Page last updated at 08:04 GMT, Tuesday, 3 March 2009

UK video game firms call for help

Film poster, AFP/Getty
Tax schemes that helped Slumdog Millionaire could aid game makers

The success of the UK's game developers is under threat, warns a report.

Without urgent help the UK risks slipping from being the third-biggest game making nation in the world to the fifth, it said.

Written by industry body Tiga, the report said UK market conditions put the sector at a "severe competitive disadvantage" to foreign rivals.

To prosper game makers need access to finance, well-trained staff and government-backed tax breaks, it said.

Cutting fees

Compiled by the independent game making body, the research questioned developers about what has held back their success in the past 12 months.

Of those questioned 41% said foreign governments subsidising their native game makers was the biggest brake on growth. 31% said taxes in the UK were the problem.

"The UK games development industry is competing with one hand tied behind its back," said Dr. Richard Wilson, head of Tiga, in a statement.

Canada, the US, France and South Korea were all getting tax breaks from government to help them prosper, he said.

Significantly, said the report, Canada recently overtook the UK in world rankings of top game-making nations and in 2009 South Korea looks poised to knock the UK into fifth place.

In response to a question about what the government could do to help game developers, 85% backed tax breaks, 77% wanted more liberal R&D tax concessions and 51% called for lower tax rates for businesses.

Packshot from LittleBigPlanet, Sony
UK made games have proved popular around the world

Dr Wilson said the announcement of a 20% tax break in the 2009 budget for games production would be a "welcome start".

The report called for the creation of a scheme for developers similar to the Film Tax Relief programme that is known to have helped the UK movie industry prosper by making it easier to raise capital to back creative projects.

Without that fund, said the report, movies such as Slumdog Millionaire would not have been made and the UK film industry would be a fraction of the size it is now.

The report estimated that creating a scheme similar to Film Tax Relief programme for the games industry would cost only 150m. Far less than the 600m the Film Tax Relief programme costs.

Finally, the Tiga report wanted action to ensure that game developers can find and recruit staff with the right skills. Of those questioned by the report, 63% said they had struggled to find staff in the last 12 months and 74% said it was proving challenging to fill programmer vacancies.

To fix the problems, Tiga said the government needed to improve standards of maths and sciences in schools to deepen the pool of potential talent that game makers can draw on.

It also called for fees for higher education students studying maths and computer science to be reduced so graduates are encouraged to consider a career making games.

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