Report: Developers demand UK tax breaks

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

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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.

Got a news tip or want to contact us directly? Email news@gamespot.com

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