UKIE and TIGA outline their Brexit positions

The UK’s two big video games trade bodies have reacted to Britain’s shock decision to leave the EU.

UKIE’s statement

The UK has voted to leave the European Union after an historic EU Referendum on Thursday. Leave won by 52% to 48% for the Remain campaign, with an overall voting turnout of 71.8% – the highest turnout at a UK election since 1992.

The vote signals the start of many changes to the UK political landscape – starting with the resignation of David Cameron as PM this morning, who says he will step down by October.

The government will now have to devote considerable resources over the next two years renegotiating treaties, re-making and codifying laws. This timescale could be even longer given that this has never happened before.
Immediate worries about impact on the markets have drawn a response from the Governor of the Bank of England, who outlined contingency measures.

Issues that will be particularly pertinent to the UK games industry in the coming months, and that Ukie will be working hard to fully represent our sector on, include securing access to overseas talent, ensuring we have the right investment in skilling up our homegrown talent, the continuation of the Video Games Tax Relief, and access to funding.

We will also continue to lobby on the wider recommendations we made in our Blueprint for Growth report around talent, the businsess environment, funding routes, local cluster growth, and innovation.

"Ukie is committed to ensuring the UK is the best place in the world to make and sell games and although this decision and the political uncertainty it brings will have an impact on our businesses it is important to remember that we are already a globally successful sector and a leading exporter in the digital economy," CEO Jo Twist said.

"Ukie will continue to work hard with colleagues in government and other sectors to ensure we continue to have the best possible business environment for our sector, and we will be following developments closely and advising members as they unfold."

We published a paper in April, ‘Staying Connected’, and conducted a roundtable with Osborne Clarke LLP examining legal implications of Brexit. We will continue to advise members to put them in the best possible position over the coming months.

TIGA’s statement

TIGA, the network for video games developers and digital publishers and the trade association representing the video games industry, said today that in the light of the vote for ‘Brexit’ the UK Government and Parliament should take steps to ensure the continued success of sectors with economic potential, including the creative industries and the video games industry. TIGA made the comments following the EU referendum which took place on June 23rd 2016 and drawing upon expert information from Weightmans LLP and Grant Thornton LLP.

TIGA said that there were three key issues facing the video games industry following the EU referendum.

1. Access to finance: Difficulty accessing capital has consistently been the top factor holding back many games developers. In an uncertain economic environment, there may be a reduced appetite for investment. Additionally, outside of the EU, the UK games industry will not be able to access schemes such as Creative Europe and Horizon 2020 programmes. The UK Government should promote policies that encourage investment, maintain sector specific schemes such as the Video Games Prototype Fund and consider a Games Investment Fund to help start-ups and small businesses.

2. A favourable tax environment: Video Games Tax Relief and R & D Tax Relief have been crucial in enabling the UK video games industry to compete on a more level playing field against the UK’s international competitors, particularly Canada. In a post Brexit world it will be even more vital to maintain, improve and enhance these reliefs in order to attract external investment and to maintain the competitiveness of the sector.

3. Access to talent: the UK video games industry relies on a highly skilled workforce to compete. Until now, the industry has had access to a substantial pool of skilled EU workers who can work in the UK without serious administrative restrictions. Brexit is likely to result in new immigration rules requiring employers to secure some sort of visa and to meet certain skills/salary criteria in order to employ migrant workers. It is vital that any new arrangements are not onerous or complex and that industry is not heldback by skills shortages.

4. Intellectual Property: IP is the lifeblood of the video games industry and the impact of ‘Brexit’ here could be significant. There are many commercial considerations. For example, the UK is part of both the Registered Community Design regime and the EU Trade Mark regime and also recognises the Unregistered EU Design Right. Such rights provide protection to rights holders across the EU Member States. Potentially such EU related rights might lose their validity in the UK. The implication being that those parties who originally held such EU rights may need to apply for UK trade mark and design rights to protect their rights in the UK. This may result in issues relating to existing development and publishing arrangements, IP licenses and security over IP rights.

The UK video games industry is a high technology sector that provides high skilled employment for over 30,000 people, including approximately 11,000 development staff and which contributes 1.1 billion to UK GDP," TIGA CEORichard Wilson said.

"It is also export oriented, with at least 95 per cent of studios exporting. Following the referendum in favour of ‘Brexit’, it will be more vital than ever to strengthen (and avoid harming) those sectors where the UK has a comparative competitive advantage: for example, aerospace, defence, high-value manufacturing and engineering, high technology industries, higher education, low carbon technology and the creative industries, including the video games sector.

For the video games industry, it is particularly important that policy makers ensure games companies have access to sufficient finance, benefit from Video Games Tax Relief and R&D Tax Relief, have clear and stable IP rights and can access highly skilled people from outside of the UK. Any new points based migration system must not be onerous or complicated, otherwise the industry’s growth could be held back.”

TIGA chairman and Rebellion creative director Jason Kingsley added:

The UK video games development sector is an export focused industry that sells content all over the globe. We have a highly skilled workforce, a creative and growing studio population and a heritage of thirty years of success. While uncertainty is unwelcome for business, the UK video games industry will remain strong, resilient and competitive.”