U.K. Video Game Makers Concerned About Cultural Test for Planned Tax Benefits

An industry group says that the successful "Grand Theft Auto" franchise could be among those releases that won't be ineligible for incentives.


LONDON - More than three-quarters of Britain’s video game developers plan to apply for tax incentives that the government intends to launch next spring, but some have expressed concerned about a condition that allows only games with British cultural content to be eligible, the Financial Times reported.

The tax benefits are part of a broader incentives package planned for the creative industries in the U.K., including offers for high-end TV productions in the vein of Downton Abbey.

Games industry representatives worry that big games franchises, such as Grand Theft Auto, could be excluded from the incentives. The series, one of the most successful games franchises from the U.K., could fail the cultural test because of its fictional U.S. setting, the FT said.

Under the rules envisioned for video games, the tax breaks, targeted to amount to a quarter of production costs, would be for products based on a British book, historical event or a sport designated as a "national sport," such as soccer. The FT cited Electronic Arts’ Harry Potter and Fifa soccer games franchises and Activision’s World War II shooter series Call of Duty as examples of games that would face no trouble getting the tax benefit.

Richard Wilson, CEO of U.K. games developers industry association Tiga, told the paper though that it would be much more difficult to judge the cultural relevance of a science fiction or puzzle game or highly fictionalized games.

“Many developers are concerned that games, which are set in a fictional setting, but nonetheless have a ‘British feel’ to them, should also be able to pass the cultural test,” Wilson said.

He argued that Grand Theft Auto should qualify, because it features British humor and commentary on U.S. culture along with British music.

The government will look for industry input on some of the details of the planned tax incentives, and Tiga is expected to voice its concerns as part of that process.

The U.K. has fallen from the rank as the third-largest video games maker in 2006 to the sixth spot in 2011, according to the FT. About 3.5 percent of global investment in the games sector goes into the U.K., down from 10 percent in 2000.

But the expected tax incentives have led such video games giants as Activision, Microsoft and Konami to promise to open new U.K. studios.

Email: Georg.Szalai@thr.com
Twitter: @georgszalai

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