Data, Digital and Creative – ‘what’s going on in gaming?’ – a blog by Karl Hilton

It’s been a very positive time in the creative digital economy this summer.

For decades the video games development industry has enjoyed seemingly unfettered growth regardless of the wider economic picture. This has been true globally and nationally where the UK has been one of the most creative and highest quality developers of entertainment software and technology. However, the last recession saw the UK industry hit hard by studio closures caused by the drying up of funds from the big US publishers who cut their spending dramatically. The UK industry, which employs around 17,000 people across all of its sectors has also suffered from intense cost competition from several US states and Canada who were offering generous tax breaks to encourage games companies to grow their businesses in those locations. In combination with the recession, the result has been a ‘mini-brain drain’ of talented developers with exceptional programming, art, animation, audio and design skills crossing the famous pond for a career in North America.

This summer has seen a change begin to emerge. TIGA, the video games trade body has been following a relentless campaign for the last 5 years to highlight the unlevel playing field that UK games companies were facing and asking for the government to recognise the importance of the sector and take action. In the 2012 Budget the Government announced a 25% tax relief for video games development in the UK, which after a frustratingly long delay caused by an EU investigation, was finally approved. This tax break has now been in effect from April 2014 and TIGA estimates it will help sustain and create around 10,000 jobs in the UK industry and generate a tax gain of over £350 million over the next 5 years for UK Plc.

Recently several Canadian regions have now scaled back their generous tax relief schemes and early anecdotal evidence is that big international developers and publishers are once again looking to invest in the UK development sector which has retained a ‘German’ like reputation for quality throughout its existence. The next year will be an interesting period.

Games Tax Relief workshops are being held by TIGA for developers all over the country and one of these events was hosted in Nottingham in June for local developers, which was well attended by companies of all sizes from small micro-start-ups of one or two individuals, to companies employing more than 100 people.

With regional growth funds available though Creative England and other enterprise bodies, the continual growth of the mobile and tablet gaming markets and competitive Games Tax Relief and Research & Development Tax Relief too, it is not unreasonable to argue that there has rarely been a more positive or opportune moment to make digital entertainment in the UK and particularly in Nottingham.

To read more about tax breaks in video games, please click here.