An arms race for games industry tax breaks
Consulting firm Nordicity is well-versed on the subject of tax credits for the games industry.
It has worked with trade groups around the world, helping them explain to legislators how tax breaks can help make their regions more competitive. It has also worked on the other side of the equation, helping governments that are either exploring the idea, or have already settled on tax breaks but need help with the logistics of implementing them.
It has also helped GamesIndustry.biz, with Nordicity co-CEO and managing partner Kristian Roberts recently sitting down to answer our questions about the state of play for gaming tax breaks around the world.
"I think the best way to describe it is that we've got regional arms races," Roberts says.
Recently these races are happening primarily in two places: Continental Europe, and Australia-New Zealand.
He points to New Zealand, which earlier this month saw its recently elected coalition government confirm that it would follow through on the previous government's Game Development Sector Rebate scheme that was introduced just last year.
"It exists because Australia did theirs," Roberts says of the 20% tax break program, noting that one country adopting tax breaks puts pressure on its neighbors to follow suit or risk seeing their studios move shop.
That lines up with comments New Zealand Game Developers Association's then-chairperson Chelsea Rapp made to us just after the country rolled out its tax breaks last year.
"We've been campaigning like mad for the last year to try to get this across the line because if we don't do it this year, it's going to be really challenging for studios to recover," Rapp said. "So many of our studios are saying, 'Well, if we don't get it this year, my only option is to set up a studio in Australia because the labour pool is bigger'."
As Roberts puts it, "There's an arms race for jurisdictions who want to secure the games industry looking around to their neighbors, seeing if their neighbors can offer more
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