Oxford Economics confirm the importance of the UK games industry and the case for a tax break

October 13th 2008

Tiga said today that new research carried out by Oxford Economics into the UK video games sector confirmed the economic importance of the industry and reinforced the case for a tax break for games production. The report by Oxford Economics was commissioned by the Games Up? campaign in response to a request by Her Majesty’s Treasury for evidence about the case for a tax credit.

The research produced by Oxford Economics shows that the UK games development industry:

• supports a total of 28,100 jobs, allowing for those directly employed (10,000 in games development) and for the multiplier effects;

• contributes over a billion pounds per annum to the UK’s Gross Domestic Product (GDP), taking into account direct, indirect and induced impacts; and

• provides£420 million for the Exchequer in tax revenues, when direct and multiplier impacts are taken into consideration.

The UK games development sector contributes to the economy in other ways:

• the industry invests 14% of its turnover in research and development (R&D), some of which spills over into other sectors;

• games developers are clustered around 8 hubs in the UK, the effect of which is to enhance productivity within the industry; and

• the video games sector generates cultural spillovers, including strengthening the UK’s brand image, its record for technological achievement and the promotion of tourism.

Richard Wilson, CEO of Tiga, said:

“This report confirms that the UK games development sector makes a significant impact on the economy in terms of employment, contribution towards the UK’s GDP and in respect of tax receipts to HM Treasury. Equally important are the facts that the games industry’s R&D activities spill over into other sectors and that video games contribute to the culture of the UK, reinforcing awareness of our technological reputation and in some cases even promoting tourism.

“The UK games development sector has inherent strengths including a highly qualified workforce (80-90% of a typical Tiga member’s workforce are qualified to degree level) and experienced management teams (42% of Tiga members’ organisations have been in business for six years or more). This enables our industry to create high quality games on time and at great value.

“The UK Government and the Scottish Parliament have an opportunity to build on the intrinsic strengths of the video games development sector by introducing a tax credit for games production. If this measure is adopted then the UK games sector will continue to make an important contribution to the UK economy in respect of employment, GDP, tax receipts and R&D and cultural spillover effects.”

Ends

Notes to editors:

1. Tiga is the national trade association that represents games developers in the UK and in Europe. We have 157 members, the majority of whom are either independent games developers or in-house publisher owned developers. We also have outsourcing companies, technology businesses and university departments that are members.

2. Tiga’s vision is to make the UK the best place in the world to do games business. We focus on three sets of activities: political representation, generating media coverage and developing services that enhance the competitiveness of our members. This means that Tiga members are effectively represented in the corridors of power, their voice is heard in the media and they receive benefits that make a material difference to their businesses, including a reduction in costs and improved commercial opportunities.

3. The Games up? campaign commissioned Oxford Economics to analyse the direct, indirect and induced impacts of the games industry; the catalytic impacts including cluster effects, wider social benefits and R&D spillovers; and the expected growth of the industry with and without a tax break. The report, The economic contribution of the UK games development industry (Oxford Economics, October 2008), was delivered to HM Treasury on October 13th 2008. Richard Wilson, CEO of Tiga and Jamie MacDonald of Sony Computer Entertainment Europe and Tiga board member, are both members of the Games Up? campaign’s steering committee.

4. For further information about Tiga, please contact: Dr Richard Wilson, Tiga CEO on:

E-Mail: richard.wilson@tiga.org

Web: www.tiga.org

Phone: 0845 0941095

Mobile: 07875 939643


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