When I was young I studied economics, both at A level and as a part of my accountancy training. The Economist has been regular reading ever since and now my wife is studying economics as part of her MBA, which leads to some interesting conversations! All this has made me a free market fundamentalist. So to meÂ subsidies and tariffs are a total anathema which distort trade. Everything works better with a level playing field.
So I don’t like what the Canadians are doing in the games industry, and under WTO (World Trade Organisation) rules it may be illegal. But it works, according to the Entertainment Software Association of CanadaÂ they now have 260 development and publishing companies directlyÂ employing 9,000 people. Even their finance minister, Jim Flaherty, says “This kind of innovation, coupled with the highly skilled jobs in this sector, are integral to Canadaâ€™s future prosperity”, which makes him a lot more visionary and incisive than anyone in the British government.
Canadian aid is provided at state level and an example is the 37.5 per cent contribution towards development salaries and a three year tax holidayÂ in Quebec. They also provide a lot of help and commercial assistance. So it is not surprising that a steady stream of British development staff and development companies have made their way across the Atlantic. To the point that Canada has usurped the UK as having the third largest game development industry in the world, behind the USA and Japan. The fact is that with high tax and no support it is now quite foolish to develop in the UK.
I was a member of the Games Industry Forum, a government/industry talking shop that met regularlyÂ at the then DTI in London. At these meetings I argued that there was no reason for the video game industry not to get the same treatment as the film industry in the UK, especially with the creation of a Game Council to match the already existing Film Council and Music Council. Obviously nothing happened due to that lethal combination of government apathy and industry infighting (ELSPA didn’t want their supremacy as the industry organisation challenged).
So it is really, really nice to see that the French government have asked theÂ EU commission if it is alright to put video games on the same tax regime as film. Even nicer the commission has said yes. So the way is clear for the UK government to do the sensible and obvious thing before our entire industry emigrates to Canada. But don’t hold your breath.
Of course everything would be a lot better if the UK film industry and the Canadian game industry were treated just like any other industry. A level playing field. Now we have the stupidity that the UK economy is paying for large numbers of people to train to become gameÂ industry professionals. And who, as soon as they become net contributors to the economy, get the first plane to Canada.
You can all see where this is going. Gaming is set to become the biggest media industry in the world. And a big chunk of it will be based in Canada. And very little will be based in the UK. Governments sometimes really are not fit to govern.