PSP World

UK Government Ends Tax Break For Video Game Developers

The next time you play a hit video game, there is a lower chance that it will originate from the United Kingdom. A new conservative government has made deep cuts to spending and one of the programs on the chopping block is tax relief for domestic companies in the video game industry. An editorial from industry spokespeople which appeared in the Financial Times newspaper this week argued that the change will adversely affect the decisions of major games businesses to invest in the UK.

According to the Financial Times, Activision Blizzard, the world's largest video games publisher, said the government's decision to scrap planned tax relief for the sector could threaten the company's intention to invest in the UK.

"For us to continue to invest in the UK there needs to be an incentive provided for us to do so," said Bobby Kotick, chief executive of Activision Blizzard.

"The talent pool in the UK is among the best in the world for what we do. But we really need to see some more incentives. We are seeing great incentives in Canada, Singapore and eastern bloc countries," he said.

The group employs 700 people in the UK, and owns studios in Liverpool and Leamington Spa that have produced titles such as Blur, a racing game, and DJ Hero, a follow-up to its successful Guitar Hero franchise. This week the company joined TIGA, which has campaigned consistently and vigorously for Games Tax Relief.

Sony Computer Entertainment Europe, which employs more than 1,200 games developers and has three development studios in the UK, also said withdrawal of the promised tax relief could affect its plans.

In Canada, games companies can get tax relief of 30-40 per cent on items such as wages. France recently introduced a 20 per cent tax relief scheme for the industry, following which Ubisoft, the French games publisher, boosted its investment.

Sony's Studio Liverpool, makers of the Wipeout series of racing games, will be affected by the change in policy.