By Marcus Leach

TIGA, the trade association representing the UK games industry, has proposed that the Scottish Government should examine the establishment of a Creative Content Fund (CCF) to encourage new studio formation, stimulate the generation of new IP and co-fund new content development.

TIGA made the proposal in the face of the UK Coalition’s Government on-going failure to introduce Games Tax Relief, a sector specific tax break for games development.

In 2010, the UK Coalition Government reneged on pre-election promises and failed to introduce a tax break for games production — leaving developers in Scotland and throughout the UK at a disadvantage to their international competitors, many of whom benefit from tax breaks, which effectively reduces the cost of employment and games production.

58 per cent of Scottish game developers in a TIGA survey said that a lack of finance was holding back their businesses. The UK Coalition Government failed to introduce Games Tax Relief, with the result that investment and jobs are going overseas to countries such as Canada which have tax relief. Although the Scottish Government supports Games Tax Relief, it does not yet have the power to introduce such a relief. TIGA has therefore proposed that the Scottish Government could consider the establishment of a Creative Content Fund to provide match funding to Scottish game developers on a commercial basis.

"The Westminster Coalition Government is failing to invest in the Scottish and UK game development sector. The Scottish Government now has the chance to show decisive leadership in support of the video games industry by adopting TIGA’s proposal for a Creative Content Fund," Dr Richard Wilson, TIGA CEO, said.

"TIGA’s proposed CCF would improve developers’ access to finance, stimulate original IP generation and promote studio growth. It would enhance the independence of developers and strengthen the prospects for the expansion of the Scottish video games industry.”

Key features of the CCF:

- The CCF could provide funding of up to £100,000 to game developers. The CCF should make investment available in the form of matched funding (i.e. pound for pound) repayable contribution in approved game production projects.

- The CCF would operate on a commercial basis and so would be entitled to recoup the money from recipients out of successful sales of those games once they had generated a certain amount of revenue and over an agreed time period, together with a defined share of the additional profits. These profits could then be used to augment the CCF and applied to future projects.

- The CCF would be entitled to invest in a broad range of game development projects in order to cover both the breath of interactive entertainment content, as well as the wide range of platforms on which such content is distributed.

-The CCF should only invest in projects where the developer owns the IP.

- The CCF should additionally aim to invest in games that are innovative in terms of content, gameplay and business models.

The proposal is supported by a range of Scottish game development studios and universities.

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