Tax breaks “have no impact whatsoever” when it comes to creating an environment for start-up studios and growth.
That’s according to Jason Della Rocca, Canadian indie evangelist and co-founder of Execution Labs, who told attendees at Game Connection America today that the oft-lauded tax credits of his home market weren’t as influential as people think.
Speaking at the Games Industry Support seminar – a session in which game associations and trade bodies from around the world come together to discuss topical issues – he said that the most important thing when growing your market is nurturing start-ups, but tax breaks are “irrelevant” to this.
“The real investors don’t go in at the beginning; they want to see some sort of progress before they can come in,” said Della Rocca (pictured). “You want to catalyse the growth and production of start-ups with original IP, whether you use an industry programme, or a government fund or whatever.
“The tax breaks that Canada is so famous for is irrelevant to that. They’ve had no impact whatsoever on catalysing start-ups and the creation of original IP. Tax breaks come 18 months after the fact; it’s useless from a start-up perspective.
“I was summoned to Parliament a few weeks ago to give a testimony about the impact of games on the Canadian economy, and that was the message I was trying to get across: they can’t just be satisfied with Canadian tax breaks, they need to think more holistically about to support the industry. It’s great to have the likes of EA and Ubisoft in Canada, but it’s not enough to sufficient to build a vibrant, sustainable ecosystem. They need to be thinking about start-ups.”
His point was later countered by Andrew Greenberg of the Georgia Game Developers Association, who proudly declared that his home state recently voted in tax breaks with a lot of government support.
“While the tax credit is not specifically what gets the investors in, it is what gets investors interested in our sector,” he said. “And for the interest we don’t see from venture investors, we see great success with angel investors.”
The comments come just hours ahead of the UK budget, during which the government is expected to announce the long-awaited and previously delayed video games tax relief for British developers.
GDC 2014 - Live! Breaking news and up-to-the-minute developments: HERE