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UK dev workforce could shrink by a quarter over 5 years

Wed 26 Jan 2011 8:48am GMT / 3:48am EST / 12:48am PST
PoliticsDevelopment

Latest TIGA doc submitted to govt continues call for tax relief

TIGA

TIGA is the trade association representing the UKs games industry. The majority of our members are...

tiga.org

Developer trade association TIGA has said that the UK development workforce could shrink by a quarter between 2010 and 2015 if the government doesn't implement cultural tax relief for the sector.

The latest estimates come from a renewed push by TIGA as it submits an updated 85 page document to the government calling for cultural tax breaks.

According to the research, such relief could create and safeguard 3366 development jobs and 431 million investment. Headcount has fallen by 9 per cent in the UK since 2008 - when TIGA first submitted its case to the then Labour government.

"If the coalition government is serious about its intention of rebalancing the economy then it should invest in the UK videogames industry by introducing a tax break for games production," said CEO Richard Wilson.

"Games tax relief would create jobs, boost investment and generate much needed tax revenue for the government. The coalition government recognises the effectiveness of tax breaks because it already supports the UK film industry with a tax credit. It should adopt the same successful policy for the video games industry to enable our sector to make a powerful contribution to UK economic growth."

While TIGA continues to campaign for tax relief on behalf of the development community, the publishing sector adopts a more pragmatic approach - EA's Keith Ramsdale recently told GamesIndustry.biz that the government isn't likely to help out UK development during the current economic climate.

"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," he said.

The division between publishers and developers has been cited as one of the reason why the government is not aiding the sector, as TIGA and UKIE are unable to present a united front.

TIGA believes that cultural tax relief would create around 1328 new jobs over five years in the development studio sector, increasing investment in studios by 138 million. It also claims 2427 "indirect jobs" would be created with annual tax revenues rising by 126 million and a contribution to GDP of 307 million.

Cultural tax relief could save a further 2038 direct jobs and 3726 indirect jobs, 293 million in development expenditure, 267 million in tax revenues and 649 million in GDP contributions according to TIGA estimates.

15 Comments

This article points out that the future of UK Games Industry is going to suffer sooner rather than later. If there will be less jobs available then I don't see how moving abroad to Canada or the US can be avoided. It's really disappointing to hear that the government won't support our the UK growth, our sector can provide many more jobs and provide help with stabilising our economy!

Posted:3 years ago

#1

Chris Kay
Senior Level Designer

14 0 0.0
Right - but it's not like only the games industry is having it's problems. If only it was as simple as that.

Posted:3 years ago

#2
@ Chris. I suppose the argument is that if we're looking for an export led recovery then games could be a part of it. I'm not a fan of tax breaks, but I dislike them less than I dislike the way Canadian studios have taken advantage of their government's tax breaks to behave in the most predatory way possible towards studios from other countries.

As it is, we'll probably end up losing most of our industry unless something is done very soon. And, in time, Canada will too, once their tax breaks get abolished, or the government refuses to give the big studios breaks at the level they seek. At that point, I'd have thought they'd presumably just up sticks and leave for Asia. Long term, the Canadian tax breaks have helped no one, and simply succeeded in distorting the market.

Shame on other publications for their incessant Canada specials etc.

Posted:3 years ago

#3
Gotta agree with Fran on this one. It appeals to the short term view that can be held by some publishing houses that can offer AAA games at reduced development costs thus aiming to increase profits for shareholders by utilising these tactics. And quite often they don't have a choice. Riticello didn't want to cut 1000 jobs in early '09 but pressure from analysts and shareholders effectively forced his hand. And you can't blame companies for taking advantage of what is a disproportionate level of relief for developing games there.
Many people I have spoken to though have claimed that poor development practices, inconsistency or reactionary tactics to market conditions that affect certian product development cycles (competing product having a new feature, release schedules for competitive games, etc), and general bad decision making often have a much greater impact on the marketplace.
As an example of how things haven't been all bad for the UK marketplace, since we are talking about Cananda in relation to this also, NFS' primary product Hot Pursuit (or whatever xmas release is in store for us) has since been shipped to two UK studios. Because the quality is there, and quality products with proper marketing campaigns sell....and sell well. It's by no means 100% accurate as some recent studios have seen and this obviously unfair and very unfortunate, but this is an example of a product brought ONTO UK shores and has benefited through improved sales and brand image in the marketplace. A value that could be argued has brought in more money to develop games in the future than potential tax breaks would if you had to compare the two side by side.
Also the current market means that the government needs to stimulate growth across the board, and as such this might indirectly help the games industry over the next few years as business and spending increases, leading to publishers investing in more products. We may be more expensive, but we do have experience. Some companies have been stung by utilising cheap outsourcing options abroad where there simply isn't the experience, and production can take longer or the quality is not there (This will change in time though, of course and certainly outsourcing is definitely the way to go to manage dev costs, as long as the service provider itself has the experience and is up to the task).

Not saying any of this is a proper analysis but it seems to make sense to me, and is just my thoughts in the mix.

I do appreciate that some games just don't get the run they deserve despite positive reviews, marketing, etc.
I sure hope Vanquish's sales have picked up because that game is really something else!

Posted:3 years ago

#4

Nathan Hall
Studying ba(hons) in creative computer games design

5 0 0.0
I'm not going to come into this argument stating that I know everything but, I graduate in June and was really hoping that after a few months a portfolio design that the possibility of getting a job in the industry that I love would be so problematic. I understand that people are migrating that other areas just because of these tax breaks but from what I've seen coming here in the uk if we can get this break, even in a year one the country has been sorted out a bit more, then enthusiastic highly trained quality students can get jobs from this. The uk is where it is at for quality maybe our government should start to see that perspective.

please not im not criticising any other country for their quality im a huge Bioware fan myself but to let such British talent go to waste well makes me feel ashamed

Posted:3 years ago

#5

Andreas Gschwari
Senior Games Designer

555 607 1.1
Brilliant! Yet another push from TIGA. It seems they are more concerned with trying to justify their own existance than with the actual industry they represent. Talk about flogging a dead horse. I think it's clear to everyone that the government won't come to the rescue of a failing UK games industry - and why should it? There are plenty of other sectors out there generating more jobs where investment is also needed. If the NHS and the BBC get massive cuts, chances are the games industry won't get a hand out.

So why is TIGA pushing on about this? Who do they represent anyway? Who would really benefit from tax incentives?

It certainly would not be employees of studios and publishers. The people on the ground will still be crunching away without pay or other compensation creating behemoths of games that few people want to buy (i.e. APB).

There is a reason why experienced people from the UK industry are looking abroad and moving to places like Canada. Sure, big names set up studios there because of the tax incentives, but they also create high quality titles in 2 to 3 year periods and the pay is good. People move abroad because jobs there are better paid, more secure and they create games that people actually buy.

Nathan: i would not worry about getting a job in the UK. Currently the industry here is thriving on hiring graduates at low wages to burn them out in crunch mode.

Posted:3 years ago

#6

Robert Turner
Studying Games Programming

24 0 0.0
@ Andreas: Any chance you could enlighten us on some of these companies hiring grads? I too graduate soon and when looking for positions the VAST majority tend to be "Senior This" and "Lead That" or Must have two/three years industry experience. From what I have seen on my hunt, there is next to NOTHING for us grads :'-(

Posted:3 years ago

#7

Kieren Bloomfield
Software Engineer

92 79 0.9
I think it's time to end the myth that Canada has lots of stable well paid jobs across the board. This isn't entirely true. The tax breaks vary from region to region. For example the incentives in Quebec and Ontario are bigger than British Columbia. As for stability I'd like to point out that in Vancouver at least, over the last 2-3 years more jobs have been lost than gained through cut backs and studio closures. Just ask the people who lost jobs as EA, Black Box, Radical, Nexon, 3Wave, Propaganda ... do you think all those people found work again locally?

Also it's not just about the money. As someone who moved to Canada from England, would I come back if I could get the same money? No! Life is so much better out here. Looking out the window right now I can see snow capped mountains, not traffic crawling along the M42.

Sorry for the rant but things are getting a little one-sided here.

Posted:3 years ago

#8

Nathan Hall
Studying ba(hons) in creative computer games design

5 0 0.0
@Robert I can totally see where your coming from man, I'm been looking at all these web pages as well and seeing the exact same situation.

Also to this whole debate I think students dont care about location or situation as long as a job can be presented, I mean I know its going to take me 5-10 years to get anywhere decent within this industry. The only option I can see graduates in the games industry having right now is testing positions or trying to set up a small games company anyway but wait i guess this is where the tax break would come in handy to do so, so either way graduates graduating this year and for the new few are going to be like bums looking for their next hot meal

Posted:3 years ago

#9

Jay Walton
Programmer

1 0 0.0
Nathan: With regards to getting a job you just have to focus on your uni work and get the best portfolio you can. I graduated in may last year and just gave them no reason not to hired me, i was fortuate enough to meet some of the guys at rockstar before hand which helped me work my way in, so i'd say with any meet and greet opportunitys you get, get to know some of the people in the industry!

Adding to this comment, the biggest win for me was producing my own indy game(s )in my spare time aswell as the work i was requied to do on my course. Showing you can finish a project and release it (i.e. XBLIG) helps leaps and bounds when applying for jobs. I just found people on my course that were willing to put the time and and make something with me so it would be well worth doing something like that.

Edited 1 times. Last edit by Jay Walton on 26th January 2011 11:43pm

Posted:3 years ago

#10

Andreas Gschwari
Senior Games Designer

555 607 1.1
@Nathan: what Chris said. Being a tester is a great way into the industry and in my time i have known quite a few people that went that route (myself included). What Jay said is also very true. Get a portfolio together. Some of the best designers i have met have started making multiplayer maps or mods. Buy yourself game that comes with an engine (Hammer, Unreal or Crysis) and start designing. Look at stuff like the Starcraft MMO that's just been in the news. It'll take time (spare time) but in the end showing something you made yourself is the most important thing. In my time at my last company i have seen quite a few graduates hired - we had several people on their first project, so i do think that companies are hiring a lot of fresh blood.

Chris: agreed it's not all doom and gloom at all. There are plenty of success stories in the UK still, but i just don't like to hear this constant whining about brain drain from the UK. People tend to leave for better jobs and better lifes. As Kieren pointed out there are plenty of companies with problems in Canada as well. I just think that tax incentives are not going to have a major impact here. Fran hits the nail on the head. Once the tax incentives in Canada come to an end (as they inevitably must) then the big companies will gradually migrate somewhere else, like China etc. Just look at how I-play migrated to eastern europe and cut 2 development teams in the span of 18 months (i think it was).

Judging from the Labour propsal from last year, it seems obvious that any kind of UK tax incentive will be nowhere near as generous as the one Canada currently offers. So why would any company make massive studio investments here that were not already planned? If i remember the propsal correctly, publishers and developers would get tax back from units sold, so it would not be an upfront investment or help to lower production costs. It would simply mean higher returns on the product - if it does reasonably well.

I would be much happier if TIGA would actually start to establish an industry standard for work environments and support for employees, rather than lobby for the companies themselves.

Posted:3 years ago

#11

Sean Scaplehorn
Programmers

2 0 0.0
Whilst I don't believe we'll see tax breaks any time soon, the article indicates one of the reasons for the government not taking an interest is that TIGA (the developer focussed guys) and UKIE (who are more publisher focused) don't agree on the matter.

To me, it seems this only illustrates the divide between developers and publishers all the more. Tax breaks would benefit developers in the main, not publishers, which is presumably why UKIE aren't interested in pushing for them. UKIE are probably right that it's a waste of time, but would it hurt to lend their support to TIGA, even if only voiced as backing and they don't actually do anything tangible to help?

Also, I do find it interesting that it is EA saying we shouldn't have tax breaks, since as a developer as well as a publisher surely they would benefit, as they presumably have done with Canada's system?

Posted:3 years ago

#12

Nathan Hall
Studying ba(hons) in creative computer games design

5 0 0.0
i do apologise to Chris I was not knocking testing just stating that obviously everyone dreams of getting a good job right away but I know I will have to work my work up to a good position so ill say again I do apologise that it may of seen I was putting down testing as i will probably going into this field anyway just to get my foot in the door

Posted:3 years ago

#13
To be honest, the big problem seems to be Quebec. The tax breaks from there are so lopsided, even compared to everywhere else's, they've completely distorted the market.

As an ex-Ubi Montrealer said to me in an email recently "it's a bit rich to go on about the industry booming when it's only because of government handouts".

@ Sean - tax breaks would help publishers too, even if only to minimise their losses on bad projects.

Posted:3 years ago

#14
I'd prefer it if we pursue a more pro business environment, and closer relationship between the developers and publishers and local growth/education of teh games sector. Thus allowing us to be SELF reliant as a sector (thus allowing our own unity via joint partnerships, and tech advances) that will more than level the playing field with stellar growth and solid platform title development.

In addition, the size of our developers will need to be slightly smaller to be totally efficient and robust.

This will help offset the NI rise, allow for more job retention and maximise tax liability.

Next gen tech development should be encouraged (and allow for investment opportunities and increased involvement of the Technology Strategy Board http://www.innovateuk.org/) to allow us to develop cross platform applications and engines such as Unity, or cross platform payments, integration, user retention, promotional and cross media involvement.

Currently, technology is poorly invested in (or rather seen as a high risk) within the City whereas we let outsiders like Rusnano invest 25% in Plastic Logic (large investment by the Russian and Chinese govt) in a leader in next gen tech of plastic microchips, forecasted to have a 1bn tunroever by 2016.

It doesnt help that David Willetts, the UK science minister stating the UK government would NOT invest $650m to help expand a tech company. Perhaps that is realistic, but some investment is better than NO investment. Another example was the sale of QinetiQ for a bargain basement discount, and UK gold, etc.....

:)

Posted:3 years ago

#15

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