'It's not too late': UK developers on what tax breaks mean for games

'It's not too late': UK developers on what tax breaks mean for games
Craig Chapple

By Craig Chapple

April 4th 2014 at 3:35PM

Has the UK already lost its competitive edge? We ask industry professionals across the country just what the incentives can do for them

Developers large and small across the UK have welcomed the European Commission's approval of tax breaks as a great boon for the country's game industry.

Speaking to Develop, the likes of Elite creator and Frontier CEO David Braben, Team 17 MD Debbie Bestwick, Bossa Studios co-founder Imre Jele, Jagex CEO Mark Gerhard and Radiant Worlds CEO Philip Oliver have all expressed their delight at getting games tax breaks despite the long delay and battle to get them.

But after years of campaigning and the lengthy delay in getting approval from the EC, is it too late for the UK game industry? We asked the country's top developers what they think about tax breaks, and if they are still relevant for the sector's future.

David Braben, CEO, Frontier
"The game industry is in rude health worldwide, only in the UK there has been an amount of migration of development effort abroad, principally because of more attractive financial regimes. The tax breaks help level the ‘playing field’ and UK companies like Frontier will benefit significantly from it over time. I have always been a big supporter of the UK; it is why Frontier floated here, and why Raspberry Pis are manufactured here. The tax breaks will be very helpful in restoring the balance in our industry. I applaud the current government in finally pushing this through.

"Some of the benefit will be immediate. I suspect there are studios owned by multinational corporations that will no longer look to locate abroad. Others will be able to attract business they would not previously have been able to, as such business opportunities are being considered worldwide, but the real benefit will be longer term, especially to growing companies like Frontier."

Philip Oliver, CEO, Radiant Worlds
"Obviously we would have loved this to happen a long time ago. Even last year when it was first announced by the UK government, would have been better. But it’s here now and at a generous rate and will have a massive positive impact on the future of the UK game development industry.

"The effect will not be felt immediately, tax is a slow thing, but it’ll improve projections immediately making investments more positive and therefore more likely. Within a few years the studios will be feeling the positive financial effect though a combination of improved margins and more competitive rates in international bids.

"Healthier studios will lead to improved conditions for those already in the industry and more prospects for those wanting to join as studios become more profitable and expand.

"I’ve witnessed very tough times, such as when I’ve lost large competitive tenders to government subsidised studios located in other countries. Ultimately this support will invigorate our industry, it will encourage investment, create new jobs and help us rise up the global leaderboard of game developers. I sincerely hope the treasury will see fit to kick start this growth by back dating the tax breaks to last April when they first announced them.

"Today we can celebrate, tomorrow we will create awesome games, creating many new jobs and proving to the British tax payer the value of the UK game industry."

Imre Jele, co-founder, Bossa Studios
"There's a fear that this tax break is 'too little too late'. And whilst I can't say that this view is completely unfounded, I remain optimistic. We have now been given a level playing field to match against Canada and other countries, and I strongly believe that British and European creativity and ingenuity will ultimately prevail. We have a fantastic cultural heritage in storytelling and gameplay, and now the financial boost to fully implement our visions. I also hope that this tax break invites companies and investment to move here, encourages new start-ups to be formed, and brings home the talent we've lost to other countries.

"I believe the effect will be instantaneous. Even though the bank accounts of developers might not see an immediate relief, this change will encourage local and foreign investment. I also expect a general positive mood change, a more optimistic view in the whole game developer community in the UK."

Harvey Elliot, CEO, Marmalade
"They are definitely late arriving, but it’s not too late. We have a multitude of great talent working in the UK game industry, however there are ongoing draws for investment and therefore careers outside of the UK. We can now promote a level playing field and reinforce the UK as the place to craft great games.

"The industry has always focused well on what it does best in the UK – creating exciting and innovative content, however given that many of the budgets come from global organisations it has often looked too expensive to invest in the talent we have here. The tax credits will help – by encouraging the global industry to invest here, by enabling developers to put even more into each of the titles they create, and by reinforcing the value of the game industry as an integral part of the UK economy."

Rod Cousens, CEO, Codemasters
“It is clearly helpful and it is never too late even if it is a reactive measure rather than a pro-active leading measure. It has to be put into context and it is a changing, competitive global landscape and the UK cannot stand still.

“In turn developers will have to review their approach and offerings to take advantage of the schemes on offer and their actions will determine the timing of any benefits.”

Debbie Bestwick, MD, Team 17
"Tax breaks are never too late but we've already lost ground on more receptive government schemes such as the Finnish and Canadians, regardless we are happy for the arrival of the breaks. It's long overdue and as long as its run the way it should be it will greatly help all UK game creators to create more jobs and games."

Mark Gerhard, CEO and CTO, Jagex
“Tax breaks for the British game industry have been a very long time coming, but this is far from being the end of the matter. Studios across the UK need to collectively show that the fight for their introduction has been a worthwhile one by maximising their potential to deliver a robust, expanding game industry in this country. Our industry should be held in the highest regard, strengthening the British economy and fuelling job creation, both things the emergence of tax breaks will help reinforce.”

Stewart Gilray, CEO, Just Add Water
"'Better late than never' to be honest. I’m just glad that common sense has been seen and we can at last move ahead with this. For a small company like ours where we’ve just spent £1.3m developing Oddworld: New ‘n’ Tasty, this type of relief is most welcome. We have 17 members of staff and this will ensure we keep them, and can expand our team, without losing staff to other countries.

"I think it’ll take about a year, Q1/Q2 2015, before it really kicks in, but it’s definitely very, very welcome."

Vincent Scheurer, co-founder, West London Games
“This is great news for our company. Even though we are a start-up, we will be able to claim from our first year of trading onwards, so this will make a huge difference to our business; in particular it will enable us to spend more money on talent in the UK to make our game better. This puts us closer to a level playing field when competing with countries like Canada, which have benefited from taxpayer-funded subsidies for years. We would like to congratulate Fred Hasson and Richard Wilson (and everyone else at TIGA) for never stopping the campaign. It was worth it in the end.”

Giselle Stewart, general studio manager, Ubisoft Reflections
“Thanks to TIGA’s and UKIE’s relentless campaigning, this is a great day for the game industry in the UK. The recognition that the UK contributes culturally unique content and talent to the fastest-growing form of entertainment in the world validates what Ubisoft’s local studios – and all video game developers in the UK – have accomplished and will continue to accomplish. We are equally excited by the potential job creation and economic growth this opens up for our industry and for the UK in general.”

Louis Natanson, Head of the School of Arts, Media and Computer Games, Abertay University
"It’s fantastic news that the UK’s computer game industry will receive tax breaks, following the European Commission giving the green light. It puts games on a level playing field with other UK creative industries like film.

“Tax breaks will help to encourage investment in the UK, and provide a firmer foundation as home-grown companies look to recruit, expand and establish themselves as major international players.

“However, as the game industry itself recognises, tax breaks aren’t a one-size-fits-all solution for the many different sized companies in Dundee and across the UK to thrive and succeed.

“Small companies, like those formed by increasing number of Abertay University graduates, face many other problems to getting a company off the ground including getting the right business advice, gathering enough cash to found a business, and then seeking out the business opportunities for contract work, investment and publishing deals.

“What Scotland and the UK need for future economic success is a sustainable game industry ecosystem, which includes tax breaks, industry-relevant education for students, links with active investors and publishers, business and marketing support, and innovation in terms of how games projects raise investment.

“Tax breaks are very positive for the UK’s game industry, but continued hard work from educators, game developers, industry supporters and government is needed for this high-growth, high-potential industry to reach its full potential.”