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Activision warns it might quit UK over tax 'mistake'

by Sarah Griffiths on 4 January 2011, 09:53

Tags: Activision Blizzard (NASDAQ:ATVI)

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Game over?

Video game publishing giant Activision Blizzard has warned it might move its business out of Britain because of the government's ‘terrible mistake' in deciding to scrap tax relief for the games industry.

The US firm currently employs 600 developers in its British office based in Slough, has not ruled out moving its operations to another country with a more favourable tax environment, according to The Daily Telegraph.

Activision's chief exec, Bobby Kotick, told the newspaper: "I think it was a terrible mistake. There are so many other places that are encouraging the video games industry."

In his June Emergency Budget, Chancellor George Osborne took the decision to scrap proposals for tax relief suggested by Alistair Darling, dubbing them ‘poorly targeted' despite both the Conservatives and Liberal Democrats' pre-election enthusiasm and vows to back the tax relief.

Kotick's warning comes just one week after one of Activision's flagship games, Call of Duty: Black Ops, passed the $1bn sales barrier to be crowned the best-selling game of 2010.

He reportedly said that while the UK is chock full of talented developers, the tax relief is needed as other countries like China and Singapore plus selective US states are using tax incentives to lure big games publishers to their shores.

While few can argue that the UK does not need to cut its budget deficit somehow, the UK's gaming industry body TIGA has reportedly warned that Britain risks an exodus of clever game developers to other countries as a result of the tax situation.

The body has reportedly called for the reintroduction of tax relief and believes such a move would secure some 3,500 graduate jobs plus investment to bank-roll students studying maths and science.

Richard Wilson, chief exec of TIGA, told the newspaper: "For too long, the Coalition government has acted like a one-club golfer. It has had a strategy for reducing the deficit but little to say about growth. The video game sector offers opportunities for growth and high value, high technology job creation for the UK."

TIGA reportedly added that the UK games industry has fallen by 9 percent in the past two years with investment plunging from £458m to £417m.



HEXUS Forums :: 16 Comments

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Cutting the tax reliefs isnt a great idea but it shows just how greedy Activision are that they are willing to pull out just because they have to pay a little bit more up front.

To me they have become worse than EA ever where to the point where EA even seems likeable as a company now.
kopite
Cutting the tax reliefs isnt a great idea but it shows just how greedy Activision are that they are willing to pull out just because they have to pay a little bit more up front.

To me they have become worse than EA ever where to the point where EA even seems likeable as a company now.

100% percent agree. Kotik is even more arrogant than Balmer now after his gutting of infinity ward.
What is the actual size of the cuts though? I agree that the government has to cut something, where does the line stop though? Is this ‘just’ hitting 3500 jobs? IT in general is getting cut in the UK so unfortunately this is no great suprise or even shocking number of jobs. The problem is thinking that companies have any sort of loyalty to anyone except shareholders, they don't & never will.
WTO should just ban tax relief on games development if the company doesn't need it. It's a tool of bribery that usually only creates something at another country's expense, leading to reduced tax returns all round in the end.
I agree that Activision are very greedy - don't forget they charge a fiver more than anyone else I can think of for a game which is basically a map pack to previous games. And it's one of the best selling games so it's not like they're desperate for the money.