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Home » Featured, News

Activision and Sony send tax-incentive warning to the UK

Submitted by on Wednesday, 30 June 20105 Comments

The fallout from the emergency budget on June 22, which saw the Chancellor of the Exchequer scrap proposed tax breaks for the UK games industry, is still causing ripples within the industry. Bobby Kotick, chief executive of Activision Blizzard, and Ray Maguire, Sony Computer Entertainment’s UK managing director, are the latest to speak out, and they have warned that this decision could threaten future investment.

The games industry argues that without tax breaks, the UK will find itself losing its talent to other nations such as Canada, who offer lucrative incentives. Activision boss Kotick himself has come out and stated that his company will require incentives if it is to continue to develop in the UK.

“For us to continue to invest in the UK there needs to be an incentive provided for us to do so. The talent pool in the UK is among the best in the world for what we do. But we really need to see some more incentives. We are seeing great incentives in Canada, Singapore and eastern bloc countries.”

Kotick has never been shy when it comes to making bold threats. In June 2009, he made not too discreet threats to Sony that the company would stop supporting the PlayStation should they fail to bring about a price cut. Activision are still big developers for the PlayStation today, but Sony did bring the price down for the PlayStation. Sony would argue that the price cut was always planned, but Activision’s influence was very noticeable.

Kotick must believe that he can have a similar influence on the Con-Lib coalition government, by threatening to either shrink or close its studios in Liverpool and Leamington Spa, which have over 700 skilled employees

Sony also has a big presence in the UK games development sector with several major studios: SCE London Studio, Media Molecule, SCE Liverpool, SCE Cambridge, Evolution and BigBig. Altogether they employ over a 1000 skilled employees. But with the scrapping of the tax incentives Sony will be investing less and they may even move some plans abroad, according Ray Maguire, Sony’s UK managing director.

“The existing plans will continue but any further new developments would have to be looked at, maybe something that was planned for the UK would go abroad now.”

For the sake of the UK games industry let’s hope that this is a bluff, otherwise in the future people will look back to this point in time as the moment when the games industry started to fall well behind the rest of the world. What a shame that would be.

[source: Financial Times]