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TIGA’s RIchard Wilson makes the case for tax breaks

By on October 7, 2011
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I don’t support the case for tax breaks for video games in the UK. I believe that we should be able to stand on our own two feet as a fast growing industry and that state intervention in commercial enterprises risks misallocation of capital as companies focus on getting the tax breaks, not building world-leading intellectual property that consumers value, delivered via the business models that they choose. So I oppose tax breaks specific to the video game industry.

TIGA logo

TIGA, one of the two games industry bodies in the UK, is a vocal supporter of tax breaks. Richard Wilson, CEO of TIGA, was interviewed on Five Live yesterday and gave an excellent high-level introduction into why TIGA is arguing for tax breaks. If you are interested in the issue at all, it is well worth a listen. (And if you are really interested, you should get GAMESbrief Unplugged Volume 1: on copyright, politics and opinions, which includes a whole chapter on the debate about tax breaks.)

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
  • I think it is mutually exclusive. Tax breaks become a target. Once you set a target, people start forgetting about the objective (achieve success as an IP creator operating on a global scale) and start thinking about the target (meeting government rules for tax help).

    There is a story, probably apocrophyal of Stalin-era Soviet Union setting production targets. The production target was measured in tons.

    One small factory produced one 3-ton nail, hence hitting the target.

    (I suspect that this is apocryphal because officials in Stalin-era Soviet Union weren’t famous for their sense of humour).

    Economics (behavioural or otherwise) says “follow the incentives”. Tax breaks mean that those incentives are set in stone by a bureaucratic system, not flexible in response to changing markets.

    So I do think it is mutually exclusive

  • Nicholas I don’t necessarily understand why your opinion is mutually exclusive with receiving tax breaks.  We are interested in new business models and new technology for any new IP but if we had a tax break the reinvestment in staff on a small team would be significant.