The video games industry has reacted with dismay at the news that tax reliefs have been dropped in George Osborne’s first budget as Chancellor.
Former Chancellor Alistair Darling announced the scheme in March’s budget in a bid to stem a ‘brain drain’ of game development talent overseas, but Osborne yesterday said they were “poorly targeted”.
However, the editor of a leading video games magazine said axing the tax breaks was a mistake. Guy Cocker, editor of Gamespot, said: "Britain has been overtaken in the games development stakes by countries such as Canada and Germany and this is because it's cheaper to develop video games overseas due to government tax relief.
The goverrnment is treating the video games industry with the same respect as other creative industries within the UK such as music and film
Guy Cocker, Gamespot editor
"It's expensive to develop games in the UK, and talented developers are naturally leaving because of it. Now that the planned tax relief has been effectively abolished, this 'brain-drain' is likely to continue.
“Some of the best and most popular games available are developed in the UK, such as Singstar, LittleBigPlanet and the Grand Theft Auto franchise. The companies who make these titles were scheduled to benefit from planned tax relief and now, of course, that won't be happening.”
The video games sector is now worth more globally than the film industry and contributes £1bn to the UK economy, but the coalition government, said Cocker, were “treating the video games industry with the same respect as other creative industries within the UK such as music and film."
Scottish Chambers of Commerce Chief executive Liz Cameron echoed Cocker's sentiments. "Of serious concern is the lack of support the UK government has shown to the Scottish video games industry,” she said.
“With home-grown developers such as Dundee's Realtime Worlds and Ruffian Games about to launch major new products across the world over the coming weeks, the government have made a bad decision in reversing the planned tax breaks for one of our key industries of the future."
