Canadian dev: Tax breaks far from essential

In a surprise disclosure that could put UK calls for game tax breaks in an unflattering light, the largest independent studio in Canada has said the state support measures have never once helped it secure a publishing deal.

Remi Racine, the CEO of Behaviour Interactive (formerly A2M), told Develop that UK developers are still beating the firm in the race to sign contracts with publishers.

He did say that tax breaks were nonetheless “pretty helpful”.

“We calculate tax breaks in our price structure when pitching projects, and explain that around 15-18 per cent of production costs will go back to them.”

In a new interview with Develop, Racine added: “When you think about it, that’s a 15 per cent saving on production costs, but it doesn’t make better games, which is what publishers ultimately want.

“Tax breaks help, of course, but there are some very clever people in the UK who have beaten our studio at signing a deal with a publisher. It’s not, clearly, all about savings that tax breaks can give.

“It’s all down to the pitch. There’s always a price a publisher has in mind for a project, so a saving isn’t as crucial as the pitch itself.”

Racine – whose experience in Montreal has helped him secure the seat as chairman of trade body Société en commandite Stationnement de Montréal – said that tax breaks had helped grow the games industry Quebec.

“We’ve had huge investments from Ubisoft, THQ, Warner and Eidos around here, the workforce is growing fast,” he said.

When asked how many times tax breaks have helped Behaviour secure a publishing deal, he replied: “Oh no, never. Never.”

Racine said there was much still going for the UK games industry:

“In the UK you have something that we don’t. You have a history and pioneers. We don’t. UK developers have a lot more experience than our Montreal staff.

“In fact we have hired a lot of British developers, and at around director level – of which we have fifty staff – we have about six people, so twelve per cent. My studio creative in Montreal is British-born, and my studio creative in our Chile studio is British-born. Our lead director of portables is British-born.

“But tax breaks are not essential. Some of the biggest successes in the industry, like Grand Theft Auto, are still created in the UK. There’s many more; Lionhead for example.

“Canadian studios are losing as many pitches as UK ones. I have competitors in the UK, and I lose business to them. Never have I won a pitch on price. We win on how we pitch.”