Game Over for UK developers

Critical Gamer writes: This article has at its core quotes and statistics from Dr. Richard Wilson, CEO of The Independent Games Developers Association (TIGA), speaking exclusively to Critical Gamer.

The industry has much to thank British developers for. Grand Theft Auto (Rockstar North, formerly DMA Design); LittleBigPlanet (Media Molecule); Project Gotham Racing (Bizarre Creations); Burnout (Criterion); Tomb Raider (the now defunct Core Design); looking further back, Goldeneye 007 (Rare), Driver (Ubisoft Reflections, but then Reflections Interactive), and Lemmings (DMA Design again) to name but a very few. We could in fact fill this whole page with games developed in the UK that have met with huge worldwide success, or have in some other way had an important and permanent influence on the industry.

Our British readers – particularly the older ones – may raise a smile at the mention of games from much older platforms such as the Amiga, Spectrum and C64 such as Skool Daze, Cannon Fodder, Jet Set Willy, Manic Miner, and Dizzy. It was back when graphics were little more than carefully directed smudges on the screen, in fact, that much loved classic Elite was developed. British developers have given the games industry an incalculable amount of revenue and kudos, and players an equal amount of fun, in the past. What can we expect from the UK in the future?

[Pidgeridoo]

Interesting article

[mjolliffe]

NOOOOOOOOOOOOOOOOOOOOOOOOOOOOO OOOOO

[scruffy_bear]

UK needs these Tax breaks, come on Labour do something right before we boot you out

[Christopher]

They should follow France's lead and heavily invest in local technology and development groups.

[Carl1412]

Too right Scruffy. I think it's a given that Labour won't get back in. But one would hope whoever gets in (Idiotic Cameron no doubt) will do something like give tax breaks. Although tax breaks doesn't seem like something the Tories would do.

[mint royale]

Tax breaks doesn't sound like something the tories woud do? They would give tax breaks to the rich at the blink of an eye and sod investment and helping the poor. Its what they do.

[Carl1412]

I meant overall, but still, point taken. I knew what i meant!

[silvacrest]

yeah, i pretty much agree
i would vote labour but i have zero confidence in brown so im gonna have to vote torry

[DemonStration]

Very interesting read. I hope UK developers get the support they deserve.

[scruffy_bear]

The UK developers need these Tax break are they move elsewhere

[Charmers]

Erm no I don't think private companies should be getting tax breaks. The poor tax payer is already subsidising the entire banking industry and I fail to see why they should have to foot the bill for games companies as well.

If UK developers cannot find a way to run a company in the tax system we have then tough. I personally don't care whether my games are made in Canada, Europe, Asia or Timbuktoo as long as the games are made that is the important thing.

[Kushan]

Charmers, that's a very one-dimensional view of the situation. Think of it this way - how much money do you think the likes of GTAIV made? All that money has to go somewhere and it would be better for the UK to get that money than if it went to the US or whatever. The UK, as a whole, makes more money than they would from getting just the tax from this one company.
So you offer a small tax break. Make it cheaper for the company to develop the game there, then it gets released and the UK benefits from additional income. This is why governments give out tax breaks to private companies, because in the end it benefits everyone in the country.

Furthermore, it creates jobs and stimulates the economy, once more that's better than getting a little bit of extra tax money from the company, who feels they may as well just move house to a country that'll gladly let them set up shop with almost not taxation.

[Christopher]

Kushan said it pretty well already, but one of the best ways to improve economic issues is through available jobs which means you need a reason for businesses to stay in the area. And, maintaining certain businesses is a competitive market to be sure, which is why tax credits and other resources are oftentimes provided to ensure that business come to and stay in a region.

Now, the one thing I would offer up against this is that I would place more importance on small business companies with jobs more accessible to the population that tends to be in need of jobs, which isn't programmers, artists, and the such. So, if the UK is focusing on that over maintaining their game developers, I'd completely understand the goal of the government.

[Jdoki]

Charmers, that's a really ill-thought out viewpoint.

Giving tax breaks encourages businesses to set up and trade in the country - the more businesses the more goods are produced and the more money made in 'other' taxes (such as exports). This is turn can lead to keeping taxes lower for the common man.

Tax breaks does not mean zero tax.

[rekonizakilla]

lots and lots of of people could lose their jobs if the gov does'nt give em a break. How would that be good for the economy?

[Charmers]

No it isn't an ill thought out view this country is MASSIVELY in debt and encouraging a "luxury" item with tax breaks is pretty obscene in my view. I would much rather see my tax being used to fund a new hospital that may save my life or more police officers that keep the streets safe or better education that WILL improve the standard of living in this country.

There are plenty of loop holes and tax discretions for companies already and I fail to see why software developers should get more out of the tax payers pocket. If games were a "must have to survive" item then yeah I would say "give em tax breaks" but it is a luxury and in no way should be supported by the tax payer.

There are much better ways to entice companies to move their business to the UK rather than offering them a bribe (which is what a tax break essentially is). But no rather than do anything like that everyone just dives straight in and screams "tax breaks". The common worker in this country is already taxed to the hilt and can barely make ends meet but you guys are here suggesting we should just use more of ordinary people's taxes to give companies that are out to make massive profits FOR THEMSELVES, tax breaks ...... erm no thanks.

[mint royale]

@charmers

You do have some good points but I still have to disagree. Granted certain economic theory states that not helping businesses out will help the most efficient and thus the ones better for the economy (survival of the fittest.) However in the real world small businesses need all the help they can get at the moment and giving out idealistic viewpoints isn't going to help the situation. My friend has owned his own business for the past 5 years and last month due to a lack of demand had to close. 20 people lost their jobs. Thats 20 more families that will suffer and 20 more families that will rely on our already overstretched benefit system. People need jobs now and tbh its not like we are short on police and hospitals so IMO the time for idealism is not now.

The issue to me isn't whether some companies (particularly small ones) need help but who should bear the burden and I do agree with you here - our tax system needs to make sure its not regressive and helps the poorest.

[Charmers]

At the end of the day if the UK was swimming in tax payers money I would say "hell yeah tax breaks for all". However we aren't we are close to £700 billion in the hole. The ordinary tax payer is crippled horrendously trying to pay everything as it is, yet here we are saying a luxury private market should receive tax incentives just because they could take their business elsewhere.

I am sorry to hear about your friend mint royale. A business going under isn't something anyone likes to see. However we live in a capitalist society and we are governed by supply and demand. It isn't a nice or fair system but it is the only one we have. Thankfully in the UK there is some form of safety net for people that lose their job which is better than nothing. However using the tax system to prop up businesses going under is most certainly not the answer.

There are lots of things the government can do to attract businesses to this country and completely avoid tax breaks. There is investing in the infrastructure which not only benefits companies but benefits everyone. Then there is investment in education so that our people have the world class skills companies need and again that benefits everyone.

I want companies in the UK that PAY their way not companies that expect "tax breaks". If you are a normal worker and you get a job you don't expect a "tax break" you expect to pay your taxes. I believe it should be the same with companies. These companies are set up for selfish purposes (not criticising that it is just a fact) a developer starts up because they want to make games to make money so they can be very very rich. So I fail to see why the poor pleb earning the minimum wage should have to fork out their taxes so the developer can get a tax break to try and become rich.

[Christopher]

New businesses mean new jobs.

People with jobs buy more, meaning more taxes and a better economy. Those taxes then go to fund the things you complain about lacking in funding.

Furthermore, people with jobs tend to have better health, reducing need for health care.

Furthermore, increased presence of certain businesses in an area leads to additional focus on those technologies in regards to education (look at California, Washington, and Montreal as examples of this).

Furthermore, people with jobs tend to be involved in a lot less crime, reducing need for police activity.

It sucks, but companies will hire lesser qualified employees at lower wages in a location that will give them the most tax breaks if it charts out to resulting in more profit in the end.

[Charmers]

Tell you what then cgoodno lets get rid of the tax system altogether then. After all if we don't make normal people pay tax then that gives them more money to spend thus creating more opportunities for wealth which in turn will bring in more businesses and thus more employment opportunities.

You see you can make a compelling argument for any "tax break" I don't think companies deserve a tax break. People set up a business because they want to make money for themselves. They aren't setting up a business for "wealth creation" they are setting up a business because they want to become rich (again not criticising this just stating it) now why should someone on a minimum wage be expected to subsidise a company that is set up to make someone else rich ?

I understand where people are coming from with regards to tax breaks and like I said if this country could afford them I would say "hell yeah bring em on baby". However the UK cannot afford them the resources of this country are stretched to breaking point. The bank bail out will cost EVERY tax payer in this country £5000. We simply cannot afford to give companies tax breaks, no matter what industry it is.

I always maintain if a company's main reason for coming to the UK is a "tax break" then seriously they can GTFO. They are obviously NOT committed to the UK and see the UK as a quick smash and grab for the tax break. It has been shown in the past companies abuse these tax breaks.

I love computer games and I appreciate the developers that make them, but I draw the line at expecting minimum wage earners paying tax breaks for them, it is quite an obscene idea in my books.

[Christopher]

You're really overreacting there.

First, no one said to stop the companies from paying taxes, only alleviate it in hopes of gaining more by having them in the area.

Second, companies are not people. Each individual in a company must still pay taxes. Each item that company purchases is taxed. So on and so on.

Third, this isn't about getting game developers to move to UK, but to keep the ones that started in the UK in the UK and to help them grow. Furthermore, even if a new game development company did start in the UK, it would first be because they find the environment a business strength, meaning the UK is a business strength. That's good for UK, good for them, and good for the people of UK who are increasing their job options by the strength of their own country.

You're really looking at this from a very narrow-mindset and not realizing the importance of business presence, especially when that business produces a stable job market that is in dire need.

[Kushan]

Who said anything about removing the Tax system all together? People only said that tax breaks can help an economy/nation because there'll be more people to pay tax. The amount from each person would be less, but there'd be more people so the net gain is greater.
Why do you think Tax breaks like that exist at all? What purpose do you think they serve?

[Jdoki]

The country needs money coming in to the treasury to get us out of the red, and to build those things you are suggesting chalmers.

But a hospital is not a profit making entity; and although a massive chunk of the national income comes from individual taxes, a huge chunk also comes from trade.

By giving tax breaks the government is essentially investing in profitable areas of the UK - which will then generate (and offset) any tax break. This generates jobs which can have a knock-on effect (after all most developers don't do everything in-house), it stimulates the wider economy. Plus the products they make and sell are still taxed at normal rates when sold/exported.

You make it sound like if the government gives developers a tax break then immediately your taxes will be raised. But, here's the thing, interest rates are going to go up, taxes are going to go up. And any tax breaks given to developers is a drop in the ocean compared to the hole we need to get out of.

If the government decides to invest, using tax breaks, in an area of that is going to generate more income for the treasury then that's what they need to do.

Without exports and trade our taxes would be significantly higher.

[Charmers]

You know when someone gets a job they don't get a tax break. They are told to STFU get a job and start paying your way like everyone else. I am saying the same rule should be applied to companies, if they want to use this country and it's resources then they should damn well pay into the pot like everyone else and NOT expect a tax break.

I find the tax break idea an obscene and disgusting idea. The tax payer should not be subsidising private business in any way shape or form. What happens if another country offers a developer a better tax break ? Should the UK match and better that tax break ?

Seriously if the companies compelling reason to start or stay in the UK is down to them getting a tax break then they can just GTFO. The tax payer is already overburdened subsidising a lot of private companies as it is we don't need to be subsidising more of them.

[Christopher]

To use your own stream of thought/analogy, when someone gets offered a job that pays them more at a different company, should they not go and stay with the company that's paying them now just because it's their current company?

Why would you expect the same of a company that can make more elsewhere while providing the same service/product to their customers? No matter where they go, they'll be providing jobs for people who need them and improving economic conditions through those jobs. If there are no concessions made in the UK, then the concessions that other countries are willing to make will win out in the end.

You may not like it, but it's not a matter of the UK government wanting to give people concessions, it's a matter of the need to maintain flourishing businesses in their area or lose out on it all because there's more money in taking the business elsewhere.

[rekonizakilla]

surely you'll agree that tax breaks can be beneficial for business and the economy in certain circumstances. look how much the Irish gov generates out of tax breaks for artists.
At the same time I know where you're coming from.

[LeeZer]

firstly on the matter of creating new talent, yes I can't talk about other countries education systems but I can say for a fact most large colleges and universities do several game and 3d animation courses in the uk now. surely this is helping new talent come through?

Yes tax breaks should happen. I used to live near three developers now I believe there is only one. I've been modding for years since before I was a teenager, I went down the IT route for my career path but in the last few years have thought about gaining qualifications in 3d interactive design and game coding. However I've been hesitant with the knowledge that the chances are if I chose that career it'd have to up root and relocate possibly to another country if things continued the way they are.

How is anyone in this country supposed to make the financial commitment to enter the computer game and interactive 3d animation industry if jobs are far from secure? The simple fact of it is with living costs, course fees and personal computer setup to carry you through 2 - 5 years of education is greater than most people can afford especially with no guarantees

I hope after the general election some commitments are made for one of the largest retail industries, and as the artical staighted we've made some fantastic world inspiring games in the past why not be proud and continue?

[stuntman_mike]

that was funny and informative and made gaming fun and exciting..its now an online only website that is a shell of its former self absolutely soul destroying.

don't get me started on EDGE magazine talk about up its own arse.

[Treyb3yond]

I can honestly see the games industry going the same way as the film and music industries: originality and class acts being forced out by big business of the U.S.A then being replaced by unoriginal tripe (mostly)

They see something they like the look of and they just force a truck load of money down it's throat then rape it.

They seem to love doing this. Not really anything to be proud of.

[Admiral_Benson]

Interesting article and nice to see some interesting debate in the gamer zone aswell.

It's nice to see some UK developers getting the recognition they deserve but at the same time quite sad to see some of gaming history's big hitters mentioned that have since faded into obscurity.

Hopefully the UK developers will continue to produce quality games for many years to come but with the way things currently are with the economic climate in the UK it seems a sad reality that many of them will go the way of the Cores and Rares of the world. Fingers crossed that they don't, it would be a damn shame.

On a happier note: The mention of Cannon Fodder in the article brought back childhood memories, I loved that game!

[stuntman_mike]

a great game, sad as hell when you lose one of your men you managed to keep alive for ages and then seeing his little grave stone.

WAR..has never been so much fun.

[Cubes]

So many classic games have been produced in this little country. Really sad to see some of the developers going under and struggling. Tax breaks would help them out, but due to our mountain of debt I can't see it happening anytime soon. Also sad to see our culture being erroded from gaming, to appeal to the American market. Although the cost of making a game these days means they need to appeal to the Americans more than ever.

[fOrlOnhOpe57]

as a country, we are nothing short of a Third-world dictatorship - I dont recall an election for Brown after Blair quit, does anyone? Doesnt that mean we have an UNELECTED party that just assumed power?
The gaming industry, like so many others, have been neglected by a 'government' that proves itself unfit for office on a daily basis.
The state of my country and what it has for the future of my kids, saddens and scares me.

APOLOGIES for the political rant.