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EA urges pragmatism on UK tax breaks debate

Fri 07 Jan 2011 8:00am GMT / 3:00am EST / 12:00am PST
PoliticsBusiness

Industry must be realistic about economic situation and consider the long term plan, says Ramsdale

Electronic Arts' VP and GM for Northern Europe, Keith Ramsdale, has told GamesIndustry.biz that he believes the videogames business community should take a more pragmatic view on the hotly-debated issue of tax breaks in the UK.

He was speaking after rival publishing boss, Activision Blizzard's CEO Bobby Kotick, labelled the Coalition government's rejection of the measures promised by the previous administration as "a terrible mistake," earlier in the week - comments which made headlines in mainstream, as well as specialist, press.

But that shouldn't be the focus for ongoing discussions with government, said Ramsdale, urging a more realistic acceptance of the wider economic situation in light of the cuts that have, or will be, made.

"I think that this industry, and the companies within the industry, need to be pragmatic on the issues that the government faces today," he said. "We're not going to suddenly be handed a great big tax relief bill when the government's facing the economic issues it is - I think that cuts to the chase on this.

"The conversations we've had with government are pretty clear on this. That doesn't mean to say that we're not arguing the need for tax credits.

"But consumers are being faced with austerity measures, and I don't think it looks great on a company to be bleating loudly that we want our P&L to look better by having tax credits given to us by the very government that's having to pass these austerity measures onto consumers."

Instead, he explained, it was important to have a long term conversation with the government, firstly to ensure that existing business measures were accessible for games companies, secondly to look at ways of improving skills, and thirdly to make sure that the industry would be considered for support as and when the economy does improve.

"While R&D tax credits remain a criterion that in the longer term we'd very much like to see played out, we're also talking to them about other financial options that could run. Some of them are schemes that are currently available, and actually the conversation is how we can make access to them easier.

"So it's about a little sense check - EA does have a different, much less aggressive view than our big competitor there, who doesn't speak on behalf of all of us," he added.

Ramsdale, a UKIE board member, also issued a plea for unity with TIGA, so that conversations with government would be consistent - and also outlined his belief that while the film industry continues to enjoy tax breaks, policy therefore assigned less value to videogames jobs as a result.

"What applies to other entertainment sectors needs to apply to the videogames industry," he said. "It would be wrong for me to call out that the film one should go - it should be equal among all of them. You picked the right example, though.

"Are jobs in the games industry less valuable than those in the film industry? Maybe that's a question - and why would policy continue to have that view, given the contribution that the games industry makes?

"If you look at what's happening with the film industry, and you look at the growth of HD gaming, and users on new devices such as the iPad, iPhone and online - if you look at the touch points for videogames compared to film, it's vastly...

"It's interesting actually, because people are looking at the growth of the videogames industry and declines based on year-on-year revenues in the market - but what they're not looking at is the overall picture to include all forms of gaming. Mobile, digital, new devices - it's still very much an industry that's on the rise."

The full interview with Keith Ramsdale, in which he also discusses in more detail the UK's business environment, is now available.

12 Comments

Fran Mulhern , Recruit3D

863 707 0.8
"Are jobs in the games industry less valuable than those in the film industry?"

Actually, I'm sure that at one point - as recently as 18 months ago, I don't know about now - revenue per employee in the games industry was TWICE as high as that in the movie industry, again undermining any tax breaks argument. I *think* it was in one of the NESTA reports.

Posted:3 years ago

#1

Tameem Antoniades Creative Director & Co-founder, Ninja Theory Ltd

196 164 0.8
No the govt should just give taxpayers money to bankers so that they can fuck us all over again and pay themselves bonuses for doing so - that's far more reasonable. Encouraging successful industries to replace finance and services should be a govt priority. That makes tax breaks entirely reasonable.

Posted:3 years ago

#2

Phil Morris Audio Producer

11 2 0.2
Only one question here: does Cameron want to export games industry jobs or not?

If not, at what cost to UK tax payers?

Phil Morris

Posted:3 years ago

#3

Kim Blake Senior Events & Education Co-ordinator, Blitz Games Studios

22 0 0.0
+1 Tameem

Posted:3 years ago

#4

Jordan Woodward Level Designer, Codemasters Birmingham

44 0 0.0
Why give our own country tax breaks when we can use the money for foreign aid?

It's amazing how the government can just overlook such a huge industry.

Edited 1 times. Last edit by Jordan Woodward on 7th January 2011 1:02pm

Posted:3 years ago

#5

Gareth Edmondson Studio Manager, Ubisoft Reflections

1 0 0.0
The issue is more about attracting investment into the UK and into its development workforce. i.e. Where do companies choose to grow development staff in the world ? In the countries with the right skills and competitive costs is the short answer. The P&L argument isn't the big picture.

Posted:3 years ago

#6
+1 more Tameem

From EA's website ([link url=http://aboutus.ea.com/locations.action):
]http://aboutus.ea.com/locations.action):
[/link]

"Canada is home to EA's largest Development Studio in Burnaby, British Columbia; EA Black Box in Vancouver; EA Montréal and Bioware in Edmonton ... and our European Publishing Headquarters [are in] Geneva, Switzerland."





Posted:3 years ago

#7

Barrie Tingle Live Producer, Maxis

391 212 0.5
@Vincent The EA Publishing HQ are in Geneva but the main European development house of EA is in Guildford with EAUK and Criterion.
No game is developed at the Geneva office.

Posted:3 years ago

#8
Alright, how about we change the topic to Game Development incentives and pro games development atmosphere (to include long term tax incentives, business growth and investment).

Plus if we reduce the central government by another 25% and let they use less specialist consultants/ keep it all inhouse and be accountable, we can all have more bang for the taxpayer buck.

Posted:3 years ago

#9
Agree with Gareth on this. TIGA's submission combined with Ian Livingstone's tenacity and personal meetings with Stephen Timms and the Treasury this time last year got us a start. To allay any fears of a recategorisation of our collective work from 'software' to 'audio visual', I attended a meeting with the top BIS civil servant who had masterminded the film industry breaks shortly afterwars. It was confirmed that the scheme would be 'along cultural lines and would not effect a recategorisation', which reassured the ISFE team who accompanied me. All lights were green and all we needed was to build the scheme - a process of consultatie, consensual collaboration. All looked good only for the new UK Government to decide that they did not want to 'back winners' and 'had inherited a mess from Labour', so the tax breaks proposed in the March budget were swept away in June by Mr Osborne 'in the national interest' and without any consultation, don't you know.

So the games industry and VFX industry have been asked by Gov to produce a a report and recommendations - named Livingstone (after Ian) Hope (after Alex of Double Negative) Review - to be launched 1st Feb. That will point all of us and Gov in the right direction to ensure we get the skills and talent pipeline sorted. Then the Gov will either listen, debate, question and act or not.

But without a level playing field in terms of incentives - call them tax breaks or production credits - places that offer incentives will be attractive to the large(r) games and interactive entertainment companies. All we want in the UK is to be able to compete, not with emerging countries , but countries like Canada, France, Australia and certain states in he US.

At the end of the day, you have to ask yourselves if this or any government actually knows what the country should do to make a living. All this talk of public vs private service jobs is irrelevant. In our creative industries we have talent and importantly talent that the rest of the world wants to pay for by all means leave it to private enterprise, but give us the arms we need to fight. Please.

Posted:3 years ago

#10

Tony Johns

520 12 0.0
To be honest, the only way for games industry to have tax breaks is for the UK economy to recover more, as well for more gamers to become politicians and get into the seats needed to make up the numbers so when the tax breaks issue makes it around again that we have a better chance for tax breaks in the UK.

Also I am talking from an Australian perspective where the gov does not care about the gaming industry in Australia, we in Australia only get state government support in Victoria and Queensland, but yet things are struggling here in Australia too.

Posted:3 years ago

#11

Charlie Moritz Studying Philosophy with Psychology, University of Warwick

19 0 0.0
We need Tax Breaks for the Gaming Industry in the UK. I wrote this article all about why and how it can help!
http://wp.me/p11PW8-3M

Posted:3 years ago

#12

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