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News Tax relief for UK developers cancelled

Discussion in 'Article Discussion' started by CardJoe, 22 Jun 2010.

  1. CardJoe

    CardJoe Freelance Journalist

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  2. Isitari

    Isitari Member

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    'Parts of the new budget were not met well by listeners and Osbourne was forced to explain that action was "unavoidable" over a booing crowd.'

    What a crowd....sorry I know the Palace of Westminster can get rowdy but calling them a crowd?!

    Also my School has just had an emergency union meeting over the 2 year pay freeze.....it could get interesting around here ;).
     
  3. Jezcentral

    Jezcentral New Member

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    Dammmit. When times were good, we could have done what Canada did, and invest in getting the games devs to come over. Now we can't afford to do that. Bloody Brown. :(
     
  4. CardJoe

    CardJoe Freelance Journalist

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    Personally, I'd describe them as a rabble...but fine, that line has been tweaked to give more elucidation.
     
  5. julianmartin

    julianmartin resident cyborg.

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    This doesn't come as much of a surprise to me. There aren't many reasons that can justify why the games industry deserves a tax break over any other, given they do not provide essential services to our economy or quality of life.

    It is a shame for the developers, sure, but did anyone really expect anything else?
     
  6. pimlicosound

    pimlicosound New Member

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    You can speak for yourself!
     
  7. Coldon

    Coldon New Member

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    a modern AAA game project can cost several million dollars, that is money coming into the community from external source and boosting the local economy. The money being paid to staff and maintenance costs gets put straight back into the community.

    It is no surprise why in the US, states are fighting with each other as to who can offer the biggest tax rebates and incentives for game studios to open up shop there. Hell Savannah, Georgia offers free office space for game studios.

    The UK is one of the worst potential areas to open a game studio, the salaries for devs are nearly half those of their US counterparts, the cost of living is much higher and there are absolutely no financial incentives offered by the state.

    The game industry is tiny and in the bigger picture, perhaps the government has more urgent matters to resolve at the moment but hopefully in the future they will realize that by not offering those incentives they will lose out the economic benefit to other EU and eastern bloc countries. These incentives dont only apply to the game industry but any entertainment industry.

    For example Bulgaria has now become the premiere action movie location, why? Cause its cheap to work there, as of yet the government doesnt offer any incentives but there are serious calls for a 30% tax rebate for the film industry. As it stands it is the choice location for actions movies, adding in a tax cut will only further increase the popularity and get a lot more foreign money into the country's economy.

    A good article on the topic can be found here, http://sofiaecho.com/2010/05/14/900295_the-stuff-that-dreams-are-made-of & http://www.facebook.com/pages/Suppo...duction-Tax-Incentive-Law/143839733409?v=info.

    Now i know that is going off topic but the same principles apply to the game dev industry and it influence on the local economy. Gaming is a multi-BILLION $ industry and not wanting to get a piece of the pie is a a bit narrow minded.
     
    smc8788 likes this.
  8. CardJoe

    CardJoe Freelance Journalist

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    True, but the film industry gets great tax breaks and is now a much, much smaller, less profitable business which employees fewer people. The UK has a legacy of great developers, but it needs to compete with countries that do provide tax breaks (France, Germany, USA, Canada) in order to stay a viable base for developers and publishers.
     
  9. Jamie

    Jamie ex-Bit-Tech code junkie

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    Where are the tax breaks for web developers?
     
  10. NuTech

    NuTech New Member

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    This is pretty much the last nail in the coffin for any new UK game development. I'm sure existing and indie studios will manage to survive, but you can forget about future AAA houses setting up shop here.

    When you have so many countries offering incredible local talent (just look at eastern Europe, their games may still be slightly unpolished but they're making incredible strides), tax breaks and other incentives - you have to ask, why bother open a studio in the UK?

    Tax breaks aren't only for companies that provide 'essential' services, they're also used to encourage and help nurture rapidly growing industries. As a country that has all but abandoned the industrial sector and possesses very few natural resources, we need to gain recognition for more than just being a financial capital of the world. The video game industry is a perfect match for the UK, but I don't think the government appreciates that.
     
  11. julianmartin

    julianmartin resident cyborg.

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    Plenty of good points made, and I pretty much agree with all of them, but I fear they are all too speculative to really get taken seriously by the government, considering the kind of money it is trying to save (and because it has to, not because there is a choice).

    One could equally say farming needs more tax breaks (even though it has many already), to stop our reliance on imports (and even export and re-import just to package our products!). But again, it is too speculative to hope the industry will improve that much because of it.

    Giving tax breaks is like investing into a certain industry. The UK government is in no real position to be doing that right now, even if it is the best idea in the world. The gains from doing it may not be seen for many years to come, and there are other areas which will give more immediate, clear returns, required for economic recovery.

    I say all this, it doesn't matter anyway, there IS going to be another recession anyway. The double dip is coming. You've all been warned. :D
     
  12. Coldon

    Coldon New Member

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    Web developers are much much smaller outfits and often don't come close to the revenue of the game or film industry. Even a poor selling AAA game only selling 100 000 copies, will bring in around $40 million dollars. I dont think there is a single web developer that can compete revenue wise with a AAA game studio.

    Looking at the annual GDMAG salary survey the average salary for a game programmer in the UK is around $45 000 compared to the $75 000 in the US, take into account the high cost of living in the UK the salary difference becomes a lot larger. The take into account the lack of any incentives for companies, like nutech said its the last nail in the coffin.

    Eastern europe is taking over, the ukraine producing the stalker series, masthead in bulgaria working on fallout online, the witcher coming out of poland, the ARMA series from czechoslovakia. To be honest off the top of my head I cant think of a single AAA game developed in the UK. All the big studios have closed down their UK studios and all thats left is handheld developers.

    Just for reference some the incentives offered worldwide for game dev studios:

    new mexico - 25% tax rebate
    texas - 5% cash back on all spending in texas
    ontario - 40% cash back
    georgia - 20% tax credit
    conneticut - 30%
    etc...

    the us and canada are really pushing to get more game dev studios opened.
     
    Last edited: 22 Jun 2010
  13. CardJoe

    CardJoe Freelance Journalist

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    Big ones? Recent ones? Off the top of my head?

    Aliens versus Predator (Oxford, Rebellion Development)
    Total War series (Horsham, Creative Assembly)
    Blur & Project Gotham (Liverpool, Bizarre Creations)
    Batman: Arkham Asylum (Newcastle, Rocksteady)
    APB (Dundee, Realtime Worlds)
    Grand Theft Auto series (Edinburgh, Rockstar North)
    Banjo Kazoee (Reading, Rare)
    Burnout series (Guildford, Criteron)
    Fable series (Guildford, Lionhead)
    Dawinia, Uplink, etc (Can't remember, Introversion)
    Buzz! series (Brighton, Relentless)
    Wipeout series (Liverpool, Sony SCE Liverpool Studio)
    Brink (London, Splash Damage)

    There are a few, in short - and only one of the above is a handheld developer (Relentless). There's even more if you look at older games - Elite, Lemmings, Tomb Raider, Syndicate, Theme Hospital, etc, all Made in the UK.

    It all only gets thorny when you look at ownership. Many of the above are owned by Microsoft, EA, Activision or 2K - all of whom are US companies. Or Sony or Square Enix, who are Japanese. The real problem is that there are no publishers left in the UK, not a shortage of developers. We're making money for other countries, essentially.

    More info: http://www.bit-tech.net/tag/made-in-the-uk
     
  14. eddtox

    eddtox Homo Interneticus

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    Shock, horror, the ConDems are cutting things!
     
  15. Coldon

    Coldon New Member

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    Sorry I meant made in the last year or so... So its a lot better than I initially thought but still doesn't look good a lot of the major studio have closed shop and moved UK IPs over to other studios. I completely forgot about the scottish studios... oops!!

    my point was its looking a little bleak, i for one hopes that it only gets better but money talks and it makes more sense for publishers to open a big studio somewhere where they will get 30% off their taxes.
     
  16. NuTech

    NuTech New Member

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    As soon as eastern European studios figure out how to make their games appear more 'western' (which they're already doing a good job of with games like Metro 2033) and are able to afford more dev kits, they will take a huge market share. When it comes to talented and cheap developers, they're second to none - currently only lacking in pedigree and resources (both solvable problems).

    There are still quite a few AAA studios in the UK, including major racing game developers like Bizarre Creations and Black Rock Studio. Part of Take2 is still in England, but they mostly focus on mobile and handheld. Scotland has Real Time Wolds (creators of Crackdown) but they're most likely going to go under (or at least have major layoffs) because APB is a turkey. Then there's Rebellion (but they haven't had a major hit in a while).

    Those are just a few off the top of my head, but my actual point was that I just can't imagine new studios being created. If I was a publisher thinking off opening a studio, I just don't see a reason to pick the UK (and this is coming from a guy who works for a huge publisher, albeit in a completely different department).
     
  17. CardJoe

    CardJoe Freelance Journalist

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    Well, bear in mind it can take a long time to develop a AAA game - much longer than a year for most studios. The ones above who haven't released a game in the last twelve months (such as, say, Lionhead whose last game was Fable 2 in 2008) are actively working on new titles (Lionhead is working both on Fable 3 and Milo for Kinect). None of the studios listed above are either small, unsuccessful or dormant (apart from maybe Introversion, who are tiny but well-known).
     
  18. Coldon

    Coldon New Member

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    i really hope the situation stays as is or improves.
     
  19. DriftCarl

    DriftCarl Member

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    As much as we dont like the increases in tax and the cuts in spending. It is something that the government has no choice of. The only choice they have is to decide on where the increases and cuts go.
    This still goes back to labour and to a lesser extent the banks.
    We dont want our childrens children to be in a huge debt country in the future, we all have to dig deep, save where we can and make improvements in the way we spend.
    I work for a company that has alot of government/education related contracts, instead of complaining about how the cuts in spending are hurting our profits, we are thinking of new ways to get business from these councils, while also saving them money, sure someone will lose out as our competitors will lose the business, but the most important thing for me is to keep in work :)
     
  20. LightningPete

    LightningPete Diagnosis: ARMAII-Holic

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    I'd call parliament a giant nursery for cry babies who just make loud moans after a phrase is said.
     
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