UK game-industry aid not Tories' top priority

Tax breaks may come in two to three years if the current opposition wins upcoming election, despite pleas and dire warnings from industry heavyweights.

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UK game developers may be frustrated with the lack of government support for their struggling sector, but shuffling the political deck isn't likely to change that. Speaking in Westminster this morning, Ed Vaizey, the shadow minister for culture and the creative industries, heaped praise on the UK games industry, but admitted that government policy on aid for the games industry would not change were the Conservatives to seize power in the coming general election. Vaizey said assistance for developers would not be "an immediate priority," despite the argued benefits the sector brings to the country.

Opposition leadership to UK devs:
Opposition leadership to UK devs: "We've got bigger fish to batter and fry and serve with chips on a bed of newspaper."

The case for tax breaks was made by a number of UK industry luminaries present at the event. Dr Richard Wilson, CEO of UK development trade body Tiga, said his organisation's calculations showed that a cultural tax break along the lines of that given to the film industry would raise in excess of £400 million ($648 million) for the treasury over five years. These figures were collated at the request of the treasury in 2009 to examine the feasibility of a tax break for video games and were presented just before last year's prebudget report, which unexpectedly snubbed the industry.

Wilson and Richard Gibson, director of consulting firm Games Investor, both made the point that the problems besetting the UK games industry resulted in the closure of 15 percent of UK studios last year. Gibson went on to explain that the 18 months leading up to the end of 2008 saw a 6.5 percent decline in UK industry employment numbers, while in the same period Canada's gaming headcount saw an 18 percent increase, in part thanks to fiscal measures aimed directly at the games industry.

Gibson, however, disagreed that the simple production tax credit modelled after that of the movie industry was the way forward, suggesting that it entrenched existing business models for creation of blockbuster games but was ill-suited to companies attempting to take advantage of the sea changes in the industry towards online, continuous development models.

Chris Deering, Codemasters' non-executive chairman and former head of Sony's European operation, suggested that while the UK industry was "under attack," it wasn't too late to arrest the decline. Using the analogy of the way that the Wii had moved gamers off the couch, he suggested that it was simply time for the UK government to stand up and move around to ensure that the country remains at the forefront of the global games market rather than becoming "a major victim" of sea changes in the industry across the world.

Vaizey did say he was "confident" that something could be done within two to three years in terms of tax breaks and indicated that smaller measures would be looked at in the interim, such as a bolstering of the generic research and development tax breaks. He also suggested that amendments to the current film industry support might be possible in the interim to allow the creative industries as a whole to benefit from the pool of money currently available only to those making movies in the UK.

He reiterated the suggestions that Tiga and the Entertainment and Leisure Software Publishers Association--the UK trade bodies that represent developers and publishers--merge to form a UK Video Games Council along the lines of the UK Film Council, which is funded via the national lottery. This suggestion was met with derision by Richard Wilson, CEO of Tiga, and with scepticism by Keith Ramsdale, an EA vice president and ELSPA board member, though both support the idea of a separate entity along these lines.

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