Anti-Brexit games industry campaign group, Games4EU, today published a report on the impact that a no-deal or hard Brexit would have on the UK games industry. The 51-page report looks into the numerous damaging outcomes of such a move – both to campaign against our exit from the EU, and to prepare business for the (increasingly likely) worst-case scenario.
As we know from the recent VGTR report, the games industry contributes 47,620 jobs and £2.87bn to the UK economy. With the global nature of interactive entertainment, the impact on the industry will be huge. Given that the government is keen to promote both creativity and technology in the future economy of the UK – and the games industry is both – it must be pressured to find a solution to the problem which it created by holding the first referendum.
Jas Purewal, a leading solicitor in the games sector with Purewal Partners, led the production of the the report and commented:
“A no deal Brexit would be a disaster for interactive entertainment, a hard Brexit not much better, and we've been sleepwalking towards it since 2016. The legal, regulatory and tax rules in areas like customs, VAT, data, immigration to name a few - this is the bedrock on which UK interactive entertainment was built. If the UK leaves the EU things will be far harder for us but there has been very little industry discussion and no guidance from key industry stakeholders so far.
“This guide and the other work Games4EU is doing is intended to help the industry and gamers to understand, prepare for and fight the very real dangers posed by Brexit.”
The report points out six main issues for the industry in the case of a no-deal or hard Brexit:
1) Interactive entertainment businesses will face considerable uncertainty and bureaucracy, driving up costs and impeding day-to-day business. There are particular concerns around access to personal data; changes to the UK/EU customs, VAT and intellectual property law systems; and falling out of the EU’s regulation and dispute resolution systems.
2) Products and services will be more expensive, harder to access, delayed or even partly or wholly unavailable in the UK - this includes physical products like games consoles and merchandise, online subscription services from Netflix and Spotify to video game pass services, online games and entertainment channels and ‘just in time’ delivery systems like Amazon Prime over time.
3) UK-based businesses will be compelled to relocate to EU in whole/part over time in order to comply with rules for EU trade access and to keep rights and benefits unavailable to UK-based businesses post-Brexit.
4) Loss of access to EU talent and friction on UK/EU travel will discourage high-skilled creative/technical staff from working here, causing overtime talent scarcity and a brain drain.
5) Loss of consumer rights such as refund/return rights, fair labelling and EU mobile data roaming.
6) Cultural diminishment: interactive entertainment is an important part of the UK’s soft cultural power and many people have told us about Brexit having a negative impact on the industry’s values of community.
Games4 EU founder George Osborn (not that one), also founder of Go Editorial, called for everyone to take action now, lobbying their MP, before it’s too late:
"Brexit offers no notable benefits to a sector already operating on a global stage and this means we must oppose it as fervently as possible while we still can. It is only a matter of weeks until Parliament takes part in the 'meaningful vote' that will set the shape of our relationship with Europe for decades to come. And it may only take a handful of votes to swing the vote one way or another.
“So please take time out of your week to write to your MP, visit them at a constituency surgery or get in touch with them in any way you can. We have one last shot to make a difference; we must make it count."
While Tracey McGarrigan, co-founder of Games4EU and CEO at Ansible Comms was keen that everyone, whatever their feelings on Brexit, come together to challenge government for the best possible outcome:
"We really welcome everyone, regardless of their feelings about Brexit to date, to read our guide and contribute to the debate now. This isn't an exercise in project fear; it's us collectively challenging and asking important questions of a government that continues to fail on delivering any meaningful information; can we still buy and play our favourite games? Can we continue to run our studios or develop / sell games worldwide with ease? This is our extensive examination of the benefits we get from being part of the EU that our industry currently relies on in order to simply function, which we predict will result in great harm if stripped away."
Industry veteran Andy Payne, who wears many hats including at AppyNation and Gambitious, warns that UK companies will be forced to set up EU offices – according to the government’s own advice:
“Data is key to the videogames industry. It is clear that a data adequacy arrangement post Brexit will at best be part of the transition period trade negotiations between UK and EU and could mean UK games companies are in limbo for years, which is not conducive to stability, let alone growth!
“But in the case of a no deal or hard Brexit, UK based games businesses that do not have an office in the EU will have no choice but to open an office in the EU in order to fully function to the level we do now. This is not rumour, this is from the actual UK government’s actual advice given within their technical papers recently published.
“If that happens it will threaten smaller videogames businesses and it will ask the real question around where any corporation tax will be paid. This would be a total disaster for UKPLC and the UK games industry!
The Yogscast’s Mark Turpin comments that influencers will also be impacted, with uncertainty on travel and standards: “There are numerous impacts large and small that will affect content creators with the Brexit we are currently facing. Simple and hassle-free movement around Europe to gaming events, cheap mobile internet for live-streaming on the go on around Europe and access to a much larger pool of skilled and diverse creators to create more successful varied products for a global market are just some of the things we are endangering.
“As with many other export industries, content creators will still have to abide by European guidelines on content standards for anything available to European viewers, just with no coordinated British legislation acting in our interests for how these guidelines evolve.”
Nick Button Brown, chair at Outright Games and advisor to many others, notes the impact of hiring and investment, some of which is already apparent.
“Britain makes some of the best games in the world, and to do that we need the best people. Being able to hire the best people around the EU brought in some fantastic talent, delivering great games and helping teach the UK employees. Making the UK unwelcome to that talent really damages what we can do Even slowing down hiring in such a fast moving industry damages what we can do, damages the quality of the games that we can create.
“The Brexit vote has had an impact on inward investment in the UK in terms of the slowing down non-UK companies from setting up offices and studios, companies have changed or toned down decisions that they had made and that reduces the opportunities available in our creative and talented industry.”
We’re more than happy to receive any positive comments about the possibilities of Brexit, (Bueller? Anyone?), feel free to get in touch at the usual address.