38 Studios Lobbies For Videogame Tax Breaks

[Greg Tito]

38 Studios Lobbies For Videogame Tax Breaks

Curt Schilling is a household name in Massachusetts, but he's considering moving his game company to another state if they don't offer tax credits.

Ever wonder why so many movies and TV are made in places like New York City and Hollywood? Because those cities foster the industry by offering tax credits and other incentives to productions that utilize local companies. Other states have been jumping on the bandwagon by offering similar compensation to movie productions in recent years, including Massachusetts, but Curt Schilling thinks the state should extend the benefit to videogame companies. If they don't, he may move his videogame company 38 Studios to another state like Rhode Island. 38 Studios is working on an MMOG penned by R.A. Salvatore and recently acquired Big Huge Games to work on an RPG set in the same world.

Schilling thinks his company would be great for any state's economy. "We have all the things any state in the country would want right now," Schilling said. "We're hearing from states that don't have programs talking about putting programs in place for us."

As MMOG development ramps up, 38 Studios is going to be hiring a lot of staff. "They're very high paying jobs, around $85,000 a year, they're permanent jobs and the industry is growing," he said.

Tax breaks for game companies have been a huge topic of discussion in the United Kingdom for years. With the success of Montreal's program [http://www.escapistmagazine.com/news/view/78440-U-K-Considers-WTO-Challenge-Over-Canadian-Development-Studios], one wonders why municipalities wouldn't want to foster such a relationship. Production companies create jobs, which is what is needed in today's economic landscape.

Schilling points to a similar case in the film world in his home state of Massachusetts, when Scorcese's recent Shutter Island was filmed in Medfield in 2008. "I'm looking at two or three companies in Medfield that literally would be out of business if that film had not been shot," Schilling said.

Such a program for videogame companies would be even more amplified because their staff would not leave after filming was completed.

"It's like the film tax credit on steriods," Schilling said.

Wait, that may have been a poor choice of words, Mr. Ex-Baseball player.

Source: Boston.com [http://www.boston.com/business/ticker/2010/03/schillings_38_s_1.html]

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[GloatingSwine]

Games companies are among the beneficiaries of tax cuts to the tune of £460 million announced in the UK budget today.

 

[More Fun To Compute]

I think that traditionally games companies formed in places like Austin and parts of Massachusetts due to a large pool of smart people being there already. It's sort of a shame that people established there have to decide to grit their teeth and get on with it or emigrate to another country that has tax credits but there you go.

It will be interesting to see if Eidos Montreal can recreate a classic Austin/MIT school game type when they make Deus Ex 3. Maybe they will just make another Montreal type of game.

 

[Fr331anc3r]

If the game companies got tax credits/breaks it could very easily translate to the end user via reduced cost in the games themselves, which would be a win-win all around. No tax credits for Activision, they like money too much.

 

[Alpha Centauri]

The only thing that sunk in my head was MMO penned by R.A. Salvatore. He is my fav author!

 

[Jared]

Games companies are among the beneficiaries of tax cuts to the tune of £460 million announced in the UK budget today.

I read that too. Which made me smile.

Because its not only one of the largest they have ever got here in the UK...but its a substantial rise from the years previous.

Realy showing its part of the driving economy now

 

[Danny Ocean]

Games companies are among the beneficiaries of tax cuts to the tune of £460 million announced in the UK budget today.

I read that too. Which made me smile.

Because its not only one of the largest they have ever got here in the UK...but its a substantial rise from the years previous.

Realy showing its part of the driving economy now

And here's more detail on that, for anyone interested. [http://www.direct.gov.uk/en/Nl1/Newsroom/Budget/Budget2010/DG_186637]

 

[gmer412]

Wait, Curt Schilling owns a game company? What? Also, I don't think video game companies create as much business as movie productions do. I dunno if the tax break is really deserved.

 

[Weaver]

Man, come to Ontario. The government gives out MAD tax breaks, like 30% now.

 

[Low Key]

Why don't we just give everyone friggin' tax breaks while we're at it? /sarcasm

I'm a conservative politically and think tax breaks are a good idea to a point, but not everyone who asks for one should get it. I mean, there is a reason why people and businesses have to pay taxes. They aren't there just to make your paycheck look smaller.

I equate it to sports team owners who threaten to move teams if they don't get taxpayer money to fund brand new stadiums that will bring in tons of money to no one other than the team owners and that's bullshit.

 

[case_orange]

I'd rather see a tax on video games than a tax on booze, music, or food.

 

[AceDiamond]

As a Massachusetts resident (and looking to get into the industry) I'm a bit confused. I could've sworn tax breaks were being given to video game companies in Mass. already in order to make it appealing for them to stay here. Perhaps it was only something on the drawing board.

 

[DaxStrife]

Can't say I expect this to happen: out of all the things we have costing the states and country money, why would we want to add video game companies to that debt?
And I always hated that "give us tax breaks or we move elsewhere" threat, especially from established sports teams.

 

[SimuLord]

Wait a minute...38 Studios bought Big Huge Games, makers of Rise of Nations?

 

[dibblywibbles]

If you think tax breaks will lower prices of games you're living in a fantasy world. they're running a business and the industry has set standards in prices that we're already willing to pay. tax breaks mean more money for the company to develop bigger and better games(we hope or we don't buy) I don't see that much of a problem with it considering they do bring a bunch of jobs and with those jobs income taxes. what I want to see is binding agreements that say if we give you this tax break you supply us with guaranteed jobs for x amount of years (or suffer the awesome wrath of back taxes!) based on how big the company is. Yes I know I like to dream too.

 

[Therumancer]

$85,000 a year to write video games as a permanant job. Hmmm, and people wonder why the cost of game development is skyrocketing. I wouldn't care except for the fact that the bill gets passed over to me the consumer. Oh and they want tax breaks too... lovely. (people wonder why I keep harping about stuff like this)

Focusing strictly on the idea of the tax break, I can see the arguement. Movies and TV shows can be considered artwork (Acting is performance art) and our goverment has always provided breaks to encourage people to produce art, with various degrees of abuse through the year. If video games can be considered art or a platform for art, then arguably they should receive similar levels of tax breaks. Viewed that way it's fair, but in terms of argueing "oh look at all the jobs we'll bring to the economy" well, the way that's expressed gives me a certain reflex of saying they should go pound sand somewhere. Largely because I think the reason why games are so expensive is that the costs of development go up, and seeing as the cost of development is primarly human labour more than materials or anything it means people are being paid increasingly large amounts of money for what they do, which in turn gets passed to us (the consumer). The very arguement about why they should get the tax break (high paying jobs) is why I don't think they should because to be honest I can almost guarantee the money saved by that tax break is not going to lower the prices or go into the product, but instead be pocketed as extra profit.

I'm tired, but the point of my rambling is that if someone was to make the case properly I might be able to accept it. But not like this guy is, and truthfully I think the way some of that was stated is going to poison my thoughts on "tax breaks for game studios" for a long time to come.

Truthfully though I could see tax breaks also being used as a key to industry reform. If the goverment was to offer decent deals to big game developers in producers in exchange for caps on the price of the end product, and guarantees of abiding more by American competitive practices, effectively putting an end to cartel behavior, price fixing, and other things. That's getting well out of context of this article however.

 

[Panayjon]

I'm no political science major, but I think we're just talking about things at a state level. They're not talking about some federal all-encompassing law. Its up to the voters of Massachusetts to decide if they want it or not.

I'm ignorant on the matter though, so feel free to let me know if it is otherwise. After all, I'm no whale biologist.

 

[WhiteTigerShiro]

Wasn't there also talk about someone trying to make either Philly or Pittsburgh into the "Hollywood for gaming studios"?