Kotick cries foul over UK's decision to end tax relief for game development

Activision Blizzard's Bobby Kotick has hinted at a possible shut down of the company's British office following the UK government's decision to scrap tax relief for the video game industry.

SpeakingwithThe Telegraph, Kotick called the action by the Coalition Government a "terrible mistake", and added that Activision Blizzard is not ruling out a UK withdrawal, noting, "There are so many other places that are encouraging the video games industry."

Whether Kotick's reaction is indeed a thinly veiled threat or simply a heated response, any such move to close Activision's office in Berkshire would mean the displacement of its 600+ experienced UK developers and industry staff. According to Kotick, maintaining the tax relief would go a long way towards keeping UK's homegrown video game talent within its borders, rather than risk losing them to countries that are more hospitable to video game development.

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Since the government's decision to forgo the tax relief last June, TIGA - a representative for game developers and associated businesses in UK – has also been fighting for its return. In arecent statement, the association called for the return of gaming industry tax incentives as well as a stronger investment in gaming related education and training.

“At present, video game developers in the UK are at a competitive disadvantage in the struggle to secure finance from overseas publishers,” said Richard Wilson, chief executive of TIGA. “Our key competitors provide tax breaks for games production or other significant financial incentives. The UK does not. Investment and jobs are drifting away to other countries that offer tax breaks for games production.”

Speaking to the industry's potential, Wilson warned: “The video game sector offers opportunities for growth and high value, high technology job creation for the UK ... However, our video games industry will not fulfil its potential and the UK economy will not fully benefit from this growing market if the Government neglects the sector.”

Jan 3, 2011