Report: Developers demand UK tax breaks

Senior British gaming industy figures ask for help to stop the Canadian brain drain.

Last month, SCi announced that it was slashing 200 jobs--some 25 percent of its workforce--and dropping 14 games. According to a report in today's Financial Times, the staff cuts are to be mainly in the UK, while the Tomb Raider company will be increasing investment in Canada.

The lucrative tax deals that Canada offers game developers are proving hard to resist for many firms, as shown by the fact that Canada overtook the UK in 2006 to become the third-largest region for game development worldwide.

Calling it a "UK exodus" and a "brain drain to Canada," the FT quotes SCi creative director Ian Livingstone as saying, "The UK has become a very expensive place to develop games. Look at the 20 best-selling games--not one of them is being developed in the UK."

Today the Byron Review was published in the UK. It was a six-month study helmed by TV psychologist Tanya Byron and commissioned by Gordon Brown, the British prime minister, to investigate the effects of video games and the Internet on children.

Kuju chief executive Ian Baverstock commented on the way he thinks the industry is treated by the government. "We make the UK economy a small fortune but are still treated as pariahs. Why they go on giving tax breaks to the film industry but not to us, I don't understand," he told the FT.

The developers call for the UK government to offer incentives including tax breaks to the game developers remaining in the country.

Paul Jackson, director general of the European game trade body ELSPA, added, "The Canadians have driven a tank over the French Citroen and have now parked on our lawn. It is becoming very challenging to keep core development studios here."

For more on what Canada is offering the games industry, and what other UK developers have to say on the issue, check out GameSpot's in-depth feature Crossing Borders part one and part two.

13 Comments

  • galduke

    Posted Mar 30, 2008 8:44 pm PT

    This is sort of Canada's way of getting attention. Watch any show made in Canada and you'll see the country's name and a maple leaf that puts even the grandest "Made in China" sticker to shame, and is matched only by the "Made in USA" sticker on a stars and stripes themed wind chime in the discount bin at Wal-mart.

  • Obliterati

    Posted Mar 27, 2008 2:21 pm PT

    This is sad, but hardly surprising. The British practically invented the electronics industry, but thanks to poor economic choices and goverment incompetence they continue to fall further and further behind in the high-tech fields.

    The video game troubles are just one small part of a very big problem in the UK.

  • quietguy

    Posted Mar 27, 2008 1:58 pm PT

    The UK is going to hurt themselves faster than EA can spew out Madden 2010.

  • Giratina667

    Posted Mar 27, 2008 1:45 pm PT

    Ow,see what finance does?Drives people away or absorbs them.Depressing,just depressing.

  • LosDaddie

    Posted Mar 27, 2008 1:11 pm PT

    makes sense

  • x-2tha-z

    Posted Mar 27, 2008 1:06 pm PT

    Not just developers, I want a tax break too. I'm paying about £500 tax every month ($1000). It's scandelous how much tax everything in the UK has. Tax is the reason the PS3 was £425 ($850) when it was released here.

  • luciferous

    Posted Mar 27, 2008 12:29 pm PT

    Once I finish my portfolio for game art/ modelling I plan on leaving the UK for Canada ...or somewhere equally as tasty

  • MOAN_Z0NE

    Posted Mar 27, 2008 12:22 pm PT

    Yeah all the dev's are coming to Canada and the States because of the UK's taxes....wait till the Dems get the White house...they will have nowhere to run from outrageous taxes.

  • PiNwOrM

    Posted Mar 27, 2008 12:14 pm PT

    VenomRitual: I'm not so sure it's that there's tax breaks in Canada, as it is there is just less taxation overall.

    Rest assured, the taxes for developement will rise. Supply and Demands little sister: If there an increasing workforce, increase the tax. =D

  • connor93

    Posted Mar 27, 2008 12:06 pm PT

    oh well us from the u.k will only lose

  • OMGitsZAL

    Posted Mar 27, 2008 12:04 pm PT

    Tax here is outrageous. >_

  • VenomRitual

    Posted Mar 27, 2008 12:00 pm PT

    i didn't know the different countries had different tax breaks on developing games. dang. good for canada then. sorry UK.

  • Nineball2112

    Posted Mar 27, 2008 11:15 am PT

    You can't blame these companies for going where the business environment is friendliest to them. It's Canada's gain and the UK's loss...

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