£188m jackpot for UK video game industry as Games Tax Relief finally approved by EU commission

By March 27, 2014 Press Releases

GTR worth £188m in extra investment for UK games businesses between now and 2019 alone

TIGA, the trade association representing the UK video games Industry, said today that the European Union (EU) Commission’s decision to approve Games Tax Relief (GTR),will lead to an estimated £188m in additional investment for the UK’s game developers over the next five years. This will finally allow them to compete on a level playing field in the global video game market, and decisively reduce the cost of games development in the UK.

TIGA conceived and launched the campaign for GTR nearly seven years ago, and is the only UK trade association that has consistently campaigned both publicly and privately for tax relief for Britain’s games development sector.

It has been a long and arduous campaign, which has had to overcome setback after setback to ultimately achieve today’s decision by the EU and a resounding victory for the UK’s games businesses.

TIGA initially secured the policy in the previous Labour Government’s final Budget in March 2010, only for it to be dropped in the June 2010 Budget by the Coalition Government. Undaunted, TIGA resumed its campaign for GTR, and after another 18 months of relentless work, convinced the UK Government to back the measure in the Coalition’s March 2012 Budget.

However, GTR was then blocked by the EU Commission as it announced a formal investigation into the proposal in April 2013, citing concerns including video games not being culturally equal to film, and thus not deserving of the same or similar tax breaks, in addition to the potential for the programme to distort the EU’s internal market.

TIGA then submitted extensive and compelling evidence to the Commission, co-ordinating its efforts with the UK Government and its partners in the European Games Developers’ Federation (EDGF) to successfully assuage all of the EU Commission’s concerns. This culminated in today’s announcement that the measure has at long last been officially approved and can now be set into motion.
 
Dr. Richard Wilson, TIGA CEO stated:

“This is a superb decision by the EU Commission and magnificent news for the UK video games industry. It is also a striking success for TIGA, for its members, and for the wider video games industry that TIGA represents. GTR will create jobs, boost investment and enable the production of more British video games.
 
“TIGA responded to the EU’s formal investigation into GTR, and built a compelling case which demonstrated that: video games are cultural products similar to other audio-visual creations and so merit support; that the UK video game industry is competing on an un-level playing field because our key global competitors already benefit from tax relief or other forms of government support; that GTR is necessary and proportionate in design, and that it achieves all of these results without distorting trade and competition within the EU.
 
“Our research has demonstrated tax relief for the UK video game sector will increase employment, drive innovation and secure additional investment in the industry. Specifically, TIGA’s research has shown GTR should create and/or protect 4,661 direct and indirect jobs; encourage approximately £188 million additional investment expenditure by UK studios; generate £172 million in new and protected tax receipts to HM Treasury, and all at a cost of just £96 million over five years.
 
“Tax breaks for games production will help the UK fight its way back to the forefront of video game development. It will also help to further rebalance the UK economy away from an over-reliance on financial services towards a highly skilled, high-tech, R&D intensive and global-export focused industry.
 
“This victory, the approval of GTR by the EU Commission is the culmination of a relentless and determined seven year campaign which was created and led by TIGA. The Commission is to be congratulated for this excellent decision. The UK Government, the EDGF, The All Party Computer and Video Games Industry Group in the Westminster Parliament, the Cross Party Group on Video Games Technology in Holyrood, the Labour Party and the Scottish National Party also all deserve full recognition for their ongoing support for this critical measure.

“TIGA now looks forward to working with other interested parties on the implementation of GTR to ensure UK games developers and the wider economy reap the full benefit of this landmark moment in the history of our industry.

“Thank you and congratulations to everyone who helped win GTR for the UK games industry.”

Jason Kingsley OBE, TIGA Chairman and CEO & Creative Director, Rebellion, added:

“When TIGA was founded 10 years ago to represent the interests of UK developers, the vision was to create an organisation that could have a transformative effect on the UK videogame industry.

“Today, that vision has become a reality. TIGA is the only organisation that has consistently fought for Games Tax Relief and deserves full credit for achieving its goal.

“Not only does this show Video Games in cultural terms are truly beginning to be given the respect the medium deserves, it also gives the UK a level playing field and a fighting chance to become a top three game making nation once again.”

More quotes from UK industry spokespeople can be found in the notes to editors section below.

 

-ends-
 

Notes to editors

Vincent Scheurer, CEO of Sarassin LLP and a games industry legal expert:
“In my opinion the final approval of Games Tax Relief is the most important event to occur to the video game industry in the UK since I started working for a games publisher 16 years ago.  Games Tax Relief will provide invaluable support for the industry to enable it to defend itself against state-funded competitors located in countries outside the EU.  It has been a long, uphill struggle, and TIGA had to overcome resistance from both outside and inside the games industry to succeed.  I gave up counting the number of times TIGA was told to drop the campaign because it would “never happen”.  Thankfully TIGA didn’t listen, and continued to push forwards.  The case was overwhelming, and all games businesses in the UK will benefit.”

Mark Gerhard, CEO & CTO, Jagex, multi-award winning game developer, publisher and maker of RuneScape:
“Tax breaks for the British games industry have been a very long time coming, but this is far from being the end of the matter. Studios across the UK need to collectively show that the fight for their introduction has been a worthwhile one by maximising their potential to deliver a robust, expanding games industry in this country. Our industry should be held in the highest regard, strengthening the British economy and fuelling job creation, both things which tax breaks will help reinforce.”

Elaine Green, owner of Nellyvision, an independent studio formed after the Second Life makers Linden Lab closed down in the UK in 2010:
“As a smaller developer dealing with all the challenges small businesses in the UK face whilst also competing against foreign businesses who have been receiving generous tax breaks, this is a break-through moment. As a result of TIGA’s successful campaign, Games Tax Relief will help us reduce our costs, grow our business and ultimately make a greater contribution to the UK economy.”

Chris Kingsley, CTO of Rebellion, an award winning independent UK game developer and digital publisher:
“Thanks to TIGA, the Government and all at the DCMS and the Treasury for their hard work. It will be exciting to see how GTR develops from here. There’s no question it will improve the long term growth, stability and resilience of British games businesses and allow us to invest more in the UK. This support will also encourage greater creativity in our sector, which is essential for building a successful export driven industry and helping the UK games business climb back up the international rankings.” 

Nick Brown, owner, Boss Level, a UK-based indie developer creating massively multi-player games and apps for desktop, mobile, tablet and Smart TV:
“This is fantastic news and huge congratulations to TIGA. Games Tax Relief will make a massive difference to UK games businesses of all sizes. Whether attracting investment or getting challenging projects finished, there’s no area of the game development business this doesn’t help with.”

Patrick O’ Luanaigh – nDreams, an innovative game developer/publisher specialising in virtual worlds and virtual reality:
“Games Tax Relief has proven a make or break issue for many UK games businesses, which is why it’s been TIGA’s number one objective for so long. The EU’s green light is a great cause for optimism for us all. For businesses like mine, which are investing in cutting edge technology like Oculus Rift, with the potential to transform games as we know them today, this gives us a far better chance of shaping the future of our industry, all around the world.”

Jeff Meek, Partner, French Duncan, accountancy firm with specialised games industry experience:
As accountants with a specialism in the games industry, we know the challenges many UK games businesses have been facing, trying to make the numbers add up in the face of subsidised foreign competition. Thanks to TIGA, Games Tax Relief finally means a financially level playing field, and that our industry as a whole will make a greater contribution to UK GDP.”

Trevor Williams, Playground Games, developers of hit racing game, Forza Horizon:
“Our vision has always been to build a development studio which could compete with the very best in the world, creating big budget console games for a global audience, TIGA’s hard fought victory for Games Tax Relief will be a huge help to us in achieving our goal. Many other UK studios which, like Playground Games, want to be the best in the world, now have a level playing field on which to compete. It’s a great day for British business, and a historic moment for our industry.”

About TIGA
TIGA is the trade association representing the UK video game industry. We help developers and digital publishers build successful studios, network with the right people, save money and access professional business advice. We also have traditional publishers, outsourcing companies, technology businesses and universities amongst our membership.

TIGA is 90% funded by independent UK businesses. 80% of our board members are developers and/or from UK owned businesses, and 50% of our board are UK business owners themselves. Since 2010, TIGA has won 16 business awards.

TIGA focuses on three sets of activities:

  • Political representation
  • Media representation
  • Business services
This enhances the competitiveness of our members by providing benefits that make a material difference to their businesses, including a reduction in costs and improved commercial opportunities. It also means our members’ voices are heard in the corridors of power and positively represented in national, broadcast and UK video game trade media.

Get in touch:  

Tel: 0845 468 2330
Email: info@tiga.org  
Web: www.tiga.org 
Twitter: @TIGAMovement
Facebook: www.facebook.com/TIGAMovement 
LinkedIn: http://www.linkedin.com/company/tiga   

For further information, you can also contact:  

Dr Richard Wilson, TIGA CEO on: 07875 939 643, or email: richard.wilson@tiga.org
Drew Field, TIGA Communications Director on: 07720 643 344, or emaildrew.field@tiga.org




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