Games industry investment swings back to the UK

Games industry investment swings back to the UK
Craig Chapple

By Craig Chapple

July 14th 2014 at 11:53AM

Australia and Quebec developers hit by significant funding and subsidy cuts as Nordic Game Program also ends

Games industry investment is swinging back to the UK following the introduction of games tax relief and budget cuts in other regions around the world.

According to a recent TIGA survey, the number of studios in the UK rose from 448 to 620 in 2013, up 38 per cent. And the trade body believes the newly introduced tax breaks will generate and safeguard £450m worth of investment expenditure by UK studios.

“The UK is a highly attractive place to do games business: we have skilled developers, creative studios and a stable investment environment,” TIGA CEO Richard Wilson told Develop. “This is a great time for the UK game industry.”

In contrast, in May, the Australian government cancelled its $20m Interactive Games Fund. It’s been unwelcome news for local developers, including Sanatana Mishra, designer at Assault Android Cactus studio Witch Beam.

“It means we’ll see a lot less projects being started and owned by Australians and a lot more talented developers seeking overseas opportunities,” said Mishra.

“The industry collapse from a few years back was only possible because we had very few Australian-owned studios and even fewer projects, I think the AIGF was doing a great job of helping us build a far more stable industry.”

He added: “I would describe Australia as having a very small and very indie focused industry. It’s not a bad direction, but I do worry about the extremely limited opportunities we have and how that will slow our growth.”

The burgeoning Nordic region, which is still home to some very useful start-up and developer funds, recently lost the Nordic Game Program. PlayRaven CEO Lasse Seppanen, whose studio received a grant from the scheme, has expressed his concerns over the investment initiative coming to an end.

"It is important to note that unlike most other Nordic support the NGP grants have supported culturally valuable games while keeping in mind their commercial viability, too," he said.

"It has been a fantastic opportunity for new developers with potentially market changing game ideas to find esrly stage funding that might not be available from any other source. Over the years the NGP jury has also kept the quality bar very high, as only eight per cent of applicants have received funding.

He added: "I hope there will in one form or another be a continuation of Nordic cultural support. I honestly think it has played an important role in our industry.

Quebec meanwhile has had its generous tax relief scheme slashed to 24 per cent for games not produced in French, and 30 per cent for those that are.

However, a spokesperson for the ministry of Economy, Innovation and Exports has told Develop that publishers Ubisoft and WB Games Montreal will continue to enjoy tax relief of up to 37.5 per cent until at least 2019, thanks to special agreements they have signed with the Quebec government.

A review board on Quebec taxation will be set up during Autumn to “recommend adjustments to tax credits” for the upcoming budget. It has not yet been decided if this could result in a rise in incentives or further cuts for all games studios in the region.

UKIE CEO Jo Twist said that the reduction in some regions of funding and loss of tax schemes has shifted the balance further towards the UK.

“Once we envied Canada’s level of financial support but now I can see the rest of the world looking at our growing ecosystem with great interest and the UK’s games and interactive industry now has a fantastic opportunity as we roll out the new and highly innovative games production tax credit scheme,” she said.

“We worked very closely with government to shape it to the needs of games companies in this country both big, small and micro.

“We made sure it was inclusive, accessible and competitive to encourage more studios to set up in the UK instead of elsewhere.”