Joe FitzPatrick, Dundee West MSP said today: “Dundee is a world player when it comes to the computer games industry. From the first days of computer game technology Dundee has been at the forefront of the industry. In 1983 Timex produced the Sinclair ZX Spectrum home computer in Dundee and a generation of the city grew up learning the skills that would make Dundee a Global leader.
“One of the early successes of the Dundee computer game scene was the worldwide hit Lemmings, there was also million plus selling titles such as Earthworm Jim and Rollercoaster Tycoon and of course the huge hit Grand Theft Auto created in Dundee by Rockstar. Dundee is still producing world class games, and last year we had the award winning Crackdown developed by Realtime Worlds which sold over 1.5 Million copies in 2008.
“Dundee is home to 10% of the UK’s digital media companies employing 3,500 people across the city.
Dundee is also leading the way in Education and training. The University of Abertay Dundee has been instrumental in supporting the growth of computer game technology and its graduates have set up companies in the city and across the UK. Abertay had the UK’s first undergraduate degree in computer games technology and Scotland has ¾ of the undergraduate courses currently available in the UK.
“Despite the economic downturn the worldwide industry is booming with computer games sales overtaking DVD sales for the first time last year with £22 billion pounds of global sales.”
However, the MSP believes that this is not the time for complacency, particularly in the light of the recent report which suggested setting up a new digital media centre in Salford to benefit from the pioneering work done at Abertay. Commenting on the recent report, Joe said: “At the present we are seeing the first signs that there may be problems ahead for the computer game industry. In terms of games development the United Kingdom is falling behind, and the countries that are overtaking us are those who have given tax breaks for games development.
“Scottish and UK-based firms must pay tax for research and development, while in countries such as Canada and France rebates are given resulting in a competitive advantage over our companies.
“Colin Macdonald, the Studio Manager for Dundee-based computer games developer Realtime Worlds, recently expressed concern that unless the playing field is levelled, and UK based companies receive a similar tax break such as VAT exemption for games development, then the industry will suffer as a consequence.
“Realtime worlds are not alone in this view, Abertay University, the Chamber of Commerce and the computer games trade body TIGA are all saying the same thing, that unless the playing field is levelled we could lose out in Scotland.
“A top game such as Crackdown takes around 5 years to develop and with tax breaks of up 25% in other countries Scotland and the UK are simply not as competitive, and this is why we are seeing the UK fall behind in the development of new games.
“The Industry are calling for a change to the tax regime as there is firm evidence which shows that easing the tax burden on games development creates jobs and grows the industry.
The MSP points to Canada, which has recently overtaken the UK for games development, a 25% tax break on development has been introduced. This has resulted in a flurry of development in Canada and increased those employed in the games industry by 40%, and also led to 1.5 billion dollars of extra investment
In 2003, the French government gave €4 million in aid to French companies, and they were granted a 20% tax break in 2007. The French tax break has proven an aggressive stimulant to their computer game industry, and produced newfound confidence to French game developers.
Joe added: “The Scottish Chamber of Commerce and TIGA have stated that if Scotland were to receive a similar tax break to bring us back into line with our international competitors it could create an extra11,500 jobs and safeguard thousands more in the industry.
“Companies will go where the price is cheaper, even if development in the UK is of a higher quality. Dundee generates 15% of the UK’s total turnover in computer games, some 150 million pounds annually, and will therefore feel more acutely any downturn in the market caused by a loss of competitiveness.
“Holyrood does not yet have the tax powers to directly support the industry, however there is much we can do in this chamber and I welcome the steps taken by the Scottish Government to support the industry most notably through the funding of the Skillset Media Academy at Abertay which will expand on the Universities expertise and specialise in computer game education.
“The new Academy at Abertay recognises Dundee’s importance as a centre for computer games development and will provide the skilled workforce to ensure Dundee continues to lead the field. Providing the training to produce the next generation of computer game developers is however only half the equation. We must ensure that we have companies for graduates to work for and there is a danger that this may not be the case as the current UK tax regime is beginning to hamper development in Dundee.
Concluding, Joe stressed: “It is vitally-important that this successful industry is supported to allow companies to diversify, explore new ideas and develop new games in Scotland. It has been clearly shown that a VAT exemption for games development would stimulate the market and boost turnover. I have added my name to the industry’s lobbying of the UK Government for a change to the tax regime.”