Welsh gov beats off Canada to hand £1m to Nintendo dev Game development firm OysterWorld is opening up a base in south Wales that will bring 60 jobs to the region in the next three years. Wales beat out Canada as the site for the development, marketing and research centre, which will be backed by £1m from the Welsh government. “Attracting a significant player like Oyster World, …
Well hopefully not the 'Not the Nine o'clock News' one that came to my mind :
http://www.youtube.com/watch?v=3BXXLW52xgQ
Mind you with R&D tax credit and the Creative Industry Tax credit presumably coming out for this one we'll be paying out a lot more than £1m over the years for this. (ie so that's a 225% relief on R&D expenditure - or cash to them in lieu if a SME and any profit that isn't offset is then reduced for tax purposes by the credit - wouldn't be terribly surprised if that added up to paying for a sector to invest in the UK that we will actually subsidise year on year)
Would be nice to see some assessment of the cost per job and average salary expected say ... just so we know how we are subsidizing companies with our taxes ...
It not like there are more fundamental industries that are subject to down stream in country economic leverage or more deserving uses of public funds is it?
"When the grant runs out they will move on"
Of course, Nintendo may soon be such an also ran in consoles that there won't be a market for the software devs, and they'll be turning the lights off before the grant runs out.
As a simple test of their business plan, they should have asked "can we get a grant?", and if the answer was "yes", then the logic is "No sustainable commercial opportunity exists in this market, go stack shelves in Tesco".
Yes - although so would a significant number of states and countries who presumably have people on the payroll who are supposed to know something about economics and markets.
a) so you want to ban companies from growing overseas - thus ensuring that no one starts a company in the UK if they can avoid it and driving investment offshore from the very beginning.
b) actually the tax payer probably didn't need to do much as Canada is waking up to the idea that tax subsidies for non economic multipliers like games (as opposed to infrastructure for example) is a bad idea. I think Nova Scotia is ending theirs and losing the jobs they've been funding as a result - distorting the market without a good long term plan for keeping the investment wasn't so clever. Just as its proving not to work the UK is copying the idea ... yay!
PS this list is atonishing: http://www.gamesindustry.biz/articles/2013-05-22-gaming-tax-credits-a-developers-guide-to-free-money
Nova scotia outflow http://www.develop-online.net/news/43775/Decline-in-tax-breaks-forcing-Canadian-devs-to-relocate
Can't really believe that the whole idea of not picking winners and having a competitive overall tax policy underpinning long term infrastructure and skills investment is really so hard to grasp ...
If those 60 staff are only employed for a year that works out at £16,666 spent per head. Now that's 60 people less to pay dole for (even if they were employed their leaving would likely open a position in their old job for a new employee), thats also 60 people paying tax. Not sure what the pay will be but most game developer jobs advertised seem to start at £18,000, so 60 people on wages of over £18,000 would generate considerable income for the local economy potentially generating more jobs in other sectors within that community.
The vast majority of Wales is poverty stricken enough that it qualifies for special funding from the EU. Any form of investement, whether a good deal or not, that helps rejuvenate communities decimated by the closures of steel works and other manual industries in the 70s and 80s is a good investment.
It's 60 jobs over the next 3 years, so even better value for money.
R&D should be encouraged, and this to me actually sounds like a far better investment than a lot of the bribes that local government/councils put up to multinational firms to get jobs into the area and start a development community. It's a seed. It needs to be embraced by others in order to flourish. They've done the first step - and like any good investment, with it comes risk - risk that Nintendo will pull out as soon as their sweeteners dissapear, but if they're there for the next 3 years, then that is time enough to build up a regional hub for this type of thing. It'll be a waste of money only if they fail to continue the momentum they've just been granted and fail to get the full reward from their initial investment.
"so 60 people on wages of over £18,000 would generate considerable income for the local economy potentially generating more jobs in other sectors within that community"
So a simple cash injection improves the economy. Very keynesian. Sadly, with public debt spending acting as stimulus of half a trillion quid in the past ten years, and private debt of similar magnitiude or more, there's not been real economic growth, so I fail to see why this will make a difference.
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