Eidos' Ian Livingston says Government must invest to aid industry growth 'or suffer the consequences'
Eidos' Ian Livingstone has issued a tough warning to the Government, saying that the UK games industry will vanish if authorities don't act to properly address rising costs and the industry skills shortage.
Speaking in a Develop Q&A Livingstone, also a spokesperson for the Games Up campaign, said the UK was now the most expensive place on the planet to make a game.
"The Government should address the issues of skills and costs for the UK to remain competitive," said Livingstone.
"The UK is now the most expensive country in the world in which to develop. There are naturally cheap labour markets in Asia and also subsidised markets like Canada. The UK has slipped from third to fourth in world development. Given the heritage of development in the UK, this is a tragedy."
While developers themselves also have a part to play in remaining competitive, the Government must look to support them as well, he said.
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"Clearly developers need to attract the best possible talent they can, ensure they have access to working capital and have the best management to run projects to budget and schedule in a very competitive landscape. And if they can create (and retain ownership of their) valuable IP, so much the better. As far as publishers go, there isn’t really any obligation for them to ensure the UK remains at the forefront of world development. Publishers want the best games from the best teams at the cheapest price. They go to wherever that deal is. Currently it is Canada that is the hot spot and hence it is up to Government to make it attractive for them to operate in the UK.
"Whilst the UK Government does nothing, developers will continue to shut down or be acquired by overseas companies who see greater long term value in our talent than we do ourselves. The Government needs to invest in this valuable Creative Industries asset or suffer the consequences."
To read part one of the interview click here.
I agree totally with Ian. But unfortunately games are just part of the malaise. The only industries this government seems to sunderstand and support are financial services (however poorly they perform), the wholesale of our industrial and manufacturing heritage to foreign PLCs and raising money from petty motoring offences and the like.
I spit on them from a great height as they continue to sell OUR national family silver and tax us for the privelege.
And I hold them personally responsible for allowing their condescending, unknowing, disregard for small business to totally disempower MY industry in MY country.
They owe us everything.
As well as giving us some tax breaks the following policy changes would also benefit UK developers as a whole:-
a. Allow consultants to work for more than one year exclusively at the same company without having to become employees.
(This policy (which existed under the previous government) was reveresed within a year of Labour coming into power to clamp down on wht they saw as tax dodging mainly in the IT and building trades. The result being that any developers working on a project with more than a year development time (ie: all non-casual games) have to be employed by the company on salary, sickness leave, pensions, health and safety etc etc. Rather than be on a fixed price for the job regardless of time. This shift meant that (a) it was no longer possible for a development company to know their costs of developing a game regardless of overrun of time, (b) it is harder to ditch a bad worker as soon as a project finishes. (c) the workforce becomes inflexible and constant even though often a project only demands 100% of the workforce for less than 50% of the time.
In short we would save a lot of development money if we could revert to most people developing a game being consultants (and it would be better for the key developers in the team too as it is easier for them to negotiate their own price on a job by job basis)
b. Help set up some sort of regulated royalty reprting from games publishers to developers, simliar to MCPS and PRS n the music industry.
(There used to be a time about 12 years ago when royalty statements frequently did not have ZERO written at the bottom. Nowadays many developers do not even bother to negotiate for royalties, in the same way that they do not believe in the tooth fairy. More transparent and standardized roylaty accounting would help to solve this problem without a small developer having to send in a top five firm of auditors as if it were some heavyhitting PLC.
Royalties are the lifeblood of development companies, they are the extra money you do not account for and they allow you to feel good and grow as a company.
c. Standardization of a royalty system for distribution within development teams.
(More controversial, but workable with the above 2 policies in place is the mandatory setting aside of a percentage of any royalties coming in to the development company for distribution within the development team. This can easily be administered by using the consultancy rate paid to the developer on the game as an advance against his own alloted share of royalties.
Such a policy (i) means that should a game do well everyone involved benefits (in a much more transparent and accountable way and not from some nebulus profit share pool but form actual game sales)
(ii) means that should he game fail to sell well enough then there are no roylaty payments and the development company loses no more money than the concultancy fees it agreed in the first place.
All anyone ever wants from their work is:-
(a) recognition for the work they do
(b) enough money to feel safe on a day to day basis
(c) the chance to earn something extra if it all goes well
Some wise words from others, which I'll add my two pence to.
Having started an innovative development studio (Outerlight), and watched it flail and die after 7 years of hard effort, I have direct experience of the industry, both self-financing & using online distribution, as well as using publisher funded development.
Put simply, the current developer-publisher system is unworkable for developers. Developers are generally getting nothing but their costs paid (especially if work for hire - the most pointless path), while publishers take all the profits (80% of royalty, and the developer pays for the development out of their royalty share?! - what a joke!), and steal the IP, due to their position of strength (holding the money, due to taking 80% for the last 20 years).
History shows us what happens, publishers acquire things, developers go bust.
In my opinion, we need a UK based non profit publisher (who would allow IP retention, and give a fair share of royalties, e.g. 50%), if we want to retain or encourage a development industry. It's that, or look for jobs with publishers.
Only digital distribution gives me any hope, due to the great royalties available (e.g. 50-70% for developers), however, to use that system you need capital to fund the development, which won't suit start up companies.
As a side point, pitching to publishers is a costly affair (demos cost how much - £200k?!), and retaining a team is even more costly. Under publisher systems, developers must be able to find a great team at the drop of a hat, or sustain them without any profits to pay them with. Not a viable proposition.
Oh, we do have the freedom to piddle around with XBLA games, that's what we will be left with at this rate! Innovate with a £1k budget, and compete with a £50m budget to stand out from the crowd?! Good luck!
