Vince Cable, Secretary of State for Business, Innovation and Skills, says the government was aware it might lose developers and games firms to other nations and was determined to take action.
The secretary was one of the guests of honour at last night's Create UK launch, kicking off a new strategy that will unify Britain's creative sectors such as games, film, TV, fashion and more.
Before the ceremony kicked off, we were able to grab a few minutes of his time to hear his thoughts on the impact the games industry has on the UK economy.
"Games is a really important part of the creative industries," he told Develop last night. "It contributes to all parts of the UK – some of the main areas of productions are areas like Gateshead and Dundee, it's not entirely London-driven by any means.
"We recognised a few years ago that there was a danger of the games industry and animation drifting away to countries like Canada, and we knew we had to do something about it. So the tax has been put onto a level playing field and as a result of that, the games industry is now flourishing here. It also provides very high value employment, which is something integral to our recovery."
As Develop readers will know, recent cuts to tax breaks in Quebec and Australia have seen developers in those markets lose a lot of the financial advantages they once had, but Cable was keen to stress that there is more to building the creative industries than fiscal incentives.
"Our objective was to make sure we weren't being unfairly undercut by the Canadians, and I think we've achieved that objective, but an awful lot more is involved than just tax breaks," he said. "Britain is generally a good place to be. The kind of thing we're know focusing on is helping the industry with training, access to finance and trying to make sure the industry does settle and develop here."
He went to praise Ian Livingstone, newly appointed BIS ambassador for all creative industries. You can find out what Livingstone had to say about his new role right here.
The games industry is a major pillar of the UK's creative industries, generating more than £1bn last year according to promotional materials at last night's event.
There is currently more than 150 games in development across the UK, a full list of which we've compiled right here.