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The case for tax breaks was never really made, says Simple Life Forms Tadhg Kelly

By on July 12, 2010
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In a detailed comment in response to a GamaSutra with David Braben about the UK government’s U-turn on tax break for video games, Simple Life Forms’ creative guru Tadhg Kelly weighed in with some strong comments. I reproduce them here with permission.

I’m not sure that it’s to do with the way that the new government values the games industry per se, but rather the Conservative attitude to government help for industry in general. Politically, they’d actually rather get rid of or reduce the amount of subsidy that flows into the UK film industry, but can’t as that would lose a lot of support.

However they have effectively ended or closed a variety of regional media development efforts and several other so-called austerity measures. The games assistance should be viewed among the backdrop of all of that activity rather than be seen as a special victimisation.

All that being said, the case for tax help for games has never really been properly made and it was a contentious issue. While TIGA and the like argued that it was a natural right (if film had it, why not games) yet the effect of such schemes on other media like film is repeatedly shown to affect the kinds of projects that get greenlit and – ultimately – make those industries utterly dependent on funding and the politics of funding. This is not something that I think would be a positive for the British industry overall, as the spectre of cultural tests and the like are bad.

The reduction in corporate taxation from 28% to 24% is thus more significant because it provides substantial savings of a generalised nature. It’s not an ultimate panacea but it’s pretty good and could provide much breathing room for UK publishing in general.

Lastly, it could simply be the case that the UK economy is always going to be more conducive to smaller-scale indie development. With the advent of App Stores and social platforms, the cost of publishing neat game ideas is rapidly declining and there is an opportunity for motivated developers to basically reboot the UK industry as a next generation of what used to be called bedroom coding. To add tax breaks into that mix thus seems more of a ploy to prop up the existing mid-sized difficult-to-find-viability companies that have been waning all across the UK in the last few years. And is there really a compelling case for doing that?

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com