Gaming Industry – Scottish economy has to be in it to win it

He’s absolutely right. More can and should be done to help nurture the development of this lost soul of the Scottish economy industry. This is a sector that has risen at a meteoric rate globally in recent years. While Scotland’s players have seen great success – the likes of Edinburgh’s Rockstar North developing the ground-breaking Grand Theft Auto Series – it could be argued that overall the industry has not fulfilled its potential.

Historically Scotland seems to punch above its weight in this industry but how much revenue from global hits like GTA been reflected in the Scottish economy? We have to protect the reputation that’s been built and extend it to make a greater more sustainable impact on the wider economy. The potential is phenomenal. The sector is massive globally and we have a right to have a bigger share of that pie.

To do that we need to come up with a concrete, joined-up support plan that incentivises businesses in the gaming industry and also bridges the ongoing skills gap challenge.

The discussion on tax breaks for the game industry has been on-going for years.  Indeed the UK Government introduced a new tax break for the UK gaming industry in April 2014 which attempts to redress the ground lost by the country in a competitive international market where other countries were receiving more support from their Governments.

As with all tax reliefs, there are a number of potentially complex rules involved and criteria that need to be met. For example, in order to qualify, a ‘cultural test’ must be met, to evidence that the game is ‘British’, although this term is actually quite broad and can sometimes stretch as widely as entities within the European Economic Area. Generally, the game must achieve 16 points, with points awarded for nationality of lead characters, location, citizenship of various personnel involved in the game production, and so on.

While this is a step in the right direction there is an opportunity for Scotland to go a step further. Could a lack of specific support regionally lead the talent and rewards of that talent to more hospitable climes?  This is what has happened in other creative industries such as cinema.

The potential of the sector and its impact on the wider Scottish economy crucially relies on small aspiring companies as well as the long established large companies. One of the main issues with game production is time to market, and the high risk involved with producing a game. With the level of investment high upfront, companies tend to go where they feel supported.

If we’re not careful the Scottish lead in this booming global sector will be stolen as tech start-ups are nurtured and encouraged elsewhere. The resurgence of Irish economy and increased devolution in English cities makes that threat very real.

So what about skills? There is demand from both industry and students for necessary skills. We know that Scotland has the talent. The games industry provides an excellent incentive for children to undertake subjects which are beneficial to the economy as a whole. It is therefore key that such skills areas are prioritised at the highest level and we have a cohesive strategy to ensure a good flow of new blood into the sector. Producing students of suitable calibre for the games industry has the beneficial side-effect of producing highly skilled and talented individuals to work in IT.

So let’s take gaming seriously. It is a ripe industry with huge potential to flourish and have a massive impact on Scotland’s economy. With the right ongoing support from the Scottish and UK governments we might just produce a golden age of young, smart, talented entrepreneurs who can boost Scotland’s economy further.

Win, win!

An insight by Andrew Holloway, head of yechnology Grant Thornton.

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