Page last updated at 10:14 GMT, Wednesday, 18 March 2009

Call to protect gaming industry

Grab from the computer game "Crackdown" (Pic from Realtime Worlds)
Scottish companies have been responsible for world-class games

Scotland is in danger of losing its place at the forefront of computer games development, a report has warned.

The National Endowment for Science, Technology and the Arts (Nesta) wants government assistance to help research and development of games.

Nesta called for tax breaks to be introduced at the beginning of the research and development process rather than at the end, as happens at present.

The tax break plea will also be made during a debate at Holyrood.

The games industry, which employs about 1,000 people in Scotland and generates more than 20m annually, has claimed that developing new products is a very costly process.

Computer games are no longer developed in a matter of weeks in a back room.

The process involves teams of 100 or more and costs tens of millions of pounds.

The chances of us producing a greater number of titles and achieving higher levels of success would be boosted hugely
Colin Macdonald
Realtime Worlds

Nesta has called for tax breaks similar to those available in other countries. It said a 4% average annual growth rate could be achieved with effective government support.

Graeme Downie, of Nesta, said the creative and digital content industries were a vital future source of economic growth.

"Finding new sectors to drive economic growth is now essential and the market alone will not be able to create new growth sectors in a severe recession," he said.

"Targeted government intervention in sectors with a high growth potential is vital."

Holyrood debate

Colin Macdonald, of Realtime Worlds, said Scotland was in a unique position of being one of the most successful gaming clusters, having produced some of the world's bestselling videogames over the past couple of decades.

He said: "With a relatively small amount of government involvement, the chances of us producing a greater number of titles and achieving higher levels of success would be boosted hugely.

"With the most successful games generating revenues in the billions of dollars, that level of success would contribute greatly to Scotland's economy."

The Nesta report comes ahead of a Scottish parliamentary debate on the video games industry, following industry concern for the future of the sector under the current tax regime.

Two weeks ago the Scottish Chambers of Commerce called for an immediate 20% tax break for video game developers.

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