to employment growth, the development of new IP, attract external funding into video games and encourage overseas publishers to invest in the sector. Significantly, independent game developers are unanimous in believing that a tax break for games production would enable them to adopt more sustainable online business models, selling games directly to the consumer.”
Following this, Tiga submitted the evidence to the Department of Culture, Media and Sport in the hopes of getting said tax break. They note that the number of jobs and studios in the U.K. decreased over the past year and that "brain drain" is happening to countries with tax breaks for games, like Germany, Canada and South Korea. Tiga is proposing a Games Tax Relief, which adapts the existing U.K. film tax relief legislation. Over the next five years, the Games Tax Relief is expected to create 1,400 new jobs and contribute hundreds of millions of pounds to the GDP.
“For far too long the U.K. video games industry has been effectively ‘taken for granted,'" said Lord Puttnam of Queensgate, Vice-Chairman of the All Party Parliamentary Group on the Computer and Video Games Industry. "To ensure the continuing success of this pre-eminently creative sector, I can only urge the Government to support Tiga’s case for the introduction of a form of Games Tax Relief, as set out in this report.”
