Cultural test for games "a problem" - EGDF

Euro association insists tax breaks are an investment opportunity, but 'cultural tests' are an extra barrier for developers

The chair of the European Game Developers Federation has said that determining which development projects should be given tax breaks off the back of a cultural test is a flawed system.

France's tax breaks were given the go ahead at the end of 2007, and like a proposed system for the UK, rely on passing a test to determine if they are culturally significant.

"The cultural test is a problem," said Guillaume de Fondaumiere, who is also co-CEO of Heavy Rain developer Quantic Dream.

"It's definitely a problem, and when I negotiated both with the French government and the European Commission I had to give in on a number of criteria - because state aids are only allowed under EU law under the famous cultural exception.

"When you look at EU rules, you have to ask: 'Actually, what is culture?' It's a national decision, so it's kind of weird that we, as the videogame industry, have to work with standards that other cultural areas don't have to follow."

The UK's Digital Britain report has prompted the Department of Culture, Media and Sport to ask the UK industry for evidence for a culturally-based tax break for the sector, but de Fondaumiere is concerned that by the time its accepted that videogames have cultural relevance, it could be too late for a weakening European development community.

"To me, all games are cultural. Videogames aren't just a form of entertainment, but a true form of cultural expression, and I think that in twenty years' time this will be a given. No one will dispute that any more.

"So we've got a rocky twenty years in front of us, and we have to make sure this recognition doesn't happen when we no longer have an industry in Europe."

de Fondaumiere also points to Canadian evidence that investment in tax breaks is not dead money, are are vital to stimulating business.

"We know that tax breaks are extremely effective in stimulating an industry, and I think again that Montreal and Quebec have shown us the way. If you listen to representatives of Invest in Quebec, they'll tell you that they've invested hundreds of million of dollars in the industry. I think the last time I was presented the numbers they'd invested CAD 400 million, with a return on that investment of CAD 600 million.

"So I think it's high time for governments, and the EU, to understand that money given in the form of tax breaks to the industry is not money thrown away. It's an investment with a very high return, so it's time that we had those breaks."

The full interview with Guillaume de Fondaumiere can be read here.

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Latest comments (3)

David Braben Chairman, Frontier Developments12 years ago
It sounds like what Guillaume is saying is that the cultural test should always be passed (if video games always have cultural relevance), rather than the cultural test itself being an issue!
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de fondaumiere Co-CEO, executive Producer, Quantic Dream12 years ago
Hi David,
I think I am saying "both": When I say I believe all games are a form of cultural expression, I'm implying that no test should even exist. But I know this is pure fantasy, and that for the time being we unfortunately have to follow the Commission's doctrine on the matter. But make no mistake: this doctrine is not video game specific, tests are applied for example in the UK, Germany or the Netherlands for films too to benefit from tax breaks.
Note also France's exception may be short-lived, as the current system may come to an end, and tests could well become mandatory for features too in 2013, as the Commission is eager to see same rules applied throughout Europe.
I think the right strategy is to accept A test (not The test) and make sure it is at least relevant to our media. It should at least enable 30 to 40% of the developers to claim tax breaks. But then, we absolutely and immediately need to continue our lobbying for a global tax break system, as it exists in other parts of the world.
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Chris Kolmatycki Game Designer, HB Studios12 years ago
Here's an example of another Canadian tax break system for gaming companies in the province of Nova Scotia.
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