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UK tax situation "sucks" - Ninja Theory

"It scares me," adds Jagex CEO.

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Image credit: Eurogamer

Top UK developers Jagex (RuneScape) and Ninja Theory (Enslaved) have told Eurogamer exactly what they think about the coalition government's about-turn on tax breaks for the videogames industry.

"I think it sucks, frankly," said Tameem Antoniades, co-founder of Ninja Theory. "With those tax breaks, with that support, we could have been... We could have grown UK talent and aimed for number one - to be the top producer of videogames in the world. We would have attracted the investment needed to achieve that."

"Without it, there's a danger we just don't grow."

Mark Gerhard, CEO of Jagex - the UK's biggest and richest publisher - said he was "scared" of what the ramifications might be.

"It scares me, because the UK loses out massively, not just on a game employers, but the whole engineering, sciences that are required to feed this. We do stand a risk of losing our very best people to territories that have advantageous tax breaks," he warned.

"It's something [the British government] should do if they want to keep a healthy, vibrant local community."

Gerhard added: "I know, personally, that there's been a whole exodus of talent [abroad]. Highly skilled individuals will be employed anywhere, in any country. We're already in the middle of it. It's something the government has to respond to soon."

Tameem Antoniades' new game Enslaved places a hefty emphasis on a film-like presentation and recreating professionally acted sequences in game. But to achieve that, Antoniades and Ninja Theory have to pay a higher price than their cousins in film.

"It's outrageous that when we do a shoot for a game we have to pay more than movies do, because they get tax breaks for doing that and we don't. So the lines between games and movies are blurring but the tax breaks aren't," he said.

Gerhard praised UK developer union TIGA and the work done lobbying for tax breaks. But while he's outwardly proud to be a pillar of the UK developer scene, Gerhard accepts it "comes at a premium".

"You could set up a development shop at half the cost in Vancouver. The government would pay 60 per cent of your salaries for 12 months, generous tax breaks, universities right next to your development studio - there's a lot of very compelling reasons to move. If the business was driven by money we certainly would," Gerhard revealed.

"I'm using Canada as an extreme example, but you've got - across the pond - France. They pay almost half the tax for creative development."

"There's a huge amount, huge amount, of R&D that we do as a business that just goes into remaining relevant. These are big investments. Right now, the only way that pays back is if we also release a product that is a big success and we can recoup the entire costs.

"There's no recognition that you're advancing the science and the space," he added. "Whereas if we were doing biomedical, for example, there would be."

In June, George Osbourne - Chancellor of the UK's coalition government - said "planned tax relief for the videogames industry will be cancelled". At this month's Develop Conference in Brighton, Tory Culture Minister Ed Vaizey said the games industry "would need to make its case again".

In closing, however, Gerhard urged perspective before pitchfork campaigning for tax breaks.

"At the same time it's hard: no one's got money - the government's run out," he said. "Why should the UK industry get tax breaks when they're cutting hospitals and police? And that's a difficult tension. I don't have the answer to that."

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