Britain’s video games sector is facing a critical challenge that could potentially jeopardize its position as a global leader in the industry. According to leading financial and tax advisory firm, Blick Rothenberg, the sector is at risk of losing both talent and intellectual property (IP) to other countries such as France, Ireland, and Australia. This alarming warning comes as a result of the lack of urgent government action on tax reliefs and scale-up funding for the gaming industry.
The UK gaming industry has been a major contributor to the country’s economy, with an estimated worth of £5.7 billion in 2020. It has also been a source of pride for the nation, with iconic games such as Grand Theft Auto, Tomb Raider, and Fable being developed by British companies. However, this success could be short-lived if the government does not take immediate action to support the sector.
One of the major concerns raised by Blick Rothenberg is the lack of tax reliefs for the gaming industry in the UK. Unlike other creative industries such as film, TV, and theatre, the gaming sector does not have access to tax breaks. This puts the UK at a disadvantage compared to other countries that offer attractive tax incentives for game developers. For instance, France offers a 30% tax credit for video game production, while Ireland provides a 25% tax credit for companies involved in the development of video games. These incentives have made these countries more appealing to game developers, who are now considering relocating to take advantage of the tax benefits.
In addition to tax reliefs, the UK gaming industry also lacks adequate funding for scale-up businesses. This is a crucial factor for the growth and success of any industry, and the gaming sector is no exception. Without proper funding, game developers struggle to scale up their businesses and compete with larger companies in the market. This has led to many talented individuals and small game studios seeking opportunities in other countries where funding is more readily available.
The potential loss of talent and IP to other countries is a significant concern for the UK gaming industry. The sector has been a breeding ground for creative and technical talent, with many game developers going on to work for major companies such as Microsoft, Sony, and Electronic Arts. However, with the lack of support from the government, these talented individuals may be forced to seek opportunities elsewhere, leaving the UK with a shortage of skilled workers in the gaming industry.
Blick Rothenberg has called on the UK government to take urgent action to address these issues and support the gaming sector. One of the proposed solutions is to introduce tax reliefs for the gaming industry, similar to those offered to other creative industries. This would not only attract new game developers to the UK but also encourage existing ones to stay and invest in the country. Additionally, the government should provide more funding opportunities for scale-up businesses in the gaming sector. This would enable smaller game studios to grow and compete with larger companies, creating a more vibrant and diverse gaming industry in the UK.
The potential consequences of not taking action are dire for the UK gaming industry. If the government fails to provide the necessary support, the sector risks losing its crown as a global leader to countries such as France, Ireland, and Australia. This would not only have a significant impact on the economy but also on the country’s reputation as a hub for creativity and innovation.
In conclusion, the UK gaming industry is in urgent need of a power-up from the government. The lack of tax reliefs and scale-up funding is putting the sector at a disadvantage and could potentially lead to the loss of talent and IP to other countries. It is crucial for the government to take immediate action to support the gaming industry and ensure its continued success and growth. Failure to do so could have severe consequences and result in the UK losing its position as a global leader in the gaming industry. It is time for the government to recognize the potential of the gaming sector and provide the necessary support to help it thrive.
