The UK gaming industry is worried it could be overtaken by competitors
Video game developers should get immediate 20% tax breaks, according to the Scottish Chambers of Commerce.
The organisation said the incentive - already applied elsewhere in the EU - was needed to ensure UK firms remained competitive.
Chief executive Liz Cameron said the gaming sector was an important growth industry in Scotland.
She said: "Unless the playing field is levelled, UK developers will be unable to compete."
Several hundred people are employed by games developers in the Dundee area, including Realtime Worlds - the company behind Crackdown, Lemmings and Grand Theft Auto.
Studio manager Colin MacDonald said: "A 20% tax credit on game production - which has already been introduced in France and has been approved by the EU - would bring us back into line with our international competitors to whom we are now losing ground.
"Companies will go where the price is cheaper, even if development in the UK is of a higher quality. At the moment the UK is doing great and games are worth more than DVDs or music.
"But we are missing out on the potential of as many as 11,500 new jobs and the chance to bring more investment into the UK game industry."
The president of Dundee and Angus Chamber of Commerce, Gary Langlands, said the UK games industry, once the largest in the world, had been overtaken in the past two years by Canada and South Korea.
"Canada, France, Australia and the US already offer subsidies. Let's see fair play to support our own industry," he added.
In a statement the EU said the French tax break scheme had been authorised for a four-year period for games that met the criteria of "quality, originality and contribute to cultural diversity".