Now the coalition government has abandoned the original proposals for video game tax relief, both Sony and Activision Blizzard have warned that they're reconsidering further investment in the UK.
Speaking to The Financial Times (opens in new tab), Activision Blizzard's CEO Robert Kotick said, "For us to continue to invest in the UK there needs to be an incentive provided for us to do so." He explained, "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."
According to Kotick, Eastern European countries are now looking like much more appealing places for investment, as well as Singapore and Canada. In Canada, games companies can reportedly receive up to 40 per cent tax relief on wages.
Kotick's statement comes just two days after Activision Blizzard became a member (opens in new tab) of UK gaming trade association TIGA, which is pushing hard to get video games tax relief reinstated.
On Monday, Activision Blizzard's executive vice president and chief of public policy George Rose warned, "If games tax relief is not introduced, the UK will remain at a real disadvantage in comparison to other territories as a location for inward investment. Without games tax relief the UK games industry will not fulfil its potential."
Meanwhile, Sony Computer Entertainment's UK managing director Ray Maguire promised the Financial Times that Sony would continue its current level of investment in the UK, but warned that "any further new developments would have to be looked at." According to Maguire, some plans that were originally intended for the UK on the basis of video tax games relief might now "go abroad."
On Monday, TIGA's CEO Richard Wilson told THINQ (opens in new tab) he was confident video games tax relief would be reintroduced by the coalition government. "Ultimately I'm convinced that we will win this argument," he told us. "It will just take longer than we originally hoped."
Without video games tax relief, UK games developers have increased costs compared with other countries, making it increasingly difficult to compete internationally. For more information on how this could affect you, as well as the industry, it's worth reading this opinion piece on NowGamer (opens in new tab).