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'The best place on this island to make a game at the moment is Belfast'

Why Ireland is lagging behind in the $80 billion global games industry.

Toaiseach Enda Kenny and Tainaste Joan Burton
Toaiseach Enda Kenny and Tainaste Joan Burton
Image: Sam Boal/Photocall Ireland

FOUR YEARS AFTER the government unveiled plans to make Ireland a hub for the $80 billion games industry, the most-attractive place on the island for developers remains north of the border.

And there is little sign tax breaks given to local film and TV production firms will be extended to give games studios a boost despite years passing since the option was first flagged.

Games Ireland co-founder Barry O’Neill said there was no lack of talent or ambition in the Republic but the country was missing the powerful clustering effect of a thriving games sector.

“We’ve had some good games startups here, we are disadvantaged in that our tax environment isn’t great for games production,” he told TheJournal.ie.

The best place on this island to make a game at the moment is Belfast and there are great talent pools emerging there – I think it is a threat to the games industry here.”

2015-05-08 15.58.36 Games Ireland co-founder Barry O'Neill

While Ireland offers a 25% research-and-development tax credit for qualifying work across all industries, the UK last year introduced a much more wide-reaching 25% credit to cover game development costs. France has also put in place a similar scheme.

O’Neill, who sold Upstart Games for €11.5 million in 2006 and now runs Dublin-based StoryToys, said the incentive was “hugely attractive” in providing an extra cash injection for games companies.

He said Ireland hadn’t been able to generate the same “positive spiral” effect of bigger games developers spawning startups that had happened in other countries.

Now that the UK has their games tax break, there is a legislative framework for it that Ireland could avail of – so we’re continuing to campaign for that – it’s just slow and that’s unfortunate,” he said.

Birmingham Airport - Codemasters Source: Elliott Brown via Flickr

Silicon Spa

In the Warwickshire town of Leamington Spa, also know as Silicon Spa, over 1,000 people work in the industry thanks to the earlier establishment nearby of Codemasters, the company behind Colin McRae Rally and other major titles.

Meanwhile, analysts have put the size of the global games market at over $81 billion, which was forecast to rise to nearly $103 billion in 2017. By that stage, its revenue is expected to be roughly on par with that of the film industry.

Games market Source: Newzoo

In 2012, Finance Minister Michael Noonan said he would look at extending tax reliefs in place for the film industry to the games sector. That year the government also assembled a taskforce with the target of an extra 2,500 games jobs by the end of 2014.

It followed a 2011 Forfás report which set the goal of Ireland being recognised internationally as a “global games hub for the 21st Century”, with plans to create an “international cluster” of games developers.

Part of that plan was to look at financial incentives to boost the “attractiveness for investment and indigenous growth in games development”, in line with measures used in countries like the US, Canada and Australia.

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But while the country has been successful in drawing some big industry players, like Activision Blizzard with its long-standing studios in Dublin and Cork, most have simply used Ireland as a location for European call centres.

Games E3 Activision Blizzard Source: AP Photo/Jae C. Hong

More work needed

Dublin’s Digit Games and StoryToys, with 25 staff, remain the two biggest local games producers in a domestic industry which is yet to spawn a developer of major scale.

A spokesman for the Department of Jobs, Enterprise and Innovation said a proposal for a refundable corporation tax credit for the games sector, similar to those used in the UK and France, was put to finance officials last year.

Further work will be undertaken in 2015 to strengthen any proposal around the most suitable financial instrument to support this sector,” he said.

However any decision on tax rests with Finance Minister Michael Noonan. A spokeswoman for the Finance Department said there already a number of tax incentives in place for startups and entrepreneurs, and any new proposals for the games sector would be looked at as part of the budget process.

First published 8.30am

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About the author:

Peter Bodkin  / Editor, Fora

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