In a statement released today, the European Commission set out the reasons for the decision: “In April 2013, the Commission opened an in-depth investigation because it had doubts that the aid was necessary. There seemed to be no obvious market failure in this dynamic and growing sector and games were being produced even without state aid. The Commission also considered that limiting the expenditure qualifying for the tax relief to goods or services ‘used or consumed’ in the UK would be discriminatory. The UK and other interested parties were given the opportunity to comment,” the Statement reads.
Vice-President in charge of competition policy Joaquín Almunia is then quoted as saying: “Our initial doubts have been dispelled. The proposed aid for video games is indeed focusing on a small number of distinctive, culturally British games which have increasing difficulties to find private financing.”
In response to the good news, UKIE, the Association for UK Interactive Entertainment, has issued their own statement. “This is a huge boost to the UK games and interactive entertainment sector and the start of a great new era of games production in the UK. We are delighted the European Commission recognised the clear market failure for the production of games with a British and European flavour, using UK-based creative and highly skilled talent,” said CEO Dr Jo Twist, before going on to say: “I’d like to thank all the hundreds of games companies and individuals across the country who have worked so hard collectively and who have played such a crucial role in getting to this point. The next strategic priority for us now is in applying pressure in different ways so that games businesses can access more programmes which support access to international markets, training and finance so we can be fully recognised as a sector that can lead the world again.”
In addition, a number of notable industry professionals have put their views across, stating their pleasure at the news. Noirin Carmody, COO of Broken Sword developers Revolution Software, had this to say: “This is very welcome news for the UK games industry that will secure economic and cultural sustainability for the industry as a whole. The tax breaks will maintain creativity and innovation in established games businesses like Revolution resulting to increased growth and encourage new start-ups.”
So far it’s not known just how much relief will be granted, or how much the measure will cost the UK Taxpayer. But the news will no doubt be welcomed by the wider industry, which has been hit hard over recent years as companies moved overseas to countries such as Canada, while many others have found themselves out of a job – with the most recent casualties being a number of Sony-owned studios, which suffered huge layoffs due to Sony’s continued attempts to try and streamline its business and reduce costs.