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Guillaume de Fondaumiere - Part One

The Quantic Dream co-CEO talks tax breaks - and why the cultural test should only be the first step

GamesIndustry.biz Do you think that number will go up in time, though? I wonder what the total budgets for film are in comparison to games?
Guillaume de Fondaumiere

It's more than EUR 200 million, but French movies exported a total of less than EUR 400 million last year. I think this is something that's also very important to look at - how much of this production is being exported? Let's not forget, you're talking production budget on one hand and export turnover on the other.

I can only tell from my company, Quantic Dream, but 93 per cent of the turnover generated from our games is from exports - our publishers only generate 7-10 per cent in France, which is normal, as that's about the same as France's share in the market. So we're a heavily exporting company here.

GamesIndustry.biz We just had the Digital Britain report in the UK give some indication that a cultural tax break could be implemented, so a lot of people will be looking at France to see how it's worked out there. What's been the general consensus, is it a restriction, or are people happy to embrace it?
Guillaume de Fondaumiere

The cultural test is a problem. 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.

That was the case two years ago when I was negotiating, but I see that things have obviously changed now, because I don't believe banks are part of the cultural exception, or the automotive industry is part of it - but nevertheless those institutions and companies are getting huge amounts of funds.

So I guess that the crisis has brought not just bad things, but opened up opportunities here. I think that what was true in 2005 may not be exactly the truth today - I'm extremely happy for British developers has now, finally, looking at this, but I'd encourage Tiga and those developers to push the envelope to a certain degree.

When I was negotiating with the EU I basically had a two-year discussion with them about how to categorise games into boxes - those which are cultural and those which aren't. We came out at the end with this cultural test, but where does that come from?

Actually in France all films are based on certain very light criteria. You have to be a French company, but saying that Warner Bros France could make a movie called A Very Long Engagement and receive funds... There are a number of criteria like this, but otherwise no such cultural test to receive funds.

But those tests exist in other countries, like Holland, Britain and Germany. We've been presented those tests, and asked if we'd accept for games to pass them. Of course when I looked at them they were absolutely not adaptable to what we're doing in games. So we discussed it for about a year to try and to erase the criteria that were irrelevant.

We now have a test that allows approximately 40 per cent of games produced in France to benefit from tax breaks, and in particular some criteria are more geared towards technology and innovation - which didn't exist in the initial film test.

But I'm still not satisfied, and I've always said this is only a first step. I'd prefer to get a foot in the door, rather than have it slammed. We now have to go back to the EU and fight this battle again, on the grounds that many things have changed - obviously banks, the automotive industries getting funding... obviously there are new criteria. We may not need exclusively cultural criteria for our industry to benefit from tax breaks.

Again - I think it's an investment, while I'm not sure it's wise to invest in the automotive industry...

GamesIndustry.biz A cynical person might point to the subject of political votes...
Guillaume de Fondaumiere

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.

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.

GamesIndustry.biz Is Heavy Rain within that 40 per cent?
Guillaume de Fondaumiere

Yes.

Guillaume de Fondaumiere is co-CEO of Quantic Dream and chairman of EGDF. Interview by Phil Elliott. Part two of this interview will follow next week.

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