Barry Reid, from Gorilla Post Production, has carried out an excellent piece of research highlighting the potential of the Irish Games Industry, if it receives similar supports to other industry sectors benefiting from tax relief schemes such as Section 481.
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SUMMARY EXTRACT
Since the introduction of the Section 481 tax relief scheme in 1997, direct employment in the Irish Film and TV sector grew from 1,000 to 12,000 between 1997 and 2019. The industry now employs more than Google and Facebook combined. It is estimated that for every euro spent on Section 481 outlays, approximately €3.50 is generated as a net benefit to the economy.
While the TV and Film sectors have enjoyed a period of rapid growth since 2008, the gaming industry in Ireland has been lagging behind by comparison. A report by financial group, Olsberg SPI, in 2017 showed that live action films and television programmes earned €123.3 million in exports to foreign producers. In comparison, export earnings by games companies was just €3.3 million.
A major contributing factor to the relatively slow growth in the sector would point to the lack of Section 481 tax relief, which is vital to the Film and TV industry. Similar tax subsidies are available in other EU countries who support their gaming sectors and have hence experienced significant growth. In addition, many European countries have dedicated games funding to support their indigenous gaming companies, which Ireland does not.
“For the games industry, all project finance is presently private. Given the small scale of the industry such finance is difficult to come by, and is often raised by those working on a project, their friends, and their family.” (Olsberg SPI)
On a global scale, the gaming industry which is valued at $120bn, is now larger than the Film, TV and music industries combined ($65bn). Regrettably, however, it appears that Ireland is set to miss out on the global spoils from the gaming industry. Without adequate support from the government, and a general lack of public investment, the Irish gaming industry is unlikely to grow to the level of the TV and Film industry or compete with its EU neighbours. This represents a large oversight in recent years by successive Irish governments, especially since gaming is a high value export product and the boost to existing jobs in education, software engineering, animation, visual effects, recording, post production, financial and legal services, and hospitality would be substantial.
“While the Irish games sector is presently tiny, given the speed of overall growth in the global games market, there is major growth potential if the right circumstances are available in Ireland.” (Olsberg SPI)
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The full article (The End Game) is available to read here:http://reideconomics.ie/articles.php
Thanks to Barry for sharing this research with us.