'Tax breaks are the only answer to global pressures'

'Tax breaks are the only answer to global pressures'
Michael French

By Michael French

August 1st 2008 at 10:02AM

French Ministry for the Economy says its games subsidies proves power of gaining Government support

With the EC-backed tax credit for French games developers now live, the French Ministry for the Economy has told Develop that courting Government support is the best way for European developers to try and  compete with their Canadian rivals.

Speaking to us during Paris GDC, Laurent Vannimenus, head of the multimedia and audiovisual unit at France’s Ministry for the Economy, said that with the European Commission already convinced games are cultural objects meant a victory over one battle – that is, the cynicism towards games from older politicians – leaving Europe’s game studios to now put pressure back on the studios in other regions which have Government backing.

The French games tax credit was agreed by the EC late last year, and went into force in June. Under the scheme, studios in the country can claim back 20 per cent of expenses – up to €3m a year.

However there is a slight catch: qualifying games need to incorporate cultural elements and not feature prominent sex or violence.

Introduing the tax breaks was in part a response to the subsidies available to developers in French-speaking Quebec region of Canada.

Those same Canadian tax breaks are also being highlighted by the UK-headed Games Up campaign.

“It’s very surprising that Canada can help the games industry in such a big way – whereas we faced a lot of difficulties to do the same thing. I understand why we faced those difficulties, because we don’t want to change the market,” Vannimenus said, pointing to EC rules on market distortion.

“But if we can all use these tax breaks to make Europe more competitive against the US and Canada or even Asia it is a good thing.” He added: “The main work to make the EC accept that video games are cultural is done.

“There is now a good opportunity to attract back the projects which companies like Ubisoft, and others, have placed elsewhere.”

The French Government is taking its support of the games industry very seriously. The regional authorities in Paris have financially backed the shared middleware initiative Play All, while the Government is all pushing developers towards its own R&D tax credits.

Although the French tax credits scheme has only been live for a month, Vannimenus said that already the cultural criteria of the tax subsidies were already “inspiring developers” into thinking up unique ideas that boast a European theme or flavour. He added that, while the EC will take a consultation in four years time to measure the effectiveness of the tax break, he and his colleagues expect the French games development sector to have grown considerably off the back of the Government’s support.