The biggest issue facing the UK games industry right now - and the country in general - is Brexit. Regardless of how the United Kingdom exits the European Union, there is going to be a massive impact on the games business.
The end of the free movement of people, for example, is likely to cause hiring issues for the UK. The development sector is somewhat dependant on foreign labour due to historic shortcomings in the country's education system.
George Osborn, from pro-European video games industry pressure group Games4EU, tells us more about the potential impact of Brexit and what UK games companies can do to prepare for this political shift.
PCGamesInsider.biz: What will the impact of the UK leaving the EU be on the games industry?
George Osborn: It’s hard to forecast the precise impact of Brexit on the video games industry at this moment in time.
For the most part, the reason for this is the volatility within the political environment. While it looks as if the Prime Minister has seen off a no-confidence motion - for now - we’re still not sure if the withdrawal agreement she has agreed will get through parliament at all or – at the very least – unamended.
However, the likely impact of Brexit on the UK video games industry will be a negative one. In comparison to many sectors, the video games business in this country is already a global one.
Reducing access to European markets and imposing artificial barriers for hiring from within the EU by ending freedom of movement will cost businesses, with increasing levels of red tape also likely to hit the sector.
What are the main challenges created by Brexit for the UK games industry?
In the Games4EU Brexit guide, our policy team – headed up by Jas Purewal – identified six major challenges for the sector in the case of a hard or no deal Brexit scenario.
The likely impact of Brexit on the UK video games industry will be a negative one.George Osborn
The first is increased uncertainty for businesses, which leads to elevated bureaucracy and costs – especially if a data adequacy deal was not secured. The second would be increased costs for products and services, with the possibilities of some services like Amazon Prime falling apart in a no deal scenario.
Additionally, individuals could see their rights curtailed or affected – ranging from loss of consumer rights to losing the ability to easily work in either territory.
And this could lead to cultural diminishment for the sector, discouraging international companies and talent from settling here and pushing affected businesses to relocate to the EU.
To give the government some credit, the withdrawal agreement and transition deal could – at least – provide some short-term security for businesses by giving them a period of grace while the country prepares to leave.
But with the future political declaration currently not setting a clear destination for the country and years of negotiation ahead, there’s a real risk that the appearance that the transition deal is a “safe harbour” could prove false.
Are there any advantages to the UK leaving the EU for the games industry? For example, the Video Game Tax Relief (VGTR) we have now was approved by the EU as State Aid - so theoretically we might be able to offer a more 'competitive' tax relief post-Brexit.
There could, theoretically, be some minor advantages to Brexit. VGTR could potentially be extended and the government’s rhetoric of “Global Britain” may allow the doors to be opened to more talent from around the world.
It’s reasonable to wonder whether the government’s immigration policy really does support the skilled workers it claims to.George Osborn
However, there are two compelling reasons why potential benefits such as these are unlikely to materialise.
First, in the case of VGTR, there would have to be enough political appetite and attention to expand it further.
If, as predicted by the Department for Exiting the European Union, that leaving the EU will hit GDP and the public finances, it’s reasonable to ask whether expanding finance for video game tax relief would be top of the list of priorities ahead of, say, delivering extra funding to the NHS.
This is even without considering whether a government, whose domestic agenda has practically been frozen since June 2016, would have the administrative head space to enact legislation when it is attempting to negotiate a free trade deal in under two years.
Second, and specifically in reference to talent, it is clear that the government’s global rhetoric doesn’t apply when it comes to hiring.
Although there are warm words for highly skilled workers, the government’s arbitrary pledge to reduce net migration to the “tens of thousands” combined with efforts to restrict Tier 2 visa’s to employees earning more than £30,000 suggests that there is a disconnect in its rhetoric.
And with UKIE's State of Play report in 2017 suggesting that the majority of EU workers currently operating in the industry are earning under that cap, it’s reasonable to wonder whether the government’s immigration policy really does support the skilled workers it claims to.
Our sister-site PCGamesInsider.biz has the full interview.
PocketGamer.biz's two-week UK Special is shining a spotlight on the country's vibrant games industry ahead of Pocket Gamer Connects London on January 21st to 22nd 2019 - the largest B2B mobile games event in Europe.