NY Times Article: Rich Tax Breaks Bolster Makers of Video Games

[Win Laik Pya]

http://www.nytimes.com/2011/09/11/technology/rich-tax-breaks-bolster-video-game-makers.html?pagewanted=1&_r=1&hp

 

no tl;dr because you can read it your goddamn self.

 

New York Times posted a pretty interesting article on how tax breaks affect the video game industry in the US (and a wee bit about Canada, though hardly a blurb).

 

One thing i don't necessarily care for in the article is the extreme focus on EA. It's interesting and all, but i'd like to hear more about other big names in the industry (though perhaps EA is the one most closely tied to American business by far).

 

Here's the line that struck me the most:

 

“The research credit benefits the wrong companies and encourages the wrong kind of research,” said Mr. Rashkin, a tax expert and executive at Marvell Technology, a company based in Santa Clara, Calif. “By diverting funding and attention from where it could be most useful, the credit is hobbling American innovation.”

 

Thoughts?

[MasterDex]

I read this earlier. I'm not sure where I stand on it yet. I think tax breaks are important for an industry that can be so expensive to enter but I'm not sure how much help tax breaks are to us as gamers when they're just making the rich richer....that said, you take away the tax breaks now and we're going to get rammed up the ass without lube to make up for the hole in their giant, silk pockets.

 

PS. I think you posted this thread three times.

[deanb]

I read it yesterday, it did seem a tad odd. On one hand it's relatively in-depth, but as you noted it does seem fiercely focused on EA. It painted it's global studios as tax havens (not like they have a bunch in UK or anything), when it's just a fact of how studios work. Which of talk of UK since I've been following this a fair bit over the years this is wrong

While Britain and some nations in the European Union have been paring back their tax subsidies for game developers

Quite the opposite, we've not had tax breaks in place, but over the years there has been lobbying to have them put in place. Especially with Canada being extremely aggresive in wanting to become a haven for VG studios.

 

VG companies have tax breaks, we know this, but I do feel the piece was way too centred on EA to be of any worth or for me to have any feelings on it. MS has companies around the globe and most likely also uses the same software n R&D tax breaks that EA uses, but of course MS makes Windows which is for work, and ea make games for play. An easy soft target. Pretty much laid out in the second paragraph:

 

It also provides tax breaks for a company whose hit video game this year was the gory Dead Space 2, which challenges players to advance through an apocalyptic battlefield by killing space zombies.

 

I think tax breaks are a good idea, but the way they're implemented in the US is not. EA is a large company that's fairly able to fend for itself. However tax breaks should be there to encourage and aid growth of small studios. Which I know is where some of the aim is with lobbying for tax breaks in the UK. Sow the seeds, get them started up, then when they get bigger, more employees, tax em.

[TheFlyingGerbil]

I would say all developed nations need tax breaks to keep jobs from being farmed out to countries with cheaper costs. I do think that the complicated nature of them seems to be the problem - only large companies can afford the specialist lawyers and accountants needed to take advantage of them and they should be set up more to encourage new companies and small companies which may struggle more with ups and downs in revenues when they may only have a single game in development at any one time.

 

I wish we had some in the UK, we seem to have a genuine talent for making games here but studio after studio is closed, maybe if we had the breaks they would still be here.

[Yantelope]

The gaming industry is seen as a very desirable one to have in your state/country. It's a clean industry, it has higher education workers and brings in a good amount of revenue. It's much preferable for a state to be getting their tax income from a game company than from an oil refinery. This is part of why Texas has done a lot of courting game companies.