The Develop Guide to Digital Britain

The Develop Guide to Digital Britain

By Rob Crossley

June 18th 2009 at 1:04PM

The results of the UK Government report are in


1)    Broadband
2)    Classification
3)    Development Tax Breaks
4)    Piracy
5)    Skills & Education



What the report said:
1) The Government is aiming to give broadband access to “virtually every household” in the UK, all with a minimum speed of 2Mb/sec, by no later than 2012.

2) 90 per cent of the UK will receive “next generation” broadband by 2017.

In context:
This broadband access entitlement will be partly funded by the £200 million leftovers from the recent UK switch to digital television. However, the Government needs considerably more money to reach its goals, so every resident and business with a phone line in the UK will be taxed an additional 50p per month.

The Digital Britain report also acknowledged that the UK needs to see speeds far greater than 2Mb/sec, to which the private sector is already leading the way in [see quotes].

Despite this, the report forecasts a “future fibre divide” where only around 60-70 per cent of the population will enjoy fast net access with the remainder left out. Digital Britain proposes a “Final Third Project”, which sets a 2017 deadline for fast broadband access in 90 per cent of UK homes. This will also be part-funded by the 50p charge.

What it means for developers:
Perhaps more than you think. Such growth in high-speed internet access is a necessary step in the potential cloud-gaming revolution.

A general expansion and improvement in net access and speeds will also help stimulate the popularity of services such as Steam, PSN, Xbox Live and WiiWare, as a wider number of consumers become more ingrained in net culture.

It should be noted that the minimum connection speed needed for OnLive is 1.5Mb/sec, with its HD option requiring 5Mb/sec. David Perry’s Gaikai system hasn’t revealed its speed requirements yet.

Key Quotes:
“This is a clear agenda for change in a sector that’s changing very fast.”
– Lord Carter, author of the Digital Britain report [1].

“The 2mbs is fine, but they haven't mentioned upstream and latency, and that is critical for people who play games.”
– Andrew Ferguson of broadband comparison site [1]

“Next generation fixed fibre and cable networks offer not just conventional high-definition video entertainment and games, but potentially more revolutionary benefits for our economy and society.”
– Digital Britain, pg48/pt6

“While the competitive threat of cable means that the case for upgrading the copper network to fibre is more easily made, the business case for investment in the other half of the country is challenging. In particular, the costs of deploying fibre rise steeply in the more rural areas – the final third.”
– Digital Britain, pg50/pt14

“Today Virgin Media is able to offer 50Mb/sec bandwidth to 7 million homes, and aim to complete roll-out to their current network footprint of 11 million homes by mid-Summer this year. They are now trialling a 200Mbps product.”
– Digital Britain, pg60/”UK”

“The report's funding recommendations, which include a paltry 200 million pounds of direct funding and a vague mixture of other proposals, seem... wishful tinkering.”
– Christopher Bland, Former BT Group Chairman


What the report said:
The Government will use a “strengthened system” of game classification which will be based on the Pan European Game Information (PEGI) standard.

In context:
Soon the UK will drop its BBFC games ratings and progress with PEGI’s. This need for a single classification and labelling system was outlined in last year’s Byron report.

Developers have consistently praised the PEGI system, not least because it allows for self-declaration. This process would lead you to believe that, from now on, a developer like Rockstar can declare a rating on what age certification Manhunt gets, with the PEGI system either approving or not.

Yet in a twist of fortunes for developers, the Video Standards Council has been called in to act as an enforcer. The group will oversee ratings and will be given the authority to ban games that don’t meet guidelines, as well as crack down on developers who may try to exploit the self-declaration process.

Furthermore, MCV has revealed that the VSC is now hiring three content experts – a clinical psychologist, a media psychologist and a media lawyer – to ultimately decide if a game should be banned from UK retailers. Games suspected to have fallen foul of the Video Recordings Act will ultimately be sent to the group for review.

In regards to online content control, meanwhile, a number of “safeguards” will be established to “help parents and children determine what content is appropriate” These measures range from a seal-of-approval system for “content filtering” software, to the nascent PEGI Online system.

What it means for developers:
Proposals for a universal classification system were raised with consumers in mind, and a wholesale shift to the PEGI system is not likely to create a significant change in the way developers think about games. Unless, perhaps, if a developer’s content is considerably mature.

Early plans indicate that developers will be given the power to self-declare a rating for PEGI to consider. With all games now going to one body for approval, key to how deep and failsafe this process is will depend on the number of staff available at PEGI.

The BBFC has previously criticised the scarcity of people available to evaluate the PEGI system. “There are two people in the video standards council who check the PEGI system in the UK,” the group said last year [1].

However, the VSC authority to monitor the process is clearly a necessary measure in ensuring that submitting companies don’t try their luck. 

Meanwhile, the use of a three-person expert panel to enforce game bans is one of the most crucial changes affecting developers. The BBFC had only banned two games in the UK before. Both bans had were relinquished on appeal. The VSC is already suggesting that this new ‘execution panel’ will reduce the chances of game bans being successfully appealed.

Key Quotes:
“We have selected the Enhanced PEGI system, as it combines the best of a pan-
European self regulatory system designed specifically for video games.”
– Digital Britain Report, pg204/pt75

“[The PEGI system] has the flexibility required to adapt to the challenge of rapidly-evolving technology in the games sector and will be highly effective in the online world.”
– Digital Britain Report, pg204/pt75

“VSC will exercise this new power independently of the PEGI system, providing a 'fail-safe' for the UK - protecting children through PEGI and addressing UK-specific sensibilities by refusing classification of any game which falls foul of the Video Recordings Act. This decision is the right one for consumers in the UK.”
– Baroness Shepherd, president of the VSC [1]

“The BBFC has only made two attempts to ban games before – one in the mid-90s with Carmageddon, and one ore recently with Manhunt 2. But both were turned over on appeal. If we ever come across a game that might fall foul of the Video Recordings Act, we’ll turn to this specialist advisory panel – which will be made up of a media lawyer, a clinical psychologist and a media psychologist. We think it’s a good proposal, and it will help avoid turnovers of our decisions coming on appeal.”
– Laurie Hall, secretary general of the VSC [*]


What the report said:
The government has “committed to work with the industry to collect and review the evidence for a tax relief ”.  These plans are in place to “promote the sustainable production” for “culturally British video games.”

In context:
Of all Digital Britain’s outlined measures, the proposed review for game tax is probably the most contentious.

The Labour Government has gained a reputation in the last several years for delaying decisions it hasn’t wanted to make. Perhaps rather tellingly, the Government has in the past few years been accused of delaying a decision in this exact topic.

Back in 2007, the Government attempted to lobby the World Trade Organization to end Canada’s generous subsidy system. Over a year later it became clear that the WTO wouldn’t have the authority to execute such an act.

“I think it was unanimous that the plan was doomed to fail,” said David Braben, speaking to Edge in February, “but it wasn’t set up to actually challenge Canada. It was a delaying tactic, where the government didn’t have to do anything while at the same time be seen to do something.”

Many critics, including of course the shadow cabinet, have accused the Digital Britain report for holding off a number of key decisions [see quotes].

Delaying tactic or not, industry group Tiga is delighted by the measures outlined in the final Digital Britain report. In an interview with Develop on Tuesday, Tiga CEO Richard Wilson said the announcement of a review was a “major step forward”.

“We weren’t getting this a year ago, two years ago, three years ago,” he said. “In the past we’ve had some Government ministers suggest that if developers don’t like the tax regime in the UK they should simply leave the country. So this really is progress.”

The measures certainly continue to convey a general change in perception on videogames throughout Westminster. The interim report made – literally – just one brief mention of the videogame sector. This full report offers, in bold, written plans to review reforming the game tax system, expressing its respect for the medium [see quotes].

The timing of the taxation review process will reveal just how serious the Government is. With a general election due in Spring next year, there has little time to spare.

What it means for developers:
UK developers should, at the very least, feel proud that their lobbying has had an affect in Westminster.

Regarding the tax break system itself, nothing concrete is set. The Government has asked for more time, during which publishers and UK developers will continue to move their work to cheaper talent bases, while bigger vacuums will be created in the UK development workforce.

Thanks to a number of groups and bodies, particularly Tiga, the relationship between the Government and the games industry has never been tighter. As such, there has never been a more likely time for Westminster to answer the calls of the development community. Fittingly, such a call has never been more needed.

Furthermore, if tax breaks are introduced to the game sector, there is a chance that they will only be available to a certain type of game. As the Digital Britain report states:

“In film, a system of cultural tax credits has long helped to sustain a wide range of films that speak to a British narrative, rather than the cultural perspectives of Hollywood or multinational collaborations. Other countries such as Canada, for similar reasons, extend the model of cultural tax relief beyond the film industry to the interactive and online worlds.”

Bearing in mind that the Paper stated that a review was being considered for “culturally British video games”, there may be a real chance that any game tax breaks will shift which types of games are developed in the region.

Key Quotes:
“Electronic games have a significant role in Britain’s digital content ecology and in our international competitiveness.”
– Digital Britain Report, pg129/pt101

“[The games sector has] the same capability as the more traditional sectors, such as film, to engage us and reflect our cultural particularism.”
– Digital Britain Report, pg129/pt101

“[Games] may in future have a cultural relevance to rival that of film.”
– Digital Britain Report, pg129/pt101

“Digital dithering from a dated government.”
– The Conservative Party

“While it’s not a commitment to roll out cultural tax breaks, it’s a huge step forward. I hope the industry can work with government to make [the tax breaks] happen.”
– Rick Gibson, Games Up co-founder and Director of Games Investor Consulting [1]

“The talent base [in the UK] is being eroded. Partly by people going overseas, and partly by the increased tendency to outsource artwork, meaning we're bringing on less junior artists ourselves”.
– Fran Mulhern, industry recruitment consultant, writing in the reader comments section of Develop’s Tiga response story.

“The UK games industry continues to make a significant financial, creative and cultural contribution to the UK, but is facing particular challenges.”
– The Digital Britain interim report, published in January, and its only mention of the games industry

“UK games development is predicted to drop gradually down the world rankings. In 2009, on our current trajectory, the UK is expected to fall to 5th behind Canada and, for the first time, South Korea. China will climb fast up the global rankings to appear in 6th place in 2009 and 4th by 2010. While our major competitors’ territories will grow, analysts claim the 8% growth rate in the UK’s development employment since 2006 will not be maintained.”
– Digital Britain Report, pg128/pt98


What the report said:
The government wants to cut down unlawful filesharing by 70-80 per cent in the UK within two yearrs.

The government denounced the use of filesharing, but added that most people “much prefer not to do wrong” if given a reasonable choice. It has therefore launched a wide-ranging solution on illicit filesharing that spans ISP monitoring, education, and stimulating the growth of legal markets.

In context:
Central to the government’s fight against piracy is the new role given to the independent regulatory body, Ofcom.

ISPs have always argued that it is not their job to hunt down illicit file sharers who use their internet channels. Ofcom will now be able to enforce those ISPs to find and contact persistent piracy offenders. Those that illicitly download a noticeable amount of copyrighted property will get a letter through the post, requesting they desist.

Twelve months later, after handing out said notifications, Ofcom will examine whether the system has worked. The body will count the total number of people it sent a letter out to, and add up all their illicit filesharing usage. If there is a 70 per cent reduction in illicit filesharing use, things will continue as planned. If there’s anything below this target, Ofcom will be given new, more aggressive powers.

After an unsuccessful twelve months, and a government consultation, the group will eventually be able to reduce the speed of users’ internet access, block off certain addresses that allows access to torrents, and cap bandwidth use. The Digital Britain report was careful not to use the word “banning”, after backing away from France’s controversial ‘three-strikes’ system.

Separate to this twelve month system, Ofcom has the power to identify the “minority” of major piracy offenders, so that content holders have better opportunities to sue them.

Aside from dealing with punishment, Digital Britain also promoted the use of innovative online services – like Steam – which aim to make the legal choice the easiest choice.

What it means for developers:
For content owners, developers and publishers, piracy remains the single most important issue raised in the Digital Britain report. Games like Spore have reportedly lost close to half of their total market through piracy.

Yet illicit file sharing remains a global problem, not a UK one. Even if the Paper’s ambitious plan to cut piracy in the UK by 70 per cent was met, it would fail to have a noticeable effect on hugely popular and accessible game torrents available around the world. The UK could, however, be a model of success for other nations to follow.

Yet people who illicitly download videogames also tend to be the people who know how to mod a console, how to use a crack file and how to find a keygen. They are embedded in a culture which seems more resistive to a warning letter through the post, as much as they have been resistive to all copyright protection measures in the past.

Game piracy remains an ongoing arms race, with a community of modders brought together with a unified challenge to breech the defences of sophisticated hardware. Killing this skewed outlook is a crucial in solving piracy as is providing easier legal services.

The goal to eradicate 70 per cent of piracy across the UK within two years has repeatedly been criticised as overly ambitious. Coupled with this, the measures in which the Government seek to do so have already been criticised for being too easy-handed [see quotes].

Key Quotes
“We are disappointed that bandwidth squeezing [will only be] introduced after notice sending has failed and after further consultation. The 2009 Digital Entertainment Survey indicates that simply sending warning letters would deter less than a third of those who illegally file-share.”
– Lavinia Carey, Director General, The British Video Association

“We see online piracy is wrong, unacceptable. Creative companies, rights owners, individuals, have a right to protection, and we wish to put in place a legal framework that provides them with those protections.”
– Lord Carter, Digital Britain Author

"There are no votes and no financial incentive to re-run a Pirate Bay trial in Britain. Users are technically savvy and, even if challenged, many will simply set up further user accounts or sign up to overseas ISPs. None of the proposals in the Digital Britain report, nor our current copyright laws, will change what users are doing."
– Robin Fry, Copyright Agent, Beachcroft law firm

“The reality of this all is that it isn't going to happen.”
– Charles Arthur, Technology Editor, The Guardian

“Content providers are experimenting with a wide range of business models [such as] experimenting with ‘freemium’ models, whereby content is initially offered for free and supplemented with a tiered pricing structure for premium use. This allows the content provider to take the best of both worlds by attracting mass audiences at one end, while at the other end retaining dedicated users who would be willing to pay for additional features.”
– Digital Britain Report discovers free-to-play, pg120/pt68


What the report said: 
The Government will strongly support graduate and post-Graduate courses that feature ‘hard’ Science, Technology and Mathematical skills.

The Government will consider a new Usability Centre for Video Games.

In context:
The refocus on hard sciences is in fact part of a wider shift in the UK’s Higher Education Framework – with a new emphasis on meeting recognised skill gaps.

The announcement marks a positive response to the ongoing concerns from within the UK games industry, which many times criticised the current Higher Education courses for not arming the industry with the best-trained talent.

“Universities are not producing enough of the type of people we need,” said Eidos life-President Ian Livingstone back in January. “‬The industry needs mathematicians,‭ physicists and artists.‭”

As well as focus on a new set of courses to aid the industry, the Labour government’s Usability Centre for Video Games is being considered for use as a “national resource” with all UK developers able to use the available facilities.

“The primary aim of such a Centre is to address issues around skills development offering graduates the work related training necessary to enable them to secure their first job in the industry and helping to bridge the current gap,” said the report.

What this means for developers:
A better selection of graduates will slowly trickle in as ‘hard’ sciences gain more prominence in UK Universities.

While Abertay University in Dundee remains a central education centre for the industry, additional connections to academia have always been vital. The proposed Usability Centre for Video Games, if it is indeed greenlit, would further train students with more relevant skills and experience in game production.

Tiga CEO Richard Wilson told Develop that the new skills proposals were encouraging for development studios:

“So often, when we talk about skills shortages in the games industry a lot of the debates seem to revolve around games courses. So it’s really good to see the Government recognising that some of these more traditional ‘hard’ sciences are really important to the sector.”

Key Quotes:
“Instability and lack of adequate skills provision threatens to undermine the growth of the UK games industry, damaging the UKs position in this growing sector.”
– Digital Britain Report, pg128/pt95

“UK studios are expressing concerns about the loss of experienced staff, targeted to move to companies in the US and Canada.”
– Digital Britain Report, pg128/pt95

“There are something like‭ ‬81‭ ‬courses in the‭ ‬UK dedicated to computer games,‭ ‬but universities get paid for putting bums on seats and they’re turning out students who know all about the history of games,‭ ‬but they can’t make them.‭”
– Ian Livingstone, Eidos life-President, Speaking in January at the Future Pro.Manchester event.