Sectors: Leisure & gaming

Britain’s video gaming sector has been left severely irked by the coalition government’s failure to announce expected tax breaks in June’s emergency Budget.

Currently, the film industry enjoys a significant 20 per cent tax break, and before the election Labour had suggested extending this to the games industry, which at last count generated annual revenues of £1.73 billion (larger than the film industry) and employs more than 28,000 people. Both the Conservatives and Liberal Democrats had said that the gaming sector would be offered tax breaks, at least before polling began.

In a strongly worded statement, games publishers’ body the Entertainment & Leisure Software Publishers Association said ‘the industry will be rightly puzzled as to how tax breaks can be lauded before an election, only to be seen as “poorly targeted” and scrapped just six weeks later’.

Trade body The Independent Games Developers Association (TIGA) went further still, stating that unless some form of tax relief is introduced, ‘the UK will forfeit millions of pounds in inward investment, jobs will be lost and we will cease to be a leading developer of video games’.

Britain’s gaming sector can ill afford an exodus, since it has faced competition in recent years from a number of countries keen to attract video games companies – France, South Korea and Canada all offer generous subsidies.

Video gaming companies were once popular with investors, but fell out of favour due to their lumpy sales and profit profiles. Today, sizeable British-based developers include Scotland-based Grand Theft Auto developer Rockstar North and Lionhead Studios, creator of the hit game Black & White.