September 28, 2009
TIGA, the trade body representing the UK games industry, today released the results of its bi-annual Business Opinion Survey (full survey is attached for reference).
The TIGA Business Opinion Survey, supported by the accountancy firm and TIGA member French Duncan, compiles feedback from TIGA members and is designed to provide TIGA and the development community with a clear understanding of how games businesses are operating in the current economic climate and their likely prospects over the next six months <1>.
TIGAs second business opinion survey demonstrates three principal findings:
Firstly, game developers still feel that Government policy towards the UK games industry is unfavourable. This is because no tax break for games development exists in the UK. In contrast, competitor countries including Canada, parts of the USA, France and South Korea are all helped by their governments, often with generous tax breaks.
Secondly, access to bank finance remains difficult with over 40% of respondents saying the situation has worsened over the last six months and a further 40% finding no improvement or difference from six months ago. Over half of businesses surveyed are also less optimistic about the outlook for investment.
Finally, despite the lack of Government support and the difficulties in the financial market, on balance more businesses in the survey are optimistic about their organisations prospects over the next six months and nearly two thirds of businesses surveyed believe their company is performing well. This optimism is underlined by the finding that nearly 80% of businesses expect their business to get a little or a lot better over the next six months and nearly two thirds of businesses expect modest employment growth over the same period.
Richard Wilson TIGA CEO states: Overall the results of the second TIGA Business Opinion Survey point to a cautious optimism among the majority of games developers with regard to the overallbusiness outlook for the next six months.
However, UK developers are held back by the lack of availability of bank finance and many are set to reduce investment. The time is right for the Government to introduce a Games Tax Relief for UK game developers. Research submitted by TIGA to the Department for Culture, Media and Sport shows that a Games Tax Relief could over 5 years create 1,400 jobs (graduate or the vocational equivalent) in the studio sector, increase investment by games studios by 146m, increase direct and indirect annual tax revenues by 133m and boost the sectors contribution to Gross Domestic Product by 323m. By year 5, for every 100 of investment by the Government in the Games Tax Relief, the industry will invest 176.