January 3, 2011 -
According to a report in UK publication The Telegraph, Activision is so upset over not getting the promised tax breaks that it may shut down a 600 employee-staffed facility. The United Kingdom's rollback of promised tax breaks for video game development was killed in June as part of cost cutting measures that the government had to enact in order to get the budget in order.
Bobby Kotick, Activision's chief executive, called the decision "a terrible mistake."
"There are so many other places that are encouraging the video games industry," he said, according to The Telegraph.
The Activision satellite office is in Slough, Berkshire.
Here is the quote from The Telegraph:
Activision Blizzard, the world's biggest publisher of video games, has described Britain's move to scrap tax relief for the industry a "terrible mistake" and refused to rule out moving its UK operations elsewhere.
Source: Kotaku by way of The Telegraph
Comments
Re: Report: Activision Won't Rule Out Leaving UK
I must say that even with all that I hate Activision, they are right.
I've been both a business owner and a employee, I've seen both sides of the coin. You can throw your tantrums at Activision, say that they only care about profits and that good business should be prepared for changes...
But when tax changes like that, it show two problems: First, it is expensive now. Second, it is unstable.
Doing business in a expensive AND unstable place is stupid idea.
Then people ask: Why he just don't move and stop whining? It is because moving is expensive, if he open the studio in Canada (like many others did after the tax breaks ended), he would have to pay the relocation of the best employees, pay the severance of the worst ones and those that refused to move, and then pay a headhunter team on Canada to find new employees, all this costs boatloads of money, if Kotik manage to make UK rollback, he would save lots of money. If UK does not rollback, he will have to see if all the money moving will be saved in taxes in Canada.
As you can see, this is forward planning, if he moves, he will need to recoup the costs with tax savings, thus if the country that he landed rise taxes he is screwed. Thus back to UK: They planned in UK to have some taxes, a sudden increase is a big problem, maybe the increase is so high that moving is a very attractive option.
--- Maurício Gomes twitter.com/agfgames
Re: Report: Activision Won't Rule Out Leaving UK
Taxes did not increase. The outgoing Labour government promised the industry a decrease, the current government scrapped the plans as part of the emergency budget to sort out the awful state of public finances. So it didn't actually get as far as changing.
However, it isn't all bad news, Corporation tax will be decreasing over the next few years. As you correctly point out, the cost of moving a whole studio to Canada is considerable, so it is somewhat unlikely that established studios will leave. The problem is that the UK is still a less competitive option for setting up new studios.
Re: Report: Activision Won't Rule Out Leaving UK
Activision: losing respect around the world for pure profits.
http://www.magicinkgaming.com/
http://www.killatia.com/
Re: Report: Activision Won't Rule Out Leaving UK
What's interesting here is not that Activision is thinking of moving its UK branch - businesses that have no need to be located in any particular place always go where the costs will be lowest. What's interesting is that Kotick feels the need to complain about the situation. This implies that he doesn't really intend to go and that he's just trying to get a better deal from the UK government.
If somewhere else is cheaper and has just as talented people, why isn't he moving there already? Why the cajoling and whining about it?
Re: Report: Activision Won't Rule Out Leaving UK
I am no fan of Kotick, but I am glad that he is talking before acting in this instance. With him looking to shed Bizarre Creations, that would mean he is accountable for 800 job losses. Enough to raise the ire of anyone in the UK.
By the way, (slightly off-topic) I believe it is the fault of Activision -not Bizarre Creations- that 007: BloodStone didn't sell. They wanted a quickly-churned-out game for which their is no market (no film = nothing to tie-in with). To blame the developers for a poorly calculated marketing move was totally unfair.
Re: Report: Activision Won't Rule Out Leaving UK
It seems that any time there's a success in that company that branc hsi turned into an assemply line to churn out the same game with minor changes.
Re: Report: Activision Won't Rule Out Leaving UK
I agree with this move. If you write out your business plan expecting to pay so much in taxes then those taxes suddenly go up for no good reason, then why not relocate to a more reliable country? It's the same argument that Republicans were using not too long ago. Businesses can't plan ahead if they don't know what their costs will be.
Re: Report: Activision Won't Rule Out Leaving UK
Costs change. If you can't adapt to that, why are you in business? Kotick wouldn't be throwing a temper tantrum if tax increases were scrapped. Instead of being petty, he should be planning for the unexpected like any sensible business person. This is the equivalent of a child leaving his friend's sandbox because the friend refused to give him his toys.
-Greevar
-Greevar
"Paste superficially profound, but utterly meaningless quotation here."
Re: Report: Activision Won't Rule Out Leaving UK
Change in cost is predictable.
Re: Report: Activision Won't Rule Out Leaving UK
Leaving for a more friendly business climate is adapting. It's about the only thing that can be done when it comes to taxes. When it's other costs, you can shop around for new suppliers. When it's taxes you have to shop around for new locations. It's a good business decision no matter what names you call the guy.
Re: Report: Activision Won't Rule Out Leaving UK
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Re: Report: Activision Won't Rule Out Leaving UK
Way to go Bobby! Keep putting profits first and your company will lose all respect! It's highly ironic that Activision was started because they didn't like the way Atari was treating them. Now, they're just as bad as their predecessors.
-Greevar
-Greevar
"Paste superficially profound, but utterly meaningless quotation here."
Re: Report: Activision Won't Rule Out Leaving UK
Was Kotick even in the business then?