Exclusive Interview on the Future of the UK Gaming Industry

Exclusive Interview on the Future of the UK Gaming Industry

Jul 22, 2010

The UK games industry is great. We know this, it was us here in good ol’ blighty that came forth Lara Croft, GTA and erm, Leisure Suit Larry. But seriously, this small island is awash with creative talent when it comes to game development, alongside our games market being the third largest in the world… So, what are the reasons for our UK games industry to be so panicky when it comes to their future?

Us gamers may be getting excited over releases coming out later this year, or indeed next (I’m thinking Un-British Halo: Reach and Gears 3 for starters..) but those in the industry are making predictions of a very different kinds. The UK games industry needs some serious support if it is to continue growing and developing some of the world’s best games. So, what are the issues facing the UK gaming industry?

We have a ‘brain drain’. More and more bright, young and talented games developers are being headhunted to leave the UK, and head for a better future abroad. This may not be a problem in other major industries in which the top % of workers are poached, as our companies steal from other nations as a matter of course. The problem with the UK games industry is…it’s all one-way traffic…out of the UK.

The UK gaming industry has been starting to show cracks for some time. Unlike other global markets, the problem lies not with the world-wide recession, but with lack of support from both the public and private sector. Although our home-grown games industry is doing better than film or television in terms of exports, a general lack of investment means that it would be economically more beneficial for our developers to up-sticks and move abroad, taking their studios and our home-grown games away from us.

Other countries, like France and Canada receive more governmental support, like tax-breaks, meaning that UK developing studios face tougher challenges when it comes to competition. It was recently announced that the new coalition government was not making any plans to change this, although to be fair, the previous government didn’t either…

We Are Arcade has an exclusive interview with Nicky Morgan MP, who sits on the board of the Business, Innovation and Skills Select Committee for the current government, and asked her what the government intends to do to promote UK Gaming…

It seems like the argument for tax-breaks within the UK games industry is a long-running one. Labour did promise to complete a review and possibly change the current tax incentives for the industry, which the current government has decided not to carry out with. What are the main reasons for this decision?
Our country has the worst budget deficit of any major economy. The public finances are in the biggest mess that any of us have seen in decades and the Government is going to have to take tough action to put our economy back on track. The state of public finances means that we cannot responsibly cut all the taxes we would like to at this time but the Government does value the video games industry and my colleague Ed Vaizey MP is working hard to ensure greater recognition is given to the contribution that this industry makes to our domestic economy. The Chancellor has said that he will reconsider his position once the economy is on a stable footing.

Why does the UK film and television receive more support from the public sector and government? Why isn’t support extended to the UK games industry, which is overall larger than film and television and therefore a better investment to the future?
I expect it is because the UK film and television industries are seen to appeal to a greater number of people and are deemed more accessible to more British consumers that the UK games industry is presently. Perhaps a cultural change led by this generation of the technology conscious along with an availability of more affordable games in the future will mean that this changes.

Are politicians out-of-touch when it comes to newer industries, like gaming? Is it seen as a ‘closed’ industry, with little or no outside voice to communicate with government departments and committees? Do you know of any MP’s that actually play games? Should UK game developers create better relations with politicians, perhaps setting up a games room in the House of Commons in order for backbenchers to play Gears of War?
I can tell you that there is, in fact, a thriving All Party Parliamentary Group for the Computer and Video Games Industry which successfully relays changes and developments in this industry to decision makers by holding a range of engaging and informative events throughout the year. I can also tell you that Eric Pickles MP, in his former role as Conservative Party Chairman, was just one of a number Members of Parliament who seized the opportunity to try out Rockstar on Xbox 360 at last year’s Conservative Party Conference.

How do we stop the ‘brain drain’ facing the UK games industry? What incentives, (perhaps financial, perhaps lifestyle) can we offer our young talents in order for them to stay in the UK?

It is a matter of some concern that China and Canada have already announced their intentions to compete directly against the British within the games industry, not least because it is likely that these countries will poach some of our games industry specialists in their plights to succeed. But this is the case for most if not all British industries at the moment and it has always been the case. Competition can be highly advantageous for both consumer and competitor and I am confident that we too will be able to poach workers from abroad and gain an insight into the competitive advantages that competing countries in turn develop. It is also worth remembering that most countries have been hit by this economic downturn. I am confident the impeccable reputation that the British gaming industry has achieved on the global stage over the last 50 years, will be as strong as it ever was by the time that our economy and the economies of our close trading partners prosper once again.

How can the UK increase its lead on other countries when it comes to game development? Should we here in the UK, be dissatisfied that other nations are catching up with us when it comes to game development?

The British gaming industry is a growing market in both Britain and abroad and whilst the financial success of companies already in this industry will attract new competitors to the market, it will take a great deal of time and effort for emerging games markets to develop the networks and technological advantage that we have worked hard to achieve. The interest of other nations is also indicative of the rising levels of interest in this industry, which could bring with it a world of new opportunities for the British gaming industry.

In the long term it is true that the Government does need to show greater recognition of the importance of this industry for the British economy, and I am confident that it will when we are financially able to do so, we will.

We have the one of the largest games markets on the planet. What can we do to get young people taking ‘serious’ qualifications (maths, physics, programming etc.) in order to be picked up by game studios in the future?
The games market is still a very new industry, even in this country, but gaming is becoming increasingly popular as generations go by and as a result so too is the possibility of working within this industry. The Government has made clear that it intends to reform the current educational system to ensure that more students leave school with good exam results, in S.T.E.M. subjects; science, technology, engineering and mathematics. We are also supporting businesses to make apprenticeships and work experience more readily available, in order to provide potential employees with the opportunities they need to gain vital experience in this field.

The current government has offered tax-breaks and support for new business to start-up, develop and grow. How can this be of benefit to the games industry in the future?
The Budget contained a raft of measures that will provide real relief for small business owners. In particular, the Government has outlined a comprehensive package of tax reforms, designed to give the UK the most competitive corporation tax environment in the G20. The headline rate of corporation tax will fall from 28 to 24 per cent over the next four years, and the small profits rate, applicable to small companies, will be reduced to 20 per cent from April 2011. This will give Britain the lowest rate of corporation tax in the G7 and the fifth-lowest in the G20. Meanwhile, the Government will increase the secondary threshold at which employers pay National Insurance Contributions to stop, in large part, the National Insurance increase inherited from the last Government; tackle the regulatory burden that strangles so many firms with, among other things, a one-in-one-out rule for new regulations and a review of employment law; and temporarily increase the level of small business rate relief. These changes will be hugely beneficial to British businesses, including those in the games industry.

Should we send David Cameron’s and Nick Clegg’s children some game discs through the post, in order for them to succumb to pester power, and offer more support for the UK gaming industry?
I am sure that The Prime Minister and Deputy Prime Minister’s children would be delighted to receive games from you through the post, my own son would be equally delighted!

Nicky Morgan MP