UK computer games industry asks for government help

The UK games industry is being held back by the government's tax regime, skills shortages and a lack of finance, says games industry body TIGA.

TIGA research, based on a survey of games businesses, looked in detail at the state of the UK video games development sector at a time when the UK is falling down the world rankings.

Until 2006, the industry was the third largest in the world based on revenue. However, the UK slipped to fourth position in 2007 and is expected to fall to fifth place in 2009.

This is primarily because of the substantial support given by overseas governments to their video games industries in comparison to that given by the UK government, claimed TIGA.

Richard Wilson, CEO of Tiga, said, "The UK games development sector is an industry of the future. It is a highly skilled, knowledge-based industry that has huge potential.

"However, the significant support overseas governments give to their games industries puts the UK games industry at a severe competitive disadvantage. This factor, coupled with difficulties in sourcing finance and skill shortages, are currently barriers to growth and must be addressed."

The research looked at the main barriers to growth over the past 12 months. The report found that 41% of firms cited foreign government subsidised competition, and 31% said the domestic tax burden on business was a problem.

Wilson said, "The UK games development industry is competing with one hand tied behind its back. Competitor countries from Canada and the USA to France and South Korea are benefiting from government support, most notably tax breaks. This puts the UK at an immediate disadvantage."

When asked what government policies could help their business, 85% backed tax breaks for production, 77% recommended more liberal R&D tax credits, 51% called for lower corporation tax, and 50% advocated lower rates of national insurance contributions.

100 CEOs and managing directors of UK gaming businesses were surveyed for the report.