User Control Panel
Search iVirtua
Advanced/Tag Search...
Search Users...
What is iVirtua Exclusive Community?
  • An exclusive gaming industry community targeted to, and designed for Professionals, Businesses and Students in the sectors and industries of Gaming, New Media and the Web, all closely related with it's Business and Industry.
  • A Rich content driven service including articles, contributed discussion, news, reviews, networking, downloads, and debate.
  • We strive to cater for cultural influencers, technology decision makers, early adopters and business leaders in the gaming industry.
  • A medium to share your or contribute your ideas, experiences, questions and point of view or network with other colleagues here at iVirtua Community.
Guest's Communication
Live Chat
Teamspeak (VOIP) Audio Conference
Private Messages
Check your Private Messages
Choose an iVirtua Community theme to reflect your interests...
Business Theme
India/Arabic Theme

Gaming Theme
iVirtua Recommends
Fly Emirates Advertising
Game developers flee UK for Canada, tax breaks
Digg This Digg Topic Tag it on Tag topic on On Technorati Search Technorati Search Post to Slashdot Post to Slashdot
You are currently in Business and Industry in Gaming, Media, Web, IT and Computing
Post new topic Reply to topic
Wed Jun 04, 2008 5:28 am Reply and quote this post
Gaming, as an industry, has become an economic powerhouse. The growth of the industry in the US is exceeding the overall growth of the US economy, and is in fact a bright spotin an otherwise dour picture of the nation's finances. Game developersare creating a product that is doing very well in even the worldwidemarket, and where these companies set up shops, jobs and cash follow.Developers in the UK are now pressuring the government to step up taxbreaks for the gaming industry, and they're wielding a very real stick:developers have already begun to flee for the greener pastures ofCanada.

15 game companies have joined a lobbying group called "Games Up?" tofight for better benefits in the UK. "All our key competitors offer taxbreaks and grants, putting UK developers at a disadvantage," saidRichard Wilson, a chief executive of Tiga, the UK trade organizationfor game developers.
Tiga argues that these tax breaks would, in the long run, help the UK.The organization "cited figures by Games Investor Consulting thatsuggested if its proposals on skills and tax credits were implemented,the British games industry would receive an additional investment of£220m over five years, creating an additional 1,500 jobs, rather thanthe projected decline from 10,000 developers today," as reported by the Financial Times.  
Instead of entertaining these ideas, the UK government seems more likely to fight Canada."The UK government is concerned that state aid offered to computergames companies by a number of federal institutions in Canada may notbe compatible with World Trade Organization principles," an officialfrom the UK Ministry of Culture, Media and Sport told Canwest NewsService.
Paul Jackson, director of the Entertainment and Leisure Software Publishers Association, used even stronger words when talking to the Financial Times about this issue."The Canadians have driven a tank over the French Citroen and have nowparked on our lawn... it is becoming very challenging to keep coredevelopment studios here."  
Searching for "game industry" on the Invest Quebec site,you can see how quickly the big studios are expanding their Canadianpresence. "Ubisoft is one of the world's leading designers andpublishers of video games, with subsidiaries in 21 countries and 3,000employees. Its Montreal studio alone employs over 1,300 people (anumber that is expected to double by 2010) and produces close to 50percent of the titles in the Ubisoft group's catalogue," the siteproclaims.
Or, again, "Beenox Studios (Activision) has been a wholly-ownedsubsidiary of Activision since 2005. The company, which has more than100 employees at its Québec City studio, plans to triple its workforcein the near future by hiring 200 people by 2009."
The economic break given to developers in Quebec is huge: companies cansave up to 30 percent of payroll in tax credits, with a 7.5 percentbonus if the game includes a French-language version. If you've everpurchased a game with instructions in both French and English, even inthe US, there was a very good reason for that.  
The UK government may be barking up the wrong tree, as the WTO TRIMs (Trade-Related Investment Measures) agreement seems to address this directly."The long and short of the TRIMs Agreement is that developed countriescan offer all the investment incentives they please, by tax relief orother means, provided they avoid local content requirements," noted theCenter for Strategic Tax Reform.
Fighting Canada over these issues could be a long process, and inthe meantime game developers will leave the country. The WTO is notknown for ruling on these disputes in a timely fashion, and the casehas to go through the EU before even getting that far.  
This isn't the first time the UK has clashed with Canada over taxbreaks causing businesses to pack up and move to our chilly neighbor upnorth. The last product to cause controversy? Wine.

Contributed by Editorial Team, Executive Management Team
372659 iVirtua Loyalty Points • View ProfileSend Private MessageBack to Top

Related Articles
Post new topic   Reply to topic

Page 1 of 1

iVirtua Latest
Latest Discussion

Latest Articles and Reviews

Latest Downloads
Subscribe to the iVirtua Community RSS Feed
Use RSS and get automatically notified of new content and contributions on the iVirtua Community.

Tag Cloud
access amd announced applications author based beta building business card case company content cool core course cpu create data deal dec demo design desktop developers development digital download drive email feature features file files firefox flash free future gaming google graphics hardware help industry information intel internet iphone ipod jan launch linux lol love mac market media memory million mobile money movie music net nintendo nov nvidia oct office official online patch performance playing power price product program ps3 pst publish ram release released report rss sales screen search security sep server show size software sony source speed support technology thu tue update video vista war web website wii windows work working works xbox 360 2006 2007 2008

© 2006 - 2008 iVirtua Community (UK), Part of iVirtua Media Group, London (UK). Tel: 020 8144 7222

Terms of Service and Community RulesAdvertise or Affiliate with iVirtuaRSSPress Information and Media CoverageiVirtua Version 4PrivacyContact