Yep, 2 of the biggest companies are teaming together against the lack of tax incentives in the UK

Activision CEO Bobby Kotick has warned that the company will cease to invest in the UK should the government fail to provide incentives or tax relief to the games industry.

The company, which owns UK studios Bizarre Creations and FreeStyleGames, recently joined TIGA with Kotick telling the Financial Times that something needs to be done.

“For us to continue to invest in the UK there needs to be an incentive provided for us to do so,” he said. “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.”

Sony UK head Ray Maguire is of the same thought, telling the paper the firm would continue with existing projects in the UK, but future projects “would have to be looked at”, adding that upcoming projects planned for the UK could possibly “go abroad”.

Six of Sony’s 15 studios are located in the UK, including Evolution Studios, Media Molecule, and SCE London to name a few.

Last week, it was announced that Chancellor George Osborne had canceled UK videogame tax relief and incentives, despite pre-election pledges made by the Conservatives, Liberal Democrats, the Labour Party and the Scottish National Party in support for games tax relief.

It was also rumored that a global publisher with incentives outside the UK sector had thrown a wrench in the incentive, but TIGA CEO Dr Richard Wilson laid the blame squarely at the feet of the UK Treasury.

http://www.vg247.com/2010/06/29/activision-and-sony-to-re-think-uk-industry-support/

Well I can see some developers moving to ... I dunno Canada

What is this tax relief, and tax incentives that they're talking about?

Sorry for the noob question.

Basically TIGA (UK's trade association for the video game industry) promoted a Tax relief for Uk based videogame companies. The change will allow companies to keep more profits from successful products and receive tax credits to reduce losses when their games don't perform well, but Chancellor George Osbourne said NO.

Oh so that means that Microsoft, EA, Ubisoft etc can snatch up that talent because they are going to continue to invest in the U.K. games development market?

So, here we go, corporatism at its finest:

* The industry is cutting headcount left and right.  And now, it wants companies to slash tax rates so that they increase profits, or they threaten to go elsewhere.  The idea is to get companies to go into bidding wars to slash taxes.  Nevermind that an area provides other benefits, just keep demanding less taxes. 

Do other industries receive this sort of tax break? If so, which ones? If not, what makes the video game industry think it's so special?

I understand that all companies and all people (well, most) are having a hard time with this recession, and honestly, I think it's extremely selfish of the video game companies to think they should somehow get off easy.

That being said, I'll admit that I'm not the most knowledgeable on this topic. If someone has some light to shed on me I'm more than happy to hear it.

Edited and fixed.

We just had a Budget by the incoming Conservative-Liberal Democrat coalition government that cut a lot of things, including all government departments by 25%, increased income tax by 1p in the pound and sales tax (VAT) to 20%, and cut back a lot of the previous government's programmes. The tax break on video game development was one thing that was scrapped. All because our budget deficit and national debt are extremely high.

Why should the game industry be subsidised when it can't make a profit? Not like the UK produces many good games any more anyway (well OK LBP), so little danger of losing talent to abroad.

Bottom line: We can't afford it!

The games industry shouldn't be getting any tax breaks that the rest of us don't get.

I hope Nintendo is the anonymous 'big publisher' that is supposed to have persuaded the Gov. to cancel the tax breaks.

It's not about making a profit though, sure there are some companies that don't but then the industry is hard but gaming is by far our most successful (both sales and export) entertainment industry in the UK. It makes far more money then music or film.

If someone doesn't keep it going, like say the government, it will end up like the film industry for sure, our so very wealth film industry.