Games firms call for tax breaks to prevent skills exodus overseas

Published on Tuesday 27 October 2009 19:33

FOREIGN competitors are trying to "poach" talented Scottish computer games designers by exploiting their tax advantages, a trade body will warn today.

Tiga, the UK computer games trade association, will tell ministers and MSPs during an event at Holyrood that rivals in Canada and France are trying to lure programmers abroad.

The association will call on the Scottish Government to retaliate by doing more to attract international games firms. Ministers will also be urged to invest more money in computer games design courses at Scotland's universities and colleges to help to tackle the skills gap facing the sector.

Scotland's games industry employs more than 700 people and has a combined turnover of 20 million. The broader digital media sector – which includes graphic designers and other allied industries – employs 42,000 and turns over 3.2 billion a year.

Tiga will also renew its calls for tax breaks for the computer games industry to help it tackle foreign competitors, with MSPs being asked to put pressure on their colleagues at Westminster and the Treasury.

Richard Wilson, chief executive of Tiga, told The Scotsman that many of Scotland's rivals – including France, China, South Korea, Australia and some American states – offer tax breaks for games productions.

He said a tax break costing about 192m could safeguard 3,500 graduate-level jobs in the UK over the next five years and increase tax receipts by 415m.

Wilson added: "We want the Scottish Government to do more to emphasise that Scotland is a great place to do business.

"We have good universities, like Abertay and the West of Scotland, producing good graduates, so we can compete on skills as well as costs.

"I have Tiga board members who have been contacted by state authorities in Canada trying to poach them to move their businesses to Canada and close down their UK operations.

"I'm not saying the Scottish Government has to be that aggressive, but it must pursue games companies around the world and encourage them to invest in Scotland."

Wilson said Scotland should target big names in the industry, such as Microsoft, Nintendo and Sony. He said the examples of the success of Scottish businesses – such as Real Time Worlds and Rockstar North – could be used to lure more firms.

Skill shortages are still a problem, Wilson added, saying that one games company could hire only 50 per cent of the staff it needed from Scotland and had to turn to the rest of the UK and even overseas to plug the gap.

Colin MacDonald, the studio manager at Dundee-based Real Time Worlds, said his company was lucky in that it could recruit a large number of graduates from Abertay University, but that his competitors were struggling to hire staff.

MacDonald – who is also speaking at today's event, which has been organised by Tiga and the National Endowment for Science, Technology and the Arts (Nesta) – added: "A tax break would make a huge different. It's a global market – our biggest markets are the US and Japan. With all the tax breaks available in places like Canada, France and Singapore, our competitors can make their games 40 per cent cheaper, putting us at a disadvantage."

A spokesman for the Scottish Government said: "Our agencies are adopting innovative funding approaches in this area.

"Scottish Development International has also supported a significant Scottish presence at this year's Game Developers Conference in San Francisco – a key shop window."