Thursday, 22 March 2012

Uk Games Development & Tax Breaks

2010 - 2011 represented a tidal sea change for Games development in UK & internationally. The closures of traditional studios and AAA content, the rise of digital content and self publishing heralded the change of guard and redrawing of battle lines to win the minds and hearts of the gamer.

Granted the term Gamer, has rapidly expanded to now be inclusive of a large swath of tiered  groups loosely redefined as Core, Casual, Social & Online across a plethora of various platforms and hardware.

Gaming in itself has experienced a massive explosion. When you think back 5, maybe 10-15 years ago gaming itself was seen as a niche hobby undertaken by the core gamer. Then consoles and online gaming changed the scene radically, with the traditional doomsayer heralding the death of traditional PC gaming.  Likewise with the rise in portable gaming and digital distribution, there are some that bemoan the death of traditional retailers (as epitomised by GAME group going into administration), some camps drinking too much Facebook and digital kool aid harping about the death of consoles and another camp evangalising about the future being about mobile smartphones.

The fact is, the GAMING universe is ever expanding and it is a MASSIVE pie, more than enough for every single living human being with opposable thumbs  - from your grandmother to your 5 month old toddler, they are all enjoying interactive entertainment and education so this is truly an exciting time to be in the gaming sphere, with tiers of various game ecologies to co exist (with degrees of overlap)

2012 - The year so far

Fast forward to 2012, and already we have a colourful range of keynotes occuring in gaming history:

  • PS Vita gets launched with a solid lineup of software and modest success. 
  • The new ipad is launched, boasting a "retina display" - although in reality there are no games optimized or built to fully incorporate the upgrades that lurk beneath for higher quality entertainment. In addition, the ipad had a hidden function in the form of a gestural controller to sync with the launch of the eventual Apple TV (launched later this year) - which will further represent Apple's launch into the battle lines traditionally occupied by consoles
  • The eventual sad demise of the GAME group came to fore with GAME voluntarily deciding their stock was now worthless following the withdrawal of stock of all the major publishers, epitomised by the withdrawal of Mass Effect 3  and other EA titles.  The effect of this is still unfolding as GAME seeks to find solution  to repackage valauble aspects of its overall business to resume trading under a new guise (ideally). 
  • Mass Effect 3 faced a large outcry with certain portions of gamers seeking further closure with the game's ending
  • And finally, a first ray of optimism came totally unexpectedly via the UK budget whereby George Osborne announced the formation of a tax breaks for Games, animation and Film industries in teh April 2013 budget. This was followed almost universally by key industry leaders heaping positive praise and cheer (as this represented a U turn from years of govermental rebuttal to the rallying cry to provide a level playing field vs the largely lucrative and immense brain drain of talent overseas)

"Following consultation on the design, the Government will introduce corporation tax reliefs for the video games, animation and high-end television industries from April 2013, subject to State aid approval," reads the official budget report.

The report puts the relief for video games at £15 million in 2013-14, and £35 million in 2014-15.
Tax breaks are a controversial subject and the current cheerleader for its implementation has been the fourfold increase in game jobs, development and economy stimulus enjoyed by Montreal and other related countries eg. France. This in turn stimulates local economy, higher education and R&D, thus pushing forward local technology centres of excellence and future tech.

For now, the report is a welcome potential stimulus of things to come, with some folks even commenting a return to a golden era of gaming renaissance in UK thus putting the great back in great Britain.

For this we have to especially thank TIGA's Dr. Richard Wilson for seeing this through and everyone else involved in this tireless campaign to improve our lot for UK PLC.

UK trade association TIGA, which has long campaigned for tax credits said the news is "terrific" for the regions development sector and help contribute UK GDP by £283 million.
"Tax relief for the video games sector will increase employment, innovation and investment in the UK video games industry," said TIGA CEO Richard Wilson.
By the time these tax reliefs can be set in stone, hopefully they will filter through to the many UK startups and local hubs, that together we can collectively benefit as a nation of carbon neutral, high value networth and exciting interactive entertainment companies, with a few sterling IPs built along the way in the hands of the indies, old guard, and publishers all in it together

Well done folks, this is just the beginning to be great!
Great to be gaming on in UK!

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