Employment
in French Games Development Sector Grows by 500 but declines by over 1,000 in
the UK over 2008 – 2011
French
Video Games Tax Credit is a net Revenue Generator for French Government
TIGA, the trade
association representing the UK video games industry, said today that the
French video games tax credit helped games development companies grow by 20
period over a period during which British games development declined by 10%.
The French experience demonstrates that a carefully focused tax break for games
production could boost the UK games development sector and support the wider
economic recovery.
New data reveals that:
Job growth linked to tax credit: After introduction of a tax credit in 2008, overall
numbers of people working in the French games industry rose from 3,000 in
2008[1] to 5,000 in 2011[2], and numbers of development staff rose by 500
from 2,500 in 2008 to 3,000 in 2011. Conversely, employment of development
staff in the UK games industry, which does not benefit from a tax credit, fell
by more than 1,000 jobs over the same period.
Brain
drain addressed by tax credit:
64 per cent of French companies that benefited from the video game tax
credit stated that the measure had encouraged them to bring jobs back to
France, equating to 1-5 jobs for 53 per cent and 20-50 jobs for 33.7 per
cent[3].
77 per cent of UK studios in a new TIGA survey think
TIGA’s proposed new Games Tax Relief will trigger headcount growth and 92
per cent think new investment will be triggered by a new Games Tax Relief.
Tax credit generated return on investment for
government: Total French Government tax receipts
from the tax credit were €63.4m versus the cost of the tax
credit of €38m, a 1:1.7 return on investment[4].
Tax credit drove up games development investment: For each euro of video game tax credit paid in
2009, €6.7 of expenditure was generated in the French game development industry[5].
To develop their projects, studios have to bear the
risk of the initial design phase. These first few months are financed from
their own funds or from borrowing and are a significant cost for the company.
The French video game tax credit received for previous projects gives studios
greater financial flexibility between projects (between delivery of the last
project and payment for the next) and enables them to finance design of future
projects while keeping employee numbers stable.
Dr Richard Wilson,
TIGA CEO, said:
“The evidence from France shows that the French video games tax credit
creates high skilled employment, benefits projects large and small, reduces
sub-contracting overseas, enhances studios’ working capital, incentivises
inward investment and more than pays for itself.
TIGA is advancing the case to HM Treasury in
the run-up to the March Budget that a carefully focused Games Tax Relief will
have similar positive consequences for the UK video games development and
digital publishing sector and for the wider economy.”
Commenting on the impact of the French tax credit,
Guillaume de Fondaumière, Co-CEO, Executive Producer of Quantic Dream,
said :
“France’s tax credit
for video games production has helped to increase employment in the French
games industry and has improved cashflow for small development studios. The tax
credit has helped to revive the French video games development sector. France’s
experience shows that a tax credit for games production is good for developers
and good for the wider economy.”
Nicolas Gaume, co-founder and CEO at Mimesis Republic and President
of the SNJV (France's National Video Game Syndicate), said:
“The video games tax credit has created jobs and boosted investment in
the French video games sector. It has enabled the French video games sector to
compete on a more level playing field. Crucially, the experience of France is
that a tax credit for games production more than pays for itself and produces a
positive return for the French Government. The UK would be wise to introduce a
similar tax credit to enable the UK games development sector to prosper and to
grow.”
Notes to
editors:
The French video game
tax credit was established in 2008 to support video games that have a cultural
aspect to them. Games must have a high level of artistic creativity and
technological innovation to qualify. The tax credit enables eligible games
developers with a development budget of at least 150,000 euros to deduct some
of their production expenses.
The tax credit is 20 per cent of the total amount
of eligible expenses incurred by the company for the approved video game. A
maximum of €3 M is allowed per company per financial year. The total amount of
tax credits awarded is estimated at €13.9 M for 2008 applications and €11.5 M
for 2009 applications.
The amount forecast
at the moment for 2011 applications is estimated at between €6.5 M and €7.5 M.
Between its creation in 2008 and the end of July 2010 the CNC received 189[6] applications for approval
and awarded a video game tax credit to 81 of them, i.e. a selection rate of 42
per cent.
About TIGA:
TIGA is the trade association representing the UK’s games industry. The
majority of our members are either independent games developers or in-house
publisher owned developers. We also have games publishers, outsourcing
companies, technology
businesses and universities amongst our membership. TIGA won 10 business awards and was
nominated a finalist for 9 other awards during 2010 and 2011. In 2010 TIGA won two business awards including
‘Trade Association of the Year’ from the Trade Association Forum.
In 2011, TIGA
won eight business awards including ‘Trade Association of the Year’ from the
Trade Association Forum, ‘Outstanding Organisation’ from the Chartered
Management Institute and two Global Business Excellence Awards, including
‘Outstanding Marketing Campaign’.
Richard Wilson won the ‘Leadership Award’ from the Trade Association
Forum and the ‘Outstanding Leader’ award from the Chartered Management
Institute.
TIGA is an Investors in People organisation.
TIGA's vision is to
make the UK the best place in the world to do games business. We focus on
three sets of activities: political representation, generating media coverage
and developing services that enhance the competitiveness of our members.
This means that TIGA members are effectively represented in the corridors of
power, their voice is heard in the media and they receive benefits that make a
material difference to their businesses, including a reduction in costs and
improved commercial opportunities.
For further information, please contact Dr Richard
Wilson, TIGA CEO on: 07875 939 643, or email richard.wilson@tiga.org.
[2] Source:
www.snjv.org/data/document/jeu-video-france-2011.pdf [3] “Evaluation des dispositifs de credit
d’impôts” – Centre National de la Cinématographie, France [4] “Evaluation des dispositifs de credit
d’impôts” – Centre National de la Cinématographie, France
[5] “Evaluation des dispositifs de credit
d’impôts” – Centre National de la Cinématographie, France [6] As of 30 July 2010
