Drain image used courtesy of Ctd 2005 on Flickr
There's a good reason that most of the growth in the games industry is coming from places like Canada, France and the US. Tax incentives for video game developers encourage activity in this high value industry, and the UK is missing out on important economic growth as a result of ignoring it. The Independent Games Developers Association or TIGA, the trade body representing UK games developers, has been campaigning for similar tax incentives to be introduced to the UK.
In March 2010 Alistair Darling announced that the Labour government intended to provide the sector with tax incentives, but when the Coalition government took control the idea was scrapped, omitted from George Osborne's emergency budget. This is the reason why the UK is slipping down the rankings for global games development, and why many of its brightest talents are heading abroad for more handsomely remunerated work.
It's a shame, because the UK has produced some top class games. Grand Theft Auto and Lemmings were both developed in the UK by Rockstar North, while Lionhead Studios produced Fable and the Black and White strategy game. Eidos Interactive are a UK games developer based in Wimbledon, developing top games such as Tomb Raider, Hitman, Commandos, Deus Ex, Legacy of Kain, Thief, TimeSplitters, and Fear Effect. That's not to mention Codemasters, one of the oldest surviving British game developers, claiming responsibility for the Colin McRae Rally series, Brian Lara Cricket and Operation Flashpoint among others.
Image used courtesy of meddygarnet on Flickr
Unfortunately it's becoming more and more expensive to develop video games in the UK compared to other countries, which award developers tax breaks. If we're not careful, the UK games development industry could begin to experience the effects of a 'brain drain', with many people considering their options carefully and making the decision to work abroad. Game development is more profitable in other countries, so these firms can often offer more generous remuneration for gaming jobs than companies based in the UK. It means finding the top talent is harder than ever in the UK.
In August 2010 Scotland's biggest independent game developer, Realtime Worlds, went into administration, creating 200 job losses. This is something we can expect to see more of, as game development becomes less profitable to in the UK.
TIGA, representing games developers in the UK, say that urgent action is needed to stop the rot - tax revenues have fallen by £55m, with the sector's contribution to GDP declining by £132m. The global video games market is still growing but the UK, historically one of the best countries for developing games, is missing out on its slice of the action thanks to short-sighted politicians.
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