Targeted tax relief for the UK video gaming industry could give a much needed boost to employment, says a report by TIGA lodged with parliament.
TIGA, the UK gaming industry body, says that employment in UK games development has fallen by over 10% since 2008, while the Canadian games industry has grown by 33%.
In a submission to HM Treasury and to the Department of Culture, Media and Sport TIGA is asking for the same tax relief that the UK film industry gets.
The tax relief would work like this: if a game makes a profit, the development company could reduce the amount of tax payable on that profit. If the game makes a loss, the company could get a cash tax credit to reduce that loss.
TIGA says the UK's gaming industry is the largest gaming in Europe.
Threats to the industry come from countries like Canada and France, which receive tax breaks for gaming development.
It says that the tax change would create over 4,660 highly skilled jobs and trigger millions of pounds in investment in the UK video games industry.
Brian Ward, Senior Vice President, Worldwide Studios, Activision, which recently developed Call of Duty, Modern Warfare 3 said in a statement: "The UK has one of the most capable and creative development workforces, and a long history of innovation and leadership in digital media. However, this leadership position has been lost to other countries that have aggressively pursued job creation and economic diversification via tax incentive programs aimed at games and digital media.
The introduction of Games Tax Relief in the UK would level the playing field and make the UK competitive again.”
Mike Bithell, creator of independent game Thomas Was Alone, and lead designer at Bossa Studios told The Huffington Post: "The economy is treating everyone hard, but it's a shame to see the UK losing its hard earned reputation for excellent, big games. At the same time, from the ashes of these companies some awesome indie studios are appearing, companies which are earning the UK a reputation for innovation and true creativity, only on a smaller scale.
I can absolutely see the Canadian brain drain in action, a good number of friends have made the move."
We're losing some of our greatest minds, and as someone still learning this craft, I'm disappointed to lose these gurus and teachers. More money flowing in to UK games dev, be it in tax breaks or other forms of support, can only help everyone who works within the industry."
Ed Vaizey, Creative Industries Minister has previously written about his support for tax cuts in a blog on The Huffington Post, saying: "Cutting corporation tax, improving the support for new and high-growth businesses, making the tax incentives for investing more widely applicable are examples of the actions we have taken to help industry grow."
Joe FitzPatrick, MSP, and convener of the Scottish Parliament’s Cross Party Group on Computer Games Technology also supports the tax relief, recently saying: "...developers across the UK are losing out on investment to their overseas competitors, where significant government support is in place.”
"The video games sector is a significant employer in Scotland, particularly in Dundee where we have a cluster of developers.”
"The future success of the video games industry is under threat as other countries cut taxes for the sector in order to give their developers a competitive edge.
"The SNP government has consistently supported a Games Tax Relief, recognising the role that it could have in supporting this promising industry, but these powers remain reserved and the UK government has refused to step in and create a level playing field for our firms."
See this week's top ten games sold in the UK below: