The latest report of the British trade agency TIGA shows that the total value of the game industry in the country is £12 billion (approximately US$163), creating more than 73,000 jobs, of which 28,000 are developers. The industry also contributes Pound2.2 billion (about $3 billion) in tax revenues.
It is a matter of concern that the game industry has effectively contributed to development outside London, where the GVA represents 38 per cent (£2.1 billion), the North-West (£443 million), Scotland (£393 million), West Midrands (£362 million) and East England (£362 million) have formed important industrial clusters.
The report states that the British play industry faces the challenge of investment attractiveness: the current video game expenditure credit provides only 20.4 per cent tax relief, which is lower than the international level. Seventy-eight per cent of small and medium-sized British play studios have fewer than five employees and are constrained by the small size of assets and the lack of financial records and uncertainty about business success.
TGA proposed three reforms to this end: an independent play tax credit of 53 per cent for Pound23.5 million, an increase from 34 per cent to 39 per cent of current video game expenses, and a 100 per cent qualifying expenditure credit. These measures are expected to generate self-financing through increased tax revenues, while creating billions of pounds of added value and tens of thousands of jobs.
“Our game industry is a successful example of potential”, said Dr. Chad Wilson, CEO of TIGA, “but the current competitive environment is not fair, and we are at a disadvantage in attracting domestic investment, as the current video game spending credit policy is less generous than other countries’ tax incentives. Upgrading the VGEC tax rate is the most effective way to stimulate industrial development, both by reducing development costs and by encouraging investment and creating high-skilled jobs.”
