Written evidence from the Black Company
EXECUTIVE SUMMARY
If the government wants to help the games industry,
rather than through relief on corporation tax, it should do so
by improving the quality of the talent pool. By supporting education,
apprenticeships and internships within games developers, and making
it easier and cheaper to hire talented but inexperienced staff.
In doing so, it will help maintain the UK's competitiveness as
a creative centre, and the returns in increased profitability
for UK developers should pay for the incentive schemes. Any incentive
scheme which rewards large non-UK publishers will in my view be
less effective than one which supports the myriad of smaller developers,
many of which are wholly UK-owned.
RESPONSE
1. Sadly, since the original request for
input to this inquiry, the Scottish games industry has suffered
a serious blow in the loss of Realtime Worlds. I would like to
start by raising my voice against the ridiculous notion put forth
by various MPs to the media that the previously cancelled tax-breaks
proposal would have somehow prevented this company's failure.
The scheme proposed relief on corporation tax, and Realtime Worlds'
issues were certainly not down to being too heavily taxed.
2. I run a small studio that provides development
support services to the wider games industry, primarily in the
UK. We are members of the trade association TIGA, whom I believe
will also contribute to this inquiry. TIGA were instrumental in
persuading the previous government to take up the proposed tax
relief scheme, but I must confess that I am not and never have
been entirely convinced that their proposal is the best approach
to boost the industry.
3. When the current government announced
the scheme would be scrapped, I cannot say that I was concerned.
It had never been implemented, only proposed in loose terms by
the previous government. I doubt it would have ever made it to
implementation. Its absence will not hurt the Scottish games industry,
where the only sizeable developer left (Rockstar North) is foreign
owned, and solid for other reasons than financial ones. The smaller
developers left here are not in a position to expand massively,
tax-breaks or not.
4. While corporation tax-breaks would I'm
sure attract inward investment to the UK as a whole, their nature
is such that the biggest winners in such a scheme are large, multi-national
publisher/developer corporations. Implementing tax breaks might
attract them to form or expand studios here, but aside from the
direct investment here, their profits still largely go abroad.
Once in place, it seems to me that removing those tax-breaks would
quickly lead to studios being declared unprofitable and being
shut down again, such is the fickle nature of games development.
5. Furthermore, subsidising the industry
solely because the French and Canadian governments do seems to
me to be a dead end road that can only end in subsidies escalating
out of control. Yes, we are losing development talent to Canada,
and the more developers that go out of business here, the more
of our talented workforce will emigrate there. But when studios
go bust, their talent doesn't just leave the country, some also
leave the industry, and our available workforce pool is diminished.
The tightening belts of the publishers and financiers of the industry
don't allow developers the leeway they need to recruit and train
new talent, and that hurts the industry both now and in the long
term.
6. I don't want to see subsidies for general
game development. I don't want to see incentives to make culturally
British games (although I do think that there should be more of
them made). What I think the government should be doing is to
support what makes the UK competitive in the world market: our
creative talent. We need more developers doing innovative, creative
things. We can't compete with Eastern Europe or Asia on labour
cost, but we can compete on labour quality. But for that developers
have to be able to take in new talent, new ideas, and reinforce
a waning labour pool.
7. I would propose subsidies for education
and training. And since the only kind of training that is really
effective in the games industry is on-the-job, what I would like
to see is more support from the government to get students and
young people inside developers and doing real work. Apprenticeships
for game developers almost. I'd like to see real financial support
for developers who want to take on inexperienced but talented
people. That might take the form of subsidised placements, internships,
or PAYE relief on students. The universities like Abertay are
doing well with their industry outreach efforts, but with better
financial support they could do far better. The developers want
the talent, but they can't afford to take risks in hiring, or
to get the people up to a useful level of productivity. The universities
want to get their graduates into the industry. The government
wants the students in jobs, and it wants the developers healthy
and profitable.
8. So in summation, if the government wants
to help the games industry, it should do so by reducing the real
costs UK developers have: the staff. In doing so they will enrich
the talent pool, maintain the UK's competitiveness as a creative
centre, and the returns in increased profitability should pay
for the incentive schemes.
8 September 2010
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