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Irish target Scotland's computer games industry

The Irish government is targeting Scotland’s world-beating computer games industry in a bold bid to revive the Celtic Tiger through further aggressive corporate tax breaks.

The Sunday Herald can reveal that the leading Scottish firm in Dublin’s sights would consider relocating from Dundee if the Irish come calling, and that the Scottish government is taking the threat seriously.

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Colin Macdonald, studio manager of Realtime Worlds, the Dundee venture which employs 300 people and which has created globally renowned games such as Lemmings and Grand Theft Auto, said that the Irish overtures were enticing. “If the package on offer in Ireland was attractive we’d have to give it serious consideration,” he said. “Dundee is a great place to be based, one of the main hubs for ­computer games in Britain, but at the end of the day we’ve got to look after our bottom line.”

Ireland’s government has been explicitly urged to target the Tayside industry by Sir Gerry Robinson, the Donegal-born motorway service station supremo and TV troubleshooter, who was knighted for his services to business and the arts in Britain. Robinson is now working with other leading members of the Irish diaspora on emergency measures to revive Ireland’s stricken economy.

Speaking at a Global Irish Economic Forum convened in Dublin last weekend, Robinson urged the Irish authorities to target the Scottish computer games sector by offering them a five-year tax holiday.

Clustered around Dundee with smaller studios dotted across the country, the sector already accounts for 700 jobs and £50 million annual turnover. It has world-ranking capability and industry insiders say it has the potential to grow 10 times larger as new digital distribution platforms open up a bonanza for content creators.

The Scottish government ­recognises the games industry’s strategic importance, and the current SNP administration will seize on this explicit threat from the Irish to bolster its case for Scotland having the same economic powers as the Republic. Mike Russell, the constitution minister who is spearheading the push to hold an independence referendum next year, is also tasked as culture minister with seeking to develop the creative industries, of which games are a key element.

A spokesman for the Scottish government said: “There is a range of support available for the games industry in Scotland. Of course, our view is that Scotland should have control of key fiscal levers in order to do more. This is a clear example of the need for radical change which at least provides full fiscal autonomy for Scotland.”

He added: “Until we have those powers we’ll continue to make the UK government aware of the implications for the Scottish gaming industry. We’ll also work with the industry to provide evidence of the impact.”

Canada has already muscled in on the games sector in recent years through an aggressive tax credit scheme which has resulted in it becoming the third-biggest player in this field after the US and Japan. “After giving it consideration we didn’t relocate to Canada, but we lost some of our key staff to that country,” said Realtime’s Macdonald.

“Ireland is a lot closer to home than Canada, so Scottish policy-makers should regard it as a potentially ­serious threat. They need to make sure a level playing field here or they will lose some of us and lose out on a potential boom.” He admitted it would be “heart-wrenching” if Scottish companies were lured away because some of them could be “just about to hit the big time”.

Until now, the 15 or so games firms based in Dundee have not been able to capitalise fully on the content they create because the distribution has been controlled by major ­multinationals. That situation is now changing dramatically as consumers increasingly download games on a variety of devices including mobile phones. This trend is expected to ensure that the already explosive growth in the computer games industry not only continues but intensifies. In a bid to reap these dividends, Realtime World is now concentrating on distributing by itself the games it creates online.

Macdonald has publicly endorsed the Scottish government’s efforts to develop and support the gaming industry, but he feels still more needs to be done to boost the competitiveness of companies like his. He says Scotland stands to benefit hugely if this happens. “This sector is growing at a pace outstripping most traditional industries and Scotland is ideally placed to punch above its weight in seizing the new opportunities with its world-leading capability, from the larger studios producing games which have grossed billions of dollars to the cumulative synergy of countless smaller outlets.”

Robinson specifically singled out this sector as a potential target for an Irish economic revival. He urged the finance department in Dublin to adopt a “totally pragmatic” approach to getting the economy back on track by offering even more than the 12.5% corporation tax already on the table.

“If we make it attractive for companies like that to set up here, then it will happen,” he said. “And the surest way to success is to offer those we are trying to attract in here from the games sector is to give them five-year tax holidays.”

Dublin plots grand theft of Scottish games industry

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