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Businesses Government The Almighty Buck United Kingdom Games

Saving the UK Games Industry 128

arcticstoat writes "Following the cancellation of games tax relief in the 2010 UK budget, the UK games industry is now feeling increasingly threatened by Canada, France and some US states that offer tax relief to their games businesses. What's more, it looks as though the R&D tax credits scheme offered up by UK Chancellor George Osborne in last week's budget speech is nowhere near enough to enable UK-based games studios to compete internationally. 'In terms of magnitude, games tax relief would be much more generous,' says Dr. Richard Wilson, CEO of the UK games industry's trade association TIGA, in this in-depth interview about the need for games tax relief in the UK. 'The proposals we've been campaigning for would allow games companies to basically put in a claim for a reduction in corporation tax of between 20-30 per cent on given projects. The R&D tax credits are much smaller in magnitude – we're talking somewhere around 4-5 per cent.' Is this enough to enable UK game studios to compete with the likes of Canada? 'Good grief, no,' says Wilson, 'absolutely not.'"
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Saving the UK Games Industry

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  • by rsilvergun ( 571051 ) on Wednesday March 30, 2011 @01:10AM (#35663210)
    e.g., 'You better give us tax breaks, or we won't give you jobs, hahahahaha'. This is why I'm a socialist in favor of strong central gov'ts. No matter how bad the gov't gets, there's always a tiny, tiny chance they'll turn out OK. Corporations are intrinsically jerks.
  • What games? (Score:1, Insightful)

    by stumblingblock ( 409645 ) on Wednesday March 30, 2011 @02:24AM (#35663518)
    marbles? ping-pong? hide-and-go-seek? dodgeball? Are these games given tax relief?
  • by Wrath0fb0b ( 302444 ) on Wednesday March 30, 2011 @02:31AM (#35663554)

    e.g., 'You better give us tax breaks, or we won't give you jobs, hahahahaha'. This is why I'm a socialist in favor of strong central gov'ts. No matter how bad the gov't gets, there's always a tiny, tiny chance they'll turn out OK. Corporations are intrinsically jerks.

    Let's suppose you then set up a strong central government with socialist policies. And then some other country that you do not control decides to offer a marginally better deal for businesses that locate in their jurisdiction. One would hope that you don't claim the right to force that other country to adopt your sort of policy or to force the company not to do business with them. The worst you can do is forbid them from importing their game they made elsewhere into your country, giving you the triple whammy of pissing of your citizens, denying you sales tax revenue and then having to deal with the porous nature of the internet. See, e.g. the US online gambling ban (and obvious corollary to anything that can be distributed digitally).

    Socialism or central control doesn't solve your problem here at all unless you are really talking about worldwide socialism and one-world-government, about which the less said the better.

  • by johncandale ( 1430587 ) on Wednesday March 30, 2011 @02:52AM (#35663632)
    It's so hard to cut spending because no matter what program you cut, some group and some trade association or citizen group has a vested interest in it. I say good job UK. It's not like video games is a infant industry that needs support. All government funds can do is muck up efficiency. Good games will do well in the UK and great games will get distribution internationally and in the long term, the industry will be healthier and the government will have one less thing sucking at it's teat. Support from the government will only lead to more and more need for support after the first hurrah's, and the industry slowly slides worse and worse. For reference, see every industry ever with government support over the last 50 years
  • by Wrath0fb0b ( 302444 ) on Wednesday March 30, 2011 @03:01AM (#35663670)

    What right does an English citizen who wants to make video games have to move to the US or Canada?

    The absolute right. England is not a prison, you can't hold people against their will.

    I'm not denying them the right to move or pay taxes in my preferred locality but in effect the argument is shifted onto the government to be held hostage by corporations when it should be on the corporations to deal with their locality and accept that taxation is part of the system.

    I don't see any argument being shifted by anyone. A company is free to set up wherever they please. England cannot force an American company to set up shop in London, never could, never will. You are arguing about what has always been the case -- that companies will chose to do business in friendly jurisdictions and that the citizens of those jurisdictions have the right to set those policies in accordance with their preferences.

    The contrary position -- that one national government can coerce a corporation headquartered elsewhere -- is internally unworkable in the case of >2 governments anyway.

    For the record, if a UK game company moved to the US over taxation the best answer would be to simply charge them an additional surcharge to place their games on the shelves.

    Leaving aside that it is totally illegal under existing law to charge different import taxes to different companies importing the same good, the UK isn't a large enough market that this would make a difference.

    In essence it would be passed onto the citizens of your own country but it would be a perfect way to execute protectionism which is definitively different from socialism.

    Given the elasticity of videogame purchases, the cost of a high tax is born by the supplier not the consumer.

  • What? (Score:4, Insightful)

    by ledow ( 319597 ) on Wednesday March 30, 2011 @06:26AM (#35664554) Homepage

    I'm British. I pay British taxes. My short response to this revelation that we don't subsidise the game industry from public funds any more is:

    "Fucking good!"

    My full response is:

    "What the hell? We PAY people from public funds to write computer games just so we can compete with other country's computer games?"

    Of all the myriad taxes, charges, jobs, cuts and everything else going on, this is seriously making the whole UK games industry look like a bunch of whiners.

    How about this - you're running a business. It produces a product. That product is FAR from essential. In fact, it's as much luxury as is conceivably possible to the ordinary man. You build it, sell it, make a profit, pay your staff. Like every other business in the world.

    And I'm assuming these tax breaks don't even run to business software, or healthcare software, or educational software, or the myriad other types of software which could conceivably be useful? No, just games.

    Seriously. You're making yourselves look like arses, in public, in times of austerity - people were smashing up London the other day because the government has made cuts, what do you think they'd do if they thought for a second their tax was going to help write computer video games?

    I'm not one to blame everyone on the recession and yell about how bad people have it but this is just ridiculous. Get off your arse and make a product that sells. Yeah, you might conceivably add a job or two if you were giving huge tax breaks by the government, but so would any other industry.

Adding features does not necessarily increase functionality -- it just makes the manuals thicker.