Tax is Ireland’s ace in bid to win global games industry – Taoiseach

11 Oct 2011

Taoiseach Enda Kenny addressing a high-level meeting of some of the most powerful executives in the global gaming business

Addressing the CEOs and senior vice-presidents of video-game giants like Activison Blizzard, EA Games, Popcap Games, Nintendo, Microsoft and Sony, Ireland’s Taoiseach Enda Kenny said the Irish State intends to do everything it can to foster the games industry, tipped to be worth US$82.4bn by 2015.

Ireland is home to global operations of gaming giants like Activision Blizzard, which employs 1,200 people in Ireland, EA Games, which announced plans to double its workforce in Ireland with an extra 200 jobs at its Bioware facility in Galway, and countless others, such as Big Fish Games and PopCap Games, which is being acquired by EA for US$1.3bn.

It is also home to indigenous powerhouses like Havok, which is responsible for the physics engines found in the best-selling games, as well as DemonWare and Jolt.

A report just out by Forfás estimates that if Ireland plays its cards right, it could double its employment in core games activities to 4,500 people.

The report highlighted the continuing transition of the video-games business to online and mobile distribution channels resulting in US$82.4bn in revenues by 2015, up from US$55m last year.

‘Corporate tax is a cornerstone of economic policy’

The Taoiseach this morning addressed a high-level meeting organised by Game Ireland and attended by senior management from Activision Blizzard, Eidos, Electronic Arts, Konami, Microsoft, Nintendo, SCEE (Sony Computer Entertainment Europe), SEGA, Take 2, THQ, Ubisoft, The Walt Disney Company, Warner Bros Games, PopCap, Havok and Big Fish Games.

Kenny said that after three years of contraction, the Irish economy is returning to growth. Exports are performing strongly, with a 7pc increase recorded in the first quarter of the year, with a similar increase forecast for the year as a whole.

“Crucially, our balance of payments is now in surplus, proving the strength of our economic sustainability. Our competitiveness has improved significantly. Business costs have fallen across the economy and labour costs are expected to reduce further this year.”

Ireland faces competition from locations such as Canada, Scotland and France, and the key is to provide the right infrastructure and incentives to win both inward investment and encourage start-up activity by indigenous and overseas entrepreneurs.

Kenny told the games chiefs: “Our current corporate tax system is a cornerstone of our economic policy and will remain so.”

The Taoiseach praised the efforts of Paschal Donohoe, TD, who has worked to highlight the industry’s potential.

“Those who pleaded with their parents for a game for their Nintendo at Christmas are now in their 30s and are spending their own salaries on PlayStation 3s, smartphone games and online gaming. Even people of a slightly older generation, such as myself, don’t think twice about buying apps for smartphones or iPads.

“In short, this industry is on the way up and my Government is determined to ensure that Ireland becomes a recognised regional cluster for gaming companies that will attract more investment.

“We see the gaming sector as a key priority growth area for Ireland because it draws on many of our core strengths.

“Our goal is to become a hub for the games sector as we have for ICT, medical devices and pharmaceuticals.

“And we have already introduced a number of specific initiatives to achieve this.

“Our indigenous enterprise agency, Enterprise Ireland, is supporting start-ups in the sector through its Competitive Start Fund for early stage internet and games companies. The 10 successful companies received €50,000 and the support of a business mentor to guide them. A further 15 companies have been selected with another call due before the end of the year. EI also supports management development of companies in the internet/games industry through the iGap programme.

“And we are supporting cutting-edge research in the sector in a number of higher education institutions, including the Digital Enterprise Research Centre and System Dynamics Research Group in Galway and Game CORE in the Institute of Technology in Carlow.

“This week, we published a detailed Action Plan for the Sector, which aims to make Ireland a global games hub for the 21st century.

“This sets out a job target of 4,500 in core gaming companies by 2014, which will also likely result in a significant level of associated employment.

“The plan highlights opportunities in areas such as creative game development, advanced game servicing, enabling software and technology solutions, and IP exploitation and online publishing,” Kenny said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years