TIGA (The Independent Game Developers’ Association) has been fighting with the UK government over tax breaks for the gaming industry. According to the New York Times, “Because video game makers straddle the lines between software development, the entertainment industry and online retailing, they can combine tax breaks in ways that companies like Netflix and Adobe cannot.”
But this isn’t the case in the UK, meaning that many UK developers are emigrating, heading to countries which provide those types of incentives.
Rocksteady designer Sefton Hill has described this as a talent-drain for the UK gaming industry.
In an interview with CVG, Hill was asked whether or not he thought the UK could be competitive with countries like the US with regard to gaming. Hill responds that many of his friends have gone abroad to find work. Places like Montreal are hot-spots for development because they have incredible tax breaks.
We have great developers here but those numbers are dwindling. You just think about quality developers like Bizarre Creations, Black Rock – people who are making really good games and going out of business. Those guys were so talented so how can that happen? I just think that we could have been in Montreal’s position with that backing from the government. It’s such a big industry now and we could be world leaders.
According to the New York Times article cited above:
In 2008, Ontario paid one game company a subsidy of more than $321,000 for each job to relocate from the United States. More recently, Montreal persuaded the game company THQ to relocate 800 production jobs there, closing studios in New York and Phoenix, with a rich package of incentives.
E.A. has 750 employees in Montreal, where all video game companies receive a tax credit equal to 37.5 percent of their payroll, and has announced plans to hire more there. Over all, 4,500 of Electronic Arts’ 7,600 employees are in the United States.
Canada is seriously trying to pick up gaming developers. Why? Because video game companies are often at the fore of researching new technology, software development, and creating jobs:
The hope was that by encouraging companies to invest more in research, the private sector might create the next Bell Laboratories and inspire the kind of technological breakthroughs that benefit society as a whole.
If this trend of emigration in the UK continues, the UK will fall behind in the gaming industry, and as a result will lose many companies and jobs, and the potential long-term loss of revenue.