News
UK development sector 'could become a dead man walking'
Michael French May 27 2008, 9:42am
Comments (26)
Government must act immediately, say Games Up? organisers as campaign goes public
The recently-revealed Games Up? campaign has been officially unveiled this morning, with a warning that 'UK games studios face decline' as 'runaway industry growth will increasingly move offshore'.
Revealed at the weekend in a piece on the Mail on Sunday, the Games Up? campaign is a unified and organised attempt by the UK games industry to successfully lobby Government for a games production tax credit and better higher education.
Backed by UK trade associations Tiga and ELSPA, and a number of leading UK games companies, the move is designed to "warn government that the UK’s world-leading studios face decline despite the boom in the £18 billion games software market".
Games Up? will "raise the profile of the industry in Parliament and the media, and promote ways the industry and government can work together to create new opportunities for UK games. At stake are thousands of high value, ‘knowledge economy’ jobs and hundreds of millions of pounds in investment in UK games studios," says the official announcement, supplied to Develop this morning.
As part of the campaign, the organisers have put together a stack of facts about the strength of the UK games industry - to read them, click here.
The announcement adds: "Games are an increasingly important part of British life, with 60 per cent of the UK population now playing games. Only 3 per cent of games sold last year were rated 18, and quiz and puzzle games are the most popular genre of games. A recent BBC survey found that young people under 15 claim gaming is their favourite entertainment.
New, often British-made games have introduced education, fitness and social elements to gaming.
"Gaming is the future, and the growth of this almost £18 billion global industry is outpacing most other media. But for the past 25 years, the UK has been the third largest producer of computer and video games in the world, generating more than 14 billion pounds in global sales since the early 1980s. The sector employs more than 22,000 people, with 10,000 creative staff in studios spread across the UK.
"In 2006, the UK lost third position to Canada, where extensive, games-specific aid from government has created a world-beating industry from scratch in just 10 years. Canada’s growth outstrips the UK’s by 4:1. As a result an increasing number of UK companies have begun growing faster overseas than in the UK, some even relocating to subsidised territories like Canada. Recently, SCi / Eidos, the UK’s largest games publisher, announced that it would be moving production jobs to Quebec."
Richard Wilson, CEO of Tiga, added that if successful the Games Up campaign could convince UK parliamentarians to implement a tax credit for games production and spark further industry boom.
“With a 20 per cent production tax credit – like that approved by the EU and found in France – we could create many new, high value jobs, millions of pounds in new investment, and promote closer collaboration between industry and education. Without real measures to turn the tide, we’ll see our best people follow the money overseas to where governments are more willing to invest in the future. A great British industry could become a dead man walking, just like the British film industry before Government gave it a tax credit. We must act now if the UK games industry is to remain a global leader."

















Comments
“How do we show support then?”
Posted by: d4rk 3lf - May 27, 11:03am
Where is the official site?
Where is the petition?
I think we'd like to show our support to the cause,
right?
“Re: How do we show support then?”
Posted by: Michael French - May 27, 11:12am
An official site is on the way, but hasn't launched yet so I'm told.
And there's no petition as such as the campaign will be lobbying Government and the media.
I'm sure you can help, though, by a) telling others about the campaign and sending links to other sites to raise awareness, and b) the old fashion route of emailing (or writing a letter) to your MP, local paper, a national paper, etc.
“Re: How do we show support then?”
Posted by: jamba - May 27, 12:32pm
This is a great idea - there have been lots of calls for tax breaks (as Develop has covered in the past few months - I get the newsflashes! ;) of late, but I always wonder if they will fall on deaf ears.
Here's hoping this effort properly organises the industry - and provides a clear message to the outside world - to help make a difference.
“Re: How do we show support then?”
Posted by: Stephen Ryan - May 27, 1:07pm
I do not support tax breaks or any other government breaks for UK publishers. In fact i will actively campaign against them.
This is just the wake up call that sloppy UK publishers need. Any demise comes as a direct result from increase in market competition, years of "me to and same again" titles, poor internal studio communications to raise the level of creativity and the general slavish way publishers treat their staff.
As an ex games executive myself - i say - to hell with them! Grow up - or get lost.
Here is a post that gives a taster of where the UK games knowledge-economy may be heading in the future..
“Re: How do we show support then?”
Posted by: Stephen Ryan - May 27, 1:08pm
again.
http://intrench.blogspot.com/2008/05/computer-games-that-could-destroy-all.html
“Re: How do we show support then?”
Posted by: Anne - May 27, 1:34pm
@Stephen Ryan. You clearly have no idea of the economy of games. With these tax breaks, companys can afford to have more freedom, rather than needing to make 'safe' games that will make up the cost. This is not a move to help the publishers. It's a move to help *developers*. Publishers are moving studios away and developers, who get a rubbish share of the money compared to the work they put in anyway, are struggling in this country.
I don't want to have to leave the country to find work in the games industry.
“Re: How do we show support then?”
Posted by: Stephen Ryan - May 27, 1:49pm
Tax breaks would never be for affording greater freedom to build more valueble content. Tax breaks would simply cover up the incompetences and allow publishers and developers greater freedom to carry on with poor performing behaviour.
I don't think the British people should subsidise a pathetically run sector. It is a myth that developers need to leave these shores in order to develop games. There are scores of examples of development teams building complex software, many based in different parts of the world. Again, it is a consequence of poor production management that requires all team members to be located in one place.
“Re: How do we show support then?”
Posted by: christian - May 27, 2:44pm
It's all about the money, at least when it's noticeable people paying "good money?" for games. The games industry has grown through the will of many single pioneering souls because they wanted to despite of the odds, especially not through the need of requirement, which is how the government is run.
Even if the government did understand the bonuses involved in supporting the industry, there is nothing it can really do. The current courses in the UK Universities are anything but refined, mostly run by "out of date single droplets" that once were active in the industry many years ago and teach the basics by what they once did. Some courses are run by people who still develop games they do it out of free will. The same goes for America, again single soul people who take up what the love to do.
It seems all too childish to watch people pursue development in games for the idea of getting a good salary.
I rather eat in a trashcan to be able to develop games with a few selected friends who feel the same. Also I would rather continue to develop games even if the salary as a tutor in a University is higher. If at all, I would do it out of my own initiative.
... 'UK development sector could become a dead man walking' should be, 'dead men walking again'
like Zombies :D
“Re: How do we show support then?”
Posted by: Rob Grey - May 27, 2:46pm
Stephen - your comments are ridiculous. Was SingStar "a direct result from increase in market competition, years of "me to and same again" titles, poor internal studio communications"? Was GTA? Was Crackdown? Was Burnout?
No, these were games built by talented studios. But since their release the increasingly uneven playing field for publishers has meant that they are now more likely to commission such projects as long as they are developed in lower-cost countries, such as Canada.
A tax break would help keep some (not all) commecial, business spending focused on UK studios.
And remember part of the campaign is to improve education - tax breaks are just one part of Games Up.
“Re: How do we show support then?”
Posted by: Jon Hare - May 27, 3:11pm
The economic problem is more complex than that.
I challenge anyone to name the last british made and british owned blockbuster title that was not a sequel.
The strength of our country is actually about creating good new Intellectual property (in many industries). Unfortunately this is directly at odds with the international obssession with quarterly growth for shareholders and backing "safe" games. No non licensed, original product can come with such guarantee. But what the british development sector proved, before the current US led, hyper commercialised, hyper conservative gaming market took hold, is that we are generally a SAFER bet than most other countries to initiate great Intellectual Property and make it work. What is happening on a global level is tha the big companies with theor own IP already safely in place are now doing everything in their power to block new stuff from breaking into the big league. From a purely business perspective if you already have 5 big IPs under your belt you do not need to establish any more, you just need to keep the opposition shut out from making any major inroads to your market. Another way of increasing your power is to buy up all the lazy routes to success such as big film and sports licenses that become available.
In many ways the amazing success of GTA gives a misleading perspective to the otherwise struggling creative sector in the UK.
What we need to impress on the government is that making original games creates IP which brings genuine long term value into the country. But it also involves a lot of R&D, which like the pharmacutical industry, without extensive testing and experimentation it is very hard to guarantee quality which puts off would be investors. What we need is government investment into UK generated IP that can compete on a world stage. Not as Steven points out into ill managed development and publishing companies. A good model may be to set up companies for specific products and have the government invest specifically into these concepts (like private investors) rather than invest into the development and publishing companies themselves
“Re: How do we show support then?”
Posted by: Stephen Ryan - May 27, 3:35pm
You are right there Jon.
I too very much believe that there has been insufficient focus and committment on developing strategic IP. Short-term vs. Long Term strategies etc.
To my mind this smacks of an every man for himself policy, vs. a policy where UK publishers/developers collobarate in the enrichment and value of collective IP and in so doing kick the arse of the competition outside.
If there is one area where UK government could get involved - i too - reckon this it.
I believe that the industry is under-represented in the area of collaboration of strategic intellectual property investments.
I would certainly suggest the industry get out of the "paradigm groove" that it has now found itself in and begin to consider using the really smart people for positioning products for maximising entrenchment value and optimal return in the future.
“Re: How do we show support then?”
Posted by: jimBoo - May 27, 5:11pm
Too late... UK game studios will disappear soon. I'm moving!!
“Look at the film industry”
Posted by: Jonathan Kent - May 27, 6:51pm
Entertainment companies are mobile. It's a fact of life. Bollywood producers shoot in Yorkshire, Hollywood loves Toronto, Ireland has become a major movie production destination.
The UK film industry thrived in the 80s, not making British movies true, but providing the tech support for Hollywood; Spielberg and Lucas relied heavily on British technical support.
Tax regimes have to recognise that fact without becoming utterly beholden to the entertainment industry.
We're moving to a post industrial economy in the West. Our main resource is our talent. We spend millions on education to produce the people who will in turn produce IP - the oil of the 21st century. As the world economy grows and as populations grow richer an increasing proportion of family expenditure goes not on essentials but on luxuries and high amongst those is entertainment of which computer games are an incresingly important part.
In the coming decades the UK economy will increasingly rely on the creative industries.
More than tax breaks the industry needs government to understand its importance - out of that understanding (one that should encompass all the creative industries from biotech to rock n roll) may come a sympathetic tax regime. But we absolutely need to foster an environment that makes Britain a world class creative hub to take on and beat LA, Hong Kong and Mumbai.
I don't think that politicians have grasped it but Shakespeare, The Beatles and Stephen Hawking are all ultimately the product of a culture that sets us apart from most other countries in our sheer creative impetus. We should regard that resource with no less gravity than the Saudis look upon their oil reserves.
“Disruptive Innovation?”
Posted by: Stephen Ryan - May 27, 7:17pm
The games industry grew out of the dust, I believe that many of the significant market players over the next 5-10 years will also rise out of the dust. They will not repect the IP and asset landscape and barriers to market that are currently fought over. They will simply alter the paradigm for game design, production and marketing and in so doing disrupt the entire structure of the games industry as we know it today.
They won't need any tax breaks to stay in business either.
That's "Disruptive Innovation", for you!
“Re: Disruptive Innovation?”
Posted by: jamba - May 27, 7:39pm
"Alter the paradigm"?! What does that even mean? Or rather, before some pedant tells me what paradigm means; HOW will they alter the fundamentals of the industry? And WHO will those companies be?
“Re: Disruptive Innovation?”
Posted by: Stephen Ryan - May 27, 9:11pm
Every generation of industry follows a paradigm (a particular way of thinking). When the industry begins to get lame, it either dies entirely, is monopolised by the big boys - or falls prey to disruptive innovators (those who think in different paradigms).
Over the years we have been led to believe that only a few real sales channels to market exist and that the barriers to entry for small developers to participate and compete are getting higher and higher. Enter - the publishers right?
To Disruptive Innovators - this story is BS.
It is only true if you believe that the only way to build a profitable games business is by using the same techniques, methods, technologies and sales channels as everybody else.
Its only true - If you don't believe in creating new products and new markets.
Its only true - if you want to sit on your hands - and moan to the British Government all day.
Change paradigm if you dare! Die if you don't!
“Re: Disruptive Innovation?”
Posted by: jamba - May 27, 10:06pm
No one is demanding tax breaks so that publishers can maintain a grip on the market. They are demanding tax breaks to ensure that the market remains. And remains so that the picture you paint - of an evolving market and business environment - is allowed to prosper.
“Re: Disruptive Innovation?”
Posted by: Stephen Ryan - May 27, 10:25pm
That's the point - tax breaks won't make a jot of difference to the industry as a whole. It might bail a load of unprofitable developers out for a while and enable publishers to squeeze developers a little more, but it is no long term solution to increasing the competitiveness of the UK development community.
“Re: Disruptive Innovation?”
Posted by: Junior - May 28, 4:14am
Why are they lobbying for issues regarding education? Surely universities like Teesside already turn out more applicants a year than can get jobs. I myself have been trying to find junior artist positions for months now, with little success.
“Re: Disruptive Innovation?”
Posted by: Stephen Ryan - May 28, 11:48am
There is no shortage of talent. What is missing is the intent and motivation to build killer games.
The really smart investors will have pulled their money out already and will be looking to invest in developing new much more profitable markets.
UK smarts is as high as they have ever been, but the industry won't make best use of this talent by banging the same old drum as everyone else.
I believe it is time for UK developers to start taking a good look at themselves and realising that the reasons they are largely uncompetitive is that they are pushing yesterdays paradigms. This is not a question of talent, this is a question of strategic intent on the part of the executives of the business. A question of engineering high profit IP, with optimal positioning, high entrenchment factors and integrated viral market channel building agents.
Strategic Intent - backed by strategic delivery!
“Re: Disruptive Innovation?”
Posted by: Anon - May 28, 12:09pm
But, Stephen, developers have been saying for ages that there IS a shortage of talent - at least, a shortage of quality talent. There are only a handful of Skillset accredited games courses, but the industry needs many more. I see what you're saying about the busineses in the games industry needing to tidy up their acts, but there's no smoke without fire when it comes to a burning issue like education.
“Re: Disruptive Innovation?”
Posted by: Stephen Ryan - May 28, 12:52pm
If businesses in the games industry tidied up their acts,
they would be able to assimilate young people into their ranks and educate them there. If i want to learn to fix a car - i start with fixing cars. I don't go to college to learn it on a black board. If i want to learn AI, I grab a load of books, visit a load of websites, talk to my colleagues and then try and hone this knowledge toward developing some code for the studio.
Where did the early pioneers in the games industry come from? Certainly not via some "already out of date" University course, that's for sure. Today, you train these guys for 3 years, they turn up at the door , you set them a test - they fail and then they realise its 3 years wasted.
This education thing is a smoke screen. What we are really saying here is that industry executives are not up to building sustainable business models, that are competitive and nurture the unbridled talent that is no doubt available.
“Re: Disruptive Innovation?”
Posted by: Jon Hare - May 29, 3:21am
What we are really saying here is that modern industry executives are not capable of building sustainable business models that also factor in the 50% of them that are surplus to requirements and eat up most of the profits.
What our industry in the Uk actually suffers from is a lack of dynamic and independent business men at the helm of our publishers. People like Jon Woods (Ocean), Dan Thompson (Renegade) and Jim Darling (Codemasters), all incredibly successful and all of whom are as about uncorporate as you can get. These are the guys we really miss in the industry, british style businessmen with money, balls and instinct and who make things happen.
I believe Steohen calls them "Disruptive Innovaters" but the innovation in this case is in the boardroom, not in the GDD
“Re: Disruptive Innovation?”
Posted by: Stephen Ryan - May 29, 9:21am
Yes, they used to call it leadership. But they couldn't work out what it was - so they dismissed it.
“Re: Disruptive Innovation?”
Posted by: BJ - May 30, 12:54am
Like I said in an earlier post, every business would like tax breaks.
Sadly the UK is just too expensive in every respect. We are being destroyed by cheaper countries, in every field - China supplies our habit for cheap hardware, and shortly Bollywood will be supplying our TV programming - don't forget the third most popular boy baby's name in the UK is Mohammed.
Our biggest problem is that 7 out of 10 of the UK workforce is employed (directly or indirectly) in the public sector...and the remaining 3 work for foreign owned companies (and the US based companies see us as CHEAP LABOUR!).
We need to hammer the current obession for selling off UK companies, and pressure the government to improve the market for ALL private industry, not tax it to the hilt to pay the wages of public servants.
I just dont think it's going to happen - witness the cries of anguish from the unions whenever Gordon announces "efficiency measures" in local government.
How can they justify spending £20 billion on ID cards & NHS IT when they cant balance the budget?
As for a shortage of talent...yeah right. I've been in the electronics / software biz 30 years this August. Think I can get another job in the games industry? Even when I got to interview , I couldn't pass the "tests" - I must be a total numpty - yet somehow I rate a Principal Engineer title in my current sector.
Some of you need a serious reality check.
“Re: Disruptive Innovation?”
Posted by: Stephen Ryan - May 30, 1:04pm
BJ, The tests are set by inferior minds, meaning that they are inevitably set artificially high, This creates the illusion that everyone working in games is extremely smart and everybody who cannot get in - are stupid. It also suggests that there is a shortage of creative/technical talent in the UK. Which of course, there is not.
Of course much of the inefficiency in the games industry is not down to poor technical and creative ability, it is down to inferior leadership. That's where the tests should be set.
I have requested that the government look at this, rather than how they can give tax breaks to unprofitable studios and invest in university courses.