In a guest editorial on the UK version of the Huffington Post, TIGA CEO Richard Wilson ask the British government to give the game industry a break ... a tax break.
TIGA, the trade association representing the UK video games industry, published a report this week entitled "State of the UK Games Development Sector 2011," which highlights why the government should support the industry: it creates jobs and generates taxable revenue. Wilson highlights three challenges the industry faces in his editorial:
"Firstly, our competitors, including Canada, France, Singapore and the USA all provide national or regional tax relief for games production, which typically effectively reduce the cost of employment and games production. No tax relief for games development exists in the UK. Between 2008 and 2010 employment in the British games industry fell by 9 per cent and annual investment declined from £458 million to £417 million. Conversely, the Canadian games industry has grown by 33 per cent over the same period. The British video games industry is competing with a ball and chain tied to its ankles. A tax break would enable our industry to compete on a level playing field. Yet the Coalition Government dropped TIGA's tax break in the June 2010 Budget.
Secondly, two-fifths of our development studios are held back by a lack of finance. Access to debt, bond and equity finance is difficult because of uncertainty about consumer demand for video games and because of the intangible nature of IP. Bank finance is therefore very unlikely to become a principal source of finance for game developers. Treasury wheezes like Credit Easing may help larger businesses in the medium term but they provide no immediate assistance for creative industries such as games development.
Thirdly, our industry faces recruitment difficulties. Two-fifths of developers have suffered from skill shortages over the last 12 months. This is partly because the domestic supply of high quality graduates in disciplines such as computer science is limited. The proportion of computer science graduates has fallen by a quarter in recent years. These skill shortages are amplified by a brain drain of talented staff to overseas jurisdictions, particularly Canada."
So how can the government help to foster growth? Tax breaks, of course. Wilson is calling on the government to introduce tax relief for games production; the creation of a Creative Content Fund (CCF) that offers matched funding for approved game production projects. and a pilot program where tuition fees for students studying mathematics and computer science degrees are competitively priced in comparison to other degrees to incentivize the study of these subjects.
Wilson ends his editorial by saying that UK game developers are high technology, highly skilled, low carbon businesses that have the potential to succeed in global markets and to contribute to the necessary rebalancing of the UK economy.
"The Prime Minister, David Cameron, called for a spirit of "can-do optimism" in his speech to the Conservative Party Conference in Manchester. We have a can-do games industry. What we now need is a 'can-do' Government."
Source: Huffington Post UK