Dundee will lose its share of the global video games market expected to grow to more than £46 billion this year unless tax breaks for games firms are introduced, it has been warned.
A report by Gartner Inc published on Wednesday said it expects the games market to grow 10.4% between 2010 and this year. Spending on video games should increase in coming years so that by 2015 worldwide spending will reach £69.9 billion.
Despite the increasing value of the video game sector to the UK, the coalition government has still, so far, refused to rethink its decision to scrap tax relief for games firms.
Games developers and campaigners warn this puts British companies at a disadvantage next to those based in countries that offer similar benefits.
Dundee West MP Jim McGovern said, “This report increases the pressure on the UK Government to start acting to support our computer games industry. In the last month Ireland has announced it will introduce tax breaks and Pennsylvania became the 17th US state to do the same. Now this.
“When this report says the global industry increased by 10%, our industry continues to shrink. That isn’t good enough. The industry will be worth $112 billion by 2015 we must fight to have a share of that.
“There is much more the UK Government could be doing to make this happen and they are not doing it.”
Gartner’s research showed that although spending on hardware such as consoles is expected to increase by just under $10bn between 2011 and 2015 to $27.4bn, spending on online gaming will increase far more rapidly.
By 2015 it is expected that around $28.2bn (£17.6bn) will be spent annually on online gaming, fuelled in part by the growing popularity of smartphones and tablet computers such as the iPad.MobileGartner research analyst Tuong Nguyen said, “As the popularity of smartphones and tablets continues to expand, gaming will remain a key component in the use of these devices. Although they are never used primarily for gaming, mobile games are the most downloaded application category across most application stores.”
Last year Dundee’s leading games firm Realtime Worlds went bust after its APB failed to enthuse gamers. As well as requiring users to buy a copy of the game, it also required people to pay a monthly subscription fees a payment model the Gartner report says is unlikely to survive.
It claims that “freemium” pay models will take over, where the game is given free but is paid for through in-game advertising.
Dundee has become Scotland’s video game capital thanks, in part, to Abertay University’s groundbreaking courses in video game design.
Dr Louis Natanson, of the institute of arts, media and computer games at the university, said, “With so many people carrying portable gaming devices around all day, we’re seeing a major shift in the types of games people play and the way they play them.
“People who might not consider themselves a ‘gamer’ and don’t own a console might still spend a few hours each week on fun little games like Bloons by Dundee’s Digital Goldfish or the Doctor Who games created by Tag Games.
“The opportunity for new companies to be formed and to create worldwide successes with just a few members of staff is something completely new for the industry, and it’s a trend the computer games education at Abertay is consciously set up to train students for.”