Video games developers in Dundee and across the UK are celebrating after the chancellor announced multi-million pound tax breaks for the industry in the Budget.
The surprise announcement is a major victory for campaigners, including The Courier, who have argued for a level playing field for the industry in the face of fierce state-aided overseas competition.
In his last Budget before the general election, Alistair Darling announced the computer games sector would be given similar aid to the British film industry, amounting to around £100 million.
Last year for the first time the games industry outstripped the film industry, generating more than £1.73 billion against £1 billion spent at the box office plus £198 million on DVD and Blu-ray releases.
Details of the proposed tax relief for the game industry, which is subject to state-aid approval in Europe, were not announced in Wednesday’s Budget.
However, the so-called Red Book, the Financial Statement and Budget Report (FSBR) which accompanies the Budget, shows no provision for tax relief in 2010-11, £40 million in 2011-12, and £50 million in 2012-13.
The film-makers can claim a tax rebate of 25% for films costing £20 million or less and with 20% cash back for films costing more than £20 million to make.
Last night Scottish secretary Jim Murphy said the chancellor’s tax break announcement was a “shot in the arm” for the games industry in Dundee, which supports 700 jobs.Massive returnAlthough the City of Discovery is already recognised as one of the world’s leading centres for video game design and development, industry leaders were concerned that its success could be undermined by the tax breaks other countries offer to developers.
One of the city’s leading firms, Realtime Worlds, which was responsible for the BAFTA-winning game Crackdown and the forth-coming APB, even warned it might have to consider moving part of its operation overseas to stay competitive.
Realtime Worlds studio manager Colin MacDonald described the announcement in the Budget as “an unexpected but delightful surprise.”
“The UK video games industry is one of the most creative and innovative in the world,” he said.
“This decision will mean we can continue to invest in UK talent and prevent brain drain to our overseas competitors.”
Mr MacDonald said the tax breaks would allow developers to push the boundaries of computer gaming.
He said, “It will make innovation that bit cheaper so we will see more creativity and innovation coming out.
“I think the Treasury should see a massive return for its investment.”
Dr Richard Wilson, chief executive of trade organisation TIGA, said, “This is an inspired decision.
“In backing TIGA’s games tax relief, the government has chosen the future over the past, growth over decline, success over failure.
“Games tax relief will increase employment, investment and innovation in the UK video games sector.
“Our research shows that games tax relief over a five-year period should create or protect 3550 graduate-level jobs, increase or safeguard £457 million in development expenditure and encourage developers to adopt new business models and create new intellectual property.”
He added that UK firms, particularly those in Dundee, would now be competitive in a global market.
“We have fantastically well-trained and talented staff and management teams who have, in some cases, 15 to 20 years’ experience,” he said.
“They’ll be able to look their competitors in their eye and I think they’ll win.”Political unityDundee politicians welcomed the announcement.
City council development convener Will Dawson said, “Dundee now boasts a considerable reputation in the games industry and the tax incentives should help keep the city in the forefront of the technology and maintain and increase jobs here.”
Dundee West MP Jim McGovern said, “We are a world leader in games but we need a level playing field.
“This gives it to us.”
Dundee West MSP Joe FitzPatrick said, “This is crucial if we are going to compete on a global basis as all games are global.
“We need to look at the detail but it is absolutely clear that we won the argument and this is brilliant news.”
Dr Richard Wilson, chief executive of trade organisation TIGA, said, “This is an inspired decision.
“In backing TIGA’s games tax relief, the government has chosen the future over the past, growth over decline, success over failure.
“Games tax relief will increase employment, investment and innovation in the UK video games sector.
“Our research shows that games tax relief over a five-year period should create or protect 3550 graduate-level jobs, increase or safeguard £457 million in development expenditure and encourage developers to adopt new business models and create new intellectual property.”
He added that UK firms, particularly those in Dundee, would now be competitive in a global market.
“We have fantastically well-trained and talented staff and management teams who have, in some cases, 15 to 20 years’ experience,” he said.
“They’ll be able to look their competitors in their eye and I think they’ll win.”Political unityDundee politicians welcomed the announcement.
City council development convener Will Dawson said, “Dundee now boasts a considerable reputation in the games industry and the tax incentives should help keep the city in the forefront of the technology and maintain and increase jobs here.”
Dundee West MP Jim McGovern said, “We are a world leader in games but we need a level playing field.
“This gives it to us.”
Dundee West MSP Joe FitzPatrick said, “This is crucial if we are going to compete on a global basis as all games are global.
“We need to look at the detail but it is absolutely clear that we won the argument and this is brilliant news.”
Dr Richard Wilson, chief executive of trade organisation TIGA, said, “This is an inspired decision.
“In backing TIGA’s games tax relief, the government has chosen the future over the past, growth over decline, success over failure.
“Games tax relief will increase employment, investment and innovation in the UK video games sector.
“Our research shows that games tax relief over a five-year period should create or protect 3550 graduate-level jobs, increase or safeguard £457 million in development expenditure and encourage developers to adopt new business models and create new intellectual property.”
He added that UK firms, particularly those in Dundee, would now be competitive in a global market.
“We have fantastically well-trained and talented staff and management teams who have, in some cases, 15 to 20 years’ experience,” he said.
“They’ll be able to look their competitors in their eye and I think they’ll win.”Political unityDundee politicians welcomed the announcement.
City council development convener Will Dawson said, “Dundee now boasts a considerable reputation in the games industry and the tax incentives should help keep the city in the forefront of the technology and maintain and increase jobs here.”
Dundee West MP Jim McGovern said, “We are a world leader in games but we need a level playing field.
“This gives it to us.”
Dundee West MSP Joe FitzPatrick said, “This is crucial if we are going to compete on a global basis as all games are global.
“We need to look at the detail but it is absolutely clear that we won the argument and this is brilliant news.”