Scots jobs gloom as computer gaming company collapses

SCOTLAND's reputation as a world leader in the computer games industry has been dealt a body blow after an internationally renowned gaming company went into administration putting hundreds of jobs at risk.

• Screenshot from Realtime Worlds' online game APB

The Dundee-based firm Realtime Worlds, which employs 250 people, has become a victim of the economic crisis despite being regarded as being one of the biggest players in the global computer games market.

The announcement came after it was revealed last week that the company, founded by Dave Jones, creator of the computer game classics Crackdown, Lemmings and Grand Theft Auto, was to lay off 60 workers.

Scottish ministers expressed dismay that the firm had gone into administration.

Realtime World's difficulties coincided with Alex Salmond's visit to Scandinavia where he is attempting to sell Scotland as a place where 21st-century industries based on the latest technology can flourish. The First Minister was in Oslo, Norway, extolling the virtues of Scotland as a global centre for renewable energy.

Housed in a former jute mill in Dundee, Realtime Worlds had recently launched its latest title, an online game called APB (All Points Bulletin) in which players take the roles of police or criminals and try to outwit each other in the imaginary city of San Paro.

Despite the game being launched in a blaze of publicity on both sides of the Atlantic, APB received mixed critical reaction. Demand was said to be "lacklustre", even though it was billed as "this year's hottest action game".

APB, which took five years to develop, was said to have struggled to attract enough subscribers following mediocre reviews.

Administrators have been appointed and a consultation process on the firm's future is under way.

Ken Pattullo and Paul Dounis, of business rescue and restructuring specialist Begbies Traynor, have been appointed joint administrators of the firm which has its main development operations in Dundee.The firm's parent company head office and online operations are in Colorado.

"We are currently involved in a consultative process with the 200 staff employed in Dundee," said Mr Dounis who confirmed that the administrators will employ some of the 42 staff in the US parent company to assist in selling the business.

He added: "Our intention is to continue trading the company while we attempt to find a going concern buyer which will safeguard the future of the business."

Last night the enterprise minister Jim Mather said: "These reports are potentially extremely disappointing and I am concerned for Realtime World's employees, their families and the wider community, for whom this will be an anxious time.

"Scotland's games developers are telling us what the industry needs and this government is listening - it is disappointing that the UK government has not. Until Scottish-based games developers are allowed to compete on a level playing field, we run the risk of losing existing businesses to other countries and failing to attract new companies and highly-skilled jobs to this country.

"The government will do all we can to minimise the impact of today's announcement and protect these local, highly skilled jobs in line with our efforts to support Scotland's key creative industries - and their global reputation for excellence."

The computer games industry is still smarting from George Osborne's emergency budget which decided against going ahead with a series of tax breaks for the sector that had been promised under the previous Labour Government.

Scotland's competitors in the games industry in countries such as Canada, the US and France all have tax breaks -- in the case of Quebec in Canada, the government pays 37.5 per cent of the salaries of the developers - giving them a clear advantage.

The Scottish Affairs Select Committee has launched an inquiry into the scrapping of the 20 per cent tax break, which industry experts claimed would safeguard 3,550 jobs in the UK.

The Dundee-based Labour MSP Marlyn Glen said: "This is enormously concerning.

"The Scottish Government needs to step-in and do whatever it can to support this pioneering company and help protect the jobs of the 300 people who work there. It is particularly concerning his development comes shortly after the new coalition government announced that they were taking away the tax break announced by Labour for Dundee's games industry last year."

Dundee has developed an international reputation for computer games with Abertay University at the forefront.

Professor Bernard King CBE, Principal and Vice-Chancellor of Abertay University, said: "As the jewel in the crown of Dundee's computer games development sector, Realtime Worlds epitomises the creativity and determination of the entire Scottish industry."It is unfortunate that market conditions have dictated this drastic step."

Shadow Scottish secretary Jim Murphy called on the Tory-Lib Dem coalition to rethink its policy on tax breaks for the industry, saying: "This underlines the need to support the computer games industry better.

"I cannot understand why the government has scrapped the tax relief scheme Labour announced in March.

"We need Dundee and the whole of Scotland to be a world leader in computer games."

Realtime Worlds was founded in 2002 and is headed by Dave Jones, the designer and creator of more than 15 hit titles.

Its online operations are based in Boulder, Colorado, with its main development offices in Dundee.