UK trade association TIGA says that Square Enix's announcement this week of a new studio in Montreal further highlights the need for the UK government to introduce targeted tax breaks for the videogame industry.
Square Enix will increase headcount at Deus Ex: Human Revolution developer Eidos Montreal by 100, with the new Square Enix Montreal creating 150 jobs when it opens next year. In a press release, TIGA called on the coalition government to look again at Games Tax Relief in its autumn statement and March budget.
Gareth Edmonson, the TIGA vice-chairman who joined mobile game company Thumbstar Games as CEO this week, said: "This decision by Square Enix is a blow for the UK and European game development sector. The UK and Europe generally have excellent creative development teams. Unfortunately, the UK and other European states (with the exception of France) lack a taxbreak for games production.
"We need a well-targeted tax break to enable the UK to compete on a level playing field."
This week TIGA also focused on tax breaks in a call for government to help videogame start-ups. As well as Games Tax Relief, it suggests a creative content fund be established to improve access to finance; for the scope of the existing small firms R&D tax credit to be extended to include IP protection, design and premises costs; and for tax relief on in-house training to address skills shortages.
TIGA CEO Dr Richard Wilson said: "Now is the time to promote new sources of growth in export-focused, high-skilled and high-technology sectors such as videogame development. [Our proposals] would give a major boost to kick-start the growth of more start-ups and small businesses."