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Brexit will cause 'serious harm' to the UK games industry

White paper from Games4EU suggests consumers will take financial hit while industry suffers 'brain drain' and 'cultural diminishment'

Anti-Brexit campaign group Games4EU has warned that a 'no-deal' or hard Brexit "will cause serious harm" to the UK games industry.

The pro-EU organisation has outlined the potential effects of Brexit on the entire interactive entertainment industry, from esports to VR, in a 51-page white paper released today.

Its conclusion was drawn from an analysis of areas including: EU talent, travel and funding; customs and trade; tax; data; consumer affairs; digital regulation; intellectual property; civil law; and wider economic factors.

Games4EU suggest that any form of Brexit -- in particular a no deal or hard Brexit -- will leave the UK games industry facing "considerable uncertainty and bureaucracy" that will drive up costs and impede day-to-day business.

This will result from "the ripping up, reorganisation and replacement of vast chunks of the business landscape on which the industry rests", from personal data, changes to tax, intellectual property law, and falling out of regulation and dispute resolution systems established by the EU.

Leaving the EU will also make products like game consoles and software subscriptions more expensive and harder to access, according to the white paper.

"No evidence has been put forward by the UK government or any credible external sources of any economic benefit from deregulation"

With access to pan-EU trade and personal data impacted, it could disrupt digital services such as online multiplayer, and even make it "materially harder" for retailers like Amazon to distribute to the UK.

"The media discussion of miles of lorry tailbacks and port delays across the UK creating supply chain problems is not just about cars and agriculture, but also interactive entertainment," the report reads.

"We need to move our games (both digital and physical), our consoles and our people around the UK and EU - fast and frictionlessly (often referred to as 'just in time' mechanisms). We depend on the regulatory system to enable digital access to our products across the EU."

Many global companies have EU headquarters located in the UK, including Activision, Square Enix, Microsoft, and Sony. However, after Brexit these companies "will be compelled to relocated" to elsewhere in the EU.

"UK businesses currently benefit from their own country being able to apply EU rules and regulations on something like a one-stop-shop basis across the EU without having to apply 28 different sets of laws for each EU Member State..." the paper reads.

"Post-Brexit, UK-based businesses would lose the benefits of this system and in principle have to apply 27 Member States' respective laws when trading with each of those countries"

"The UK plays an important part within the wider EU family from a cultural perspective... All of this is put at risk by leaving the EU in intangible but nonetheless real ways"

If EU citizens lose freedom of movement into the UK after Brexit, this will result in a loss of access to EU talent and cause "overtime, talent scarcity and brain drain", the white paper also suggests.

The inevitable crackdown on immigration, as pronounced by the UK government, will also impact the ability for EU students to study at British universities.

Furthermore, Games4EU highlights that the UK games industry is an international one, and travel across the EU is a common aspect of business.

"Following the proposed end of freedom of movement, that free ability to travel would have to be replaced by an as yet ill-defined new system that, in the worst case, would impose travel visas or other restrictions on UK/EU travel," reads the report.

Consumer rights will also be "badly hurt", the paper argues. This could affect the easy return and refund rights against EU businesses, net-neutrality, and basic consumer legal rights in the courts.

"No evidence has been put forward by the UK government or any credible external sources of any economic benefit from deregulation in this area," reads the paper. "Any benefit to UK business is likely to be illusory since in practice UK businesses will be forced to continue to apply EU law in their EU trade anyway."

Finally, Games4EU argues that the UK will suffer from "cultural diminishment" following Brexit.

"The UK plays an important part within the wider EU family from a cultural perspective," reads the report.

"Within the industry, many of our members (both UK and EU citizens) have told us about the wider cultural value of UK membership of the EU - the sense of community, internationalism and free exchange of ideas that forms such an important part of making interactive entertainment in the UK.

"All of this is put at risk by leaving the EU in intangible but nonetheless real ways that are keenly felt by our members and we believe by the industry at large."

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Latest comments (2)

Richard Westmoreland Senior Game Designer, Codemasters BirminghamA year ago
The Brexodus of talent to mainland Europe has been going on since the result of the referendum, along with investment.

The only 'good' thing it has done and will continue to do is the weak pound means that revenue from outside the UK is 'worth' a lot more money here now.
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Klaus Preisinger Freelance Writing A year ago
The only 'good' thing it has done and will continue to do is the weak pound means that revenue from outside the UK is 'worth' a lot more money here now.
That is only going to last until the actual Brexit date. After that, withholding tax will hit hard. Right now, EU states do not bill each other, but once Brexit is done, each EU state will have its own rate anywhere between 15% (Germany) and 33% (France) [75% if the French dub the UK as a noncooperative state, which is a fun topic to research].

I reckon we will see another radical shift in scope and type of game (game component) that comes out of the UK.

Edited 1 times. Last edit by Klaus Preisinger on 3rd November 2018 6:59pm

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