What’s happened to British gaming?
The videogame industry in the UK is rather like Manchester City. Not the City of today. No, that’s where it would like to be. We’re talking the City of yesterday when it was slipping down the league because no-one was offering assistance.
Go back five years and Britain was the third largest producer of games in the world but around 2009 it became the fourth and it’s starting to lose its way. Although it still brings in more than a £1 billion each year for the UK economy, many in the industry will say they are being hampered. They want tax relief – the very same sort of incentives which are offered in countries such as Canada and France which hand their gaming industries hefty breaks (to the extent where the Canadian government pays out 37.5 per cent of salaries and offers various tax holidays).
So it’s easy to understand the frustration of people like Oli Christie, founder of mobile app developer Neon Play. He tells me that his company would be larger if the UK was placed on the same level playing field as countries which encourage games developer with lower taxation and incentives.
“If there were more tax relief, we could be bigger than we currently are as we would have a bit more of a comfort zone to recruit to take on more staff,” he says.
“It’s becoming an unlevel playing field and that is an issue. The games industry, especially within mobile gaming is booming and the government must see this as a great opportunity to plug into a huge talent pool and encourage this talent to make the UK their hub for the future.
“The UK is traditionally a games development hotbed, but it could become a cold turkey very quickly.”
A game will typically cost £10m to £20m to make in the UK. In France, there is 20 per cent tax break which can reduce costs by £1m or £2m and in the US state of Georgia, the authorities came up with a 20 per cent tax reduction scheme with a further 10 per cent knocked off for products displaying an animated Georgia promotional logo.
Not that Oli feels developers should rely on tax relief. Of course, they still need to be profitable in their own right but it is not easy. It’s why his company is set to launch a new publishing division called Brightside, working with independent developers and small studios to help publish their apps.
The industry, it seems, needs that sort of push because it has faced financial problems. Realtime Worlds in Dundee closed in September 2010, for instance, and in January, US-based Activision announced it was looking to sell its development studio, Bizarre Creations in Liverpool, despite it producing critically acclaimed titles such as Blur.
Yet Britain has a strong reputation within the video game sector, having produced blockbuster titles such as Grand Theft Auto and Tomb Raider. The industry contributes £1bn annually to UK GDP.
There is a wider issue at stake too. Oli believes there to be a lack of talented graduates and he also feels there is a shortage of mobile games developers. He has called on UK universities to work closer with development studios telling me “average people demanding over-inflated salaries” are threatening the future of the UK videogames industry.
“Universities need to find out what skills developers are looking for, rather than programming for the dark ages,” he says.
“The industry is booming yet very average people are demanding over-inflated salaries and this is not good news.”
Neon Play launched its first iPhone game, Flick Football, in June 2010. Mr Christie says the app immediately made money but he believes the market has since become much more competitive (“new games developers will find it hard to launch in the current climate”, he adds). Perhaps, like Manchester City, it’s time to give it a helping hand to get it back into the major league.
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