26/06/08 Newcastle Journal

IN the Canadian province of Quebec, thousands of young talented individuals spend their days deep in a pixelated universe, mapping out ancient kingdoms, creating epic battles and breathing life into an array of weird and wonderful characters.

Video games giant Ubisoft currently employs around 1,300 people in Montreal, with plans to double this figure by 2010, and has even developed a Canadian Ubisoft Campus to capture and develop the talent of budding games makers.

And the company is not alone with a number of other major developers like Activision and Eidos continuing to pour vast sums of investment into the Quebec economy and embarking on far-reaching recruitment drives.

The Canadian government brings millions of dollars into the country every year by luring international games firms with tax breaks and other financial incentives.

Thousands of miles away in Newcastle, Ubisoft’s UK studio is considerably smaller, employing around 110 people in a facility behind the Central Station.

The operation is enjoying modest growth but is being held back by what developers are calling a lack of support from Westminster which is pushing the British games industry dangerously close to decline.

Ubisoft has a planned pipeline to create 3,000 jobs at its various sites across the world but, according to the head of the company’s North East operation, it is unlikely that a significant portion of these jobs will come to our region.

As much as studio manager Gareth Edmondson would like to see hundreds of Ubisoft jobs cross the Atlantic and come to the North East, he fears that the UK Government’s lack of support for the games industry means this is highly unlikely to happen anytime soon.

The UK is now the most expensive country in the world in which to develop games – a crying shame since we’ve also proven we have the talent to create the very best in games such as the recent smash hit Grand Theft Auto IV.

While games firms begin to plan their exodus from these shores, across the Atlantic in Canada, the government gives video games developers the chance to save up to 30% of payroll in tax credits and they even get a 7.5% bonus if they make a game which includes a French-language version.

Similar financial incentives are mirrored in France, China, the US and Australia. In France developers are rewarded with EU-approved tax credits, a national prototype fund and various grants.

Meanwhile in the United States EU-approved tax credits, national prototype fund and grants given in two regions are all available to games firms.

“There’s no incentive for Ubisoft to expand here,” says Mr Edmondson, who recently joined a group called Game’s Up? which plans to lobby the Government into making the UK more attractive for international games companies.

“Ubisoft is growing by 3,000 people in the next four years but I’ve only got 10 vacancies in the UK. We would like to create 1,000 jobs in Newcastle and we have the opportunity to do that and the investment is there but it’s just too expensive.”

For the first time in 25 years the UK is on the verge of falling out of the top three games producers in terms of value despite the fact that the sector brought around £1.4bn of investment into the country in the past two years.

According to Games Investor Consulting, if proposals from the Games Up? campaign are implemented, the UK games industry would receive an additional £220m of investment over the next five years.

The organisation also believes an additional 1,500 jobs would be created, rather than a projected decline from the 10,000 developers working today.

In Middlesbrough, video games firm Atomic Planet employs around 50 people – although a move abroad may be considered if the current industry climate persists.

Operations director Jason Falcus says: “It’s a very competitive industry we are in and publishers are finding the UK very expensive.

“We are losing our competitive advantage while we have some of the most talented people in the industry.

“Canada gets all those government subsidies and I think it’s about time that our Government acts.”

For Mr Falcus the key to the problem is raising awareness among politicians of the potential rewards to the economy that the UK games industry could bring.

This is especially difficult given the negative attitude many MPs tend to have towards video games – a medium often linked to obesity and violence among children.

He says: “The violence surrounding the games industry is sensationalised in newspapers. There are just as many violent films as games and I think most politicians are just jumping on the bandwagon.

“There are games out there which promote fitness like Wii Fit and games that encourage people to increase their brain power.

“I think the Government is starting to listen and hopefully they will start to do something about it but it’s something we’ve been campaigning for years.”

The Game’s Up? campaign, which is backed by more than 80 UK developers, is looking for a 20% subsidy from the Government – compared to the 40% available to firms in Canada.

Rick Gibson, co-founder of Games Investor Consulting, who helped launch the campaign says: “If we see the video games sector decline and then fall, it would be the first loss of a digital industry.

“It’s ridiculous that the UK is facing decline while the global industry booms. You don’t fix your roof when it’s raining. Do we wait another five years until the gaming industry has left these shores? Grand Theft Auto IV (GTA) was great but how many more GTAs could there have been?”

The developers who back the campaign admit that the current economic climate means their cause may take a back seat to other crisis-hit sectors like retail, housing and haulage on the Government’s agenda.

However, the lobbyists are confident they will ultimately get what they are looking for and have appointed PR executive Angie Moxham, founder of 3 Monkeys Communication, to lead the charm offensive.

Ms Moxham, who helped position Lara Croft – Tomb Raider as the first ever cyber sex symbol, believes the key to winning Government support is to highlight the positive aspects of the games industry.

She says: “The games industry has been superb at promoting its products but that has come at the expense of reputation management and we have got to tell the good stories about the industry.”

Expect headlines like WiFit cuts obesity levels in half and Brain training used to boost GCSE results in a newspaper near you soon.

300

Games studios in the UK

10,000

Games development staff employed nationwide.

£4bn

Amount of revenue generated in the UK economy by the 10,000 development staff

£1.4bn

Amount of investment into games development in the UK made over the last two years

£220m

Level of investment that would be expected to come into the UK over the next five years if proposals on skills and tax credits were implemented.

The UK is facing decline while global industry booms. You don’t fix your roof when it’s raining