Advertisement
This story is over 5 years old
VICE vs Video games

The Great British Video Games Tax War

'Culturally relevant' games qualify for tax breaks – but will they end up fleecing fans?

by Mike Diver
06 August 2014, 3:17pm

(Illustration by Mark Reihill)

Album sales in the UK are down – units shifted on CD have near enough halved since 2009's figure of 112,500,000 sold. At the box office, domestic punters would rather spend their money on nonsensical action flicks, like the latest Transformers and some movie about horse-riding apes, than back their country's favourite canine – Pudsey: The Movie made less than half a million in its opening week. On telly, it's all Provincial Pricks Partying Abroad in the schedules.

British culture might look like it's in the toilet, if all you had to look ahead to was more foreign imports in the Premier League and a second Inbetweeners film. But the games world is taking steps to guarantee that the things that make these isles great are a focal point of domestic development. Studios large and small across this land are now able to apply for 20 percent tax relief, through a government-run initiative operated via the BFI. Legislation for the scheme will be complete by the end of August, and studios have been able to apply for the relief on their current projects since April. What this means: the government is actually encouraging creatives in the games sector to press ahead with their visions, and is willing to help realise them.

In theory, this is brilliant. And for a lot of developers, it's easy enough in practice. Company A raises so much capital for their game, and can offset some of that cost against a saving made later down the line through the 20 percent tax break. Said UK Interactive Entertainment (UKIE) CEO Dr Jo Twist at Brighton's Develop conference in July 2014: this is "free money, essentially. HMRC wants to give you this money, and it's open to anyone."

There are restrictions: your game can't be a real-money gambling app, and nor can it be (ostensibly or otherwise) advertising a product. The game must be made with the intentions of being released into the public domain – if it doesn't make it that far, that's fine, as teams can still apply for the relief so long as the plan was to get it into stores, onto Steam or whatever. So your game goes tits up three weeks before deadline? No worries, you can still scrape some of those costs back, you lucky failures, you.

Oh, there is one other catch – but it's not really one that many studios will have to worry about. Your game has to be mostly British. And this is measured through a 31-point test that studios must score 16 or more on to pass. Is your game set in the UK, or at least somewhere that's vaguely suggestive of somewhere in it? Score up to four points. Is the game displaying any seam of British culture, either in its development team or right up there on the screen? What's that, Morris dancers squaring up to some 1960s rockers wearing winkle pickers against the backdrop of a CGI-animated Angel Of The North? Here, have four more. And so on. Truthfully, it's pretty hard to actually fail the cultural test. Tomb Raider would have walked it back in 1996 – a new game in the series, Rise Of The Tomb Raider, is in development now – as would the Scottish-built original Grand Theft Auto of 1997.

"Rise of the Tomb Raider" Trailer

So easy is it, indeed, that distinctly abstract games can easily accumulate points enough to qualify for the tax relief. At Develop, Twist tells those assembled that even Terry Cavanagh's twitch-puzzler Super Hexagon qualifies – or would have, if it wasn't released back in 2012. So too does Thomas Was Alone, a game set within a computer mainframe where characters take the forms of simple, coloured shapes. The latter's developer, Mike Bithell, is now working on Volume, a stealth title that draws its narrative inspiration from the Robin Hood legend.

"The conversation about 'Britishness' certainly played on my mind during Volume's early stages," Bithell tells me, "so there is almost certainly some influence there. However, the tax relief stipulations are loose and generous enough that it's unnecessary. As poetic as the idea of making a Robin Hood game to lower taxes is, the reality is far less exciting, I'm afraid."

The announcement trailer for "Volume"

Bithell's connecting of the Robin Hood themes – you play as Robert Locksley, partaking in a series of heists where the objective is to avoid the patrolling guards by any means possible – to what's obviously a very futuristic aesthetic came about pretty organically. Says the developer: "I knew it was about a thief, so I did my research and yeah, Robin Hood keeps popping up. Initially I planned to use some of those archetypal parts to create a new character, but I realised that a straight-up adaptation would be more interesting. I had a lot of fun taking my own shot at the legend.

"The thing that lots of folk miss is that Hood has always been adapted and changed to suit modern tastes, jumping time periods and motivations at every opportunity. The idea of the 'real' Robin Hood, a medieval character, is less than a couple of centuries old. Updating him to the near future, having him confront his old problems in a new setting, it makes it feel fresh. I hope."

Originally set for a 2014 release, Volume is likely to slip back to 2015, but will be on show at this year's Eurogamer Expo, at London's Earls Court in September. It's a game funded privately, and of course Bithell is right to make the most of the tax relief he's eligible for. So too are London-based studio Roll7 for their forthcoming 8-bit-styled shooter Not A Hero, and Lunar Software, whose Routine looks like being a pants-pissingly frightening first-person horror.

Alpha gameplay trailer for "Routine"

There's a great big problem with this seemingly simple process of saving some serious money on your games making, though. Crowd funding has become a major source of start-up income for developers looking to get their new game off the ground. Recent examples of success in the field include Double Fine's Broken Age, which raised over $3m from 87,000 backers; and Guitar Hero developer Harmonix, whose Kickstarter campaign for a reboot of their 2003 rhythm action game Amplitude achieved its $775,000 target and some. What happens when a fan-funded game qualifies for the UK tax relief? There's an ethical question to be addressed – surely, those who have chipped in to get the game made should see some sort of payback?

Godus is a new, crowd-funded game being developed by 22cans, a British studio established by Populous, Fable and Dungeon Keeper designer Peter Molyneux. Like Populous, Godus is a "god game" – the player controlling an in-game society on a grand scale, building and destroying land and influencing proceedings as if a heavens-residing onlooker. The game's already attracted a little controversy on account of it even being a Kickstarter project in the first place – the thinking being, perhaps rightly, that Molyneux is successful enough to not need the public's money for development costs.

In his 2012 article titled "Are the rich old men ruining Kickstarter?", Eurogamer's Tom Bramwell writes: "I'm looking at Kickstarter through the prism of Molyneux (...and others...) rattling their golden cups in my direction... And this is just wrong. ...This is absolutely not what Kickstarter is about." Basically: Why is this rich man stealing attention, press inches and essential funding from the poor, from those other projects that need the money? Of course, Molyneux has invested a lot of his private resources in setting up 22cans, allowing his work to be truly independent after years spent under the eyes of Microsoft as leader of one of its subsidiary studios, Lionhead. But Bramwell's argument is nevertheless with merit.

Prototype trailer for "Godus"

22cans designer Jack Attridge was at Develop, filling in for Molyneux himself, his boss stateside to oversee some vital element of Godus's on-going creative process. Attridge filled us in on where Godus was at, how the studio was going about games in a whole new way – it was 22cans behind the tap-happy experiment Curiosity – What's Inside The Cube? – and was genuinely made up at the Kickstarter response they got: Godus met its £450,000 target.

Curious to know if 22cans would pursue the new tax relief opportunity open to them – Godus is easily eligible – I contacted Attridge immediately after Develop. I also got onto UKIE to see if there was an official line on the crowd funding versus tax relief equation, as Twist told me in person that she couldn't say for sure. UKIE never answered my questions, passing me between addresses a few times – should "their policy man" eventually get back to me, I'll add his perspective in the comments below. 22cans did get back to me, but it wasn't Attridge answering. Instead, the company's PA and office admin manager sent me something pretty unhelpful:

"We are aware of the new tax relief introduced for British developers and would have been happy to have a chat about it but unfortunately the studio is very busy focusing on the release of Godus. Should you still require some input a little later in the year, please do not hesitate to contact us."

Pushed for something more, something as simple as a yes or no to the studio applying for the relief, I did get somewhere:

"I know our CFO is looking into it," wrote the very same PA; "We haven't applied as yet, but I am sure we probably will."

There's no news yet on the 22cans website regarding any repayment of Kickstarter funds to Godus backers, representing the savings they stand to make in applying for the tax relief. Comments on the game's Kickstarter page are growing in negativity, but the sentiments are mostly based on disappointment with the game so far rather than anyone asking for their money back – at least in light of the tax issue, instead of simply because they feel the not-quite-end product's a gigantic piece of crap.

One poster, named Andy Hassan, writes: "You guys have taken a grand idea and completely and utterly DESTROYED it. I don't want my money back or anything. I just wish that the team working on this had two clues about what they're doing." Another, posting as Zoran Cavic, says: "Oh, why didn't I just go to an ATM, take the money out and wipe my own ass with it. [It] would have been better than this."

Ouch. But we're getting off point, slightly – the point being that British games makers have a great opportunity now to not only save on development costs, but enrich gaming with fresh references to Britain's incredible cultural history. Geordie Shore: The Game can fuck right off before it's started, but Bithell's in no doubt that there's ample inspiration out there for new and exciting games tapping into the UK's myriad myths and legends.

"We've a rich and diverse history of legends and mythology," he says, "and I'm sure we'll see each [hardware] generation have a crack at them. I'm interested in the movement of popular fiction into the public domain, so what will [developers] start to do with Sherlock Holmes, Treasure Island, or War Of The Worlds? It feels like there's a whole era of stories moving into the 'legend category'. I'm intrigued to see what happens."

As am I when it comes to crowd-funded games and their tax relief applications. It's one thing to feel ripped off by a product on account of it failing to reach expectations, but quite another to pay good money to meet a target that, accounting for the saving, was actually rather less than the stated sum.

A full breakdown of the BFI tax relief test is available here.

@MikeDiver

More from VICE:

This Is What It Feels Like to Take DMT

We Let Yousef Munnayer Answer the Questions Sean Hannity Wouldn't

The Swansea Uni Student Who Just Became an Accidental Porn Star

Tagged:
Gaming
Video Games
tax
Computers
Mike Diver
UKIE