Keeping the doors open has been the primary preoccupation for most small business owners since the downturn of 2008.
So it must have been manna from heaven for struggling digital games firms when they heard Chancellor George Osborne announced in April 2012 that a new games tax relief would be introduced in the UK.
It was a measure that had long been campaigned for and one that was expected to provide a significant shot in the arm to one of the UK’s brightest hopes of long-term economic growth.
It is now closing in on two years since the tax break pledge was first made but still we have no sign of it actually being introduced.
On this occasion, the blame does not lie with the occupant of 11 Downing Street but with the European Commission which has continually put the brakes on the implementation of the UK government’s decision.
The official line is the European authorities are currently undertaking a formal investigation into the case for games tax relief in the UK.
No timetable has been – or is likely to be – published for the probe to be completed and in the meantime inward investment into the UK digital games sector continues to shrink and financially stressed UK-based developers are going to the wall.
This week’s victim was Activision-owned Blast Furnace, a Leeds-based studio which has developed cutting edge mobile titles including the smash hit Call of Duty: Strike Team, where the axe now hangs over almost 50 employees.
Activision is headed up by CEO Bobby Kotick who has long called for tax breaks for the UK games development community. He has also spoken of his concerns that publishers were taking their business elsewhere because of the adverse investment environment in the UK.
Sadly for the workers at Blast Furnace, it appears the chickens that Mr Koticki so feared are now coming home to roost and the UK economy will be the poorer for it.
Industry body TIGA has been the most vocal proponent for the introduction of games tax relief in Britain
Chief executive Dr Richard Wilson a- a regular visitor to Dundee’s digital media cluster – is adamant UK developers are getting a raw deal compared to counterparts in other parts of the world where support has been available for several years.
He said the prevaricating by the EU was hurting the industry and putting the UK’s digital pioneer status at risk.
“TIGA’s research shows the introduction of Games Tax Relief should generate and safeguard over 4,660 direct and indirect jobs; £188 million in investment expenditure by studios; increase the games development sector’s contribution to UK GDP by £283 million over five years and enable the production of culturally British video games,” an exasperated Dr Wilson said.
“Yet all this additional investment, new jobs and new projects risk being jeopardised by the on-going delay.”
I completely understand and share Richard’s frustration.
Whether based in Bell Street or the Bahamas, developers should have a level playing field from which to work.
A new game or app should live or die on the quality of the product in comparison to its peers and not the decisions – or lack thereof – of a faceless pen pusher.
The British games development community – and within that wider framework the Dundee digital cluster – has proven time and again that it has the talent to compete with the very best around the world. Think Grand Theft Auto if you have any doubts.
If that success has come despite the sector having one hand tied behind its back, then think what could be achieved with parity in the development stakes.
The time for some real pressure on games tax relief to be applied in the corridors of power in Brussels has long since past.
A final -hopefully positive – decision cannot come soon enough.