Vision of Irish global games hub fails to materialise

While drive to build sector has lost momentum, it hasn’t been all bad news

 

The Irish games industry has found itself in an unusual position. From once being hailed as the potential future of Ireland’s economy, it has since landed in a sort of limbo.

“It’s just not acceptable to leave an entire industry sorting itself out,” says Richard Barnwell, head of Digit Games.

Less than five years ago, a Forfás report had painted a bright picture of Ireland’s future role within the European – indeed, global – games industry, pointing out that with the right supports and measures, Ireland had the potential to become a so- called games hub, home to the giants of the industry and aspiring start-ups.

With that was the potential to grow employment within the sector to around 4,000, effectively doubling the number of jobs here.

The report identified digitally distributed and online games as the main areas of opportunity for Ireland, with a particular focus on creative game development, support and the exploitation of intellectual property.

Optimistic

The report backed up plans announced by the new Government prior to its election that it would extend tax reliefs, changing research and development tax credits to include games design.

Games creators took the Forfás report as a positive sign that change was coming, with then chief executive of industry group Games Ireland David Sweeney describing it as a clear signpost for the incentive package that Ireland would develop and offer to a fast-changing industry. The ultimate goal was to become the best place to develop games by 2016.

It’s a goal Ireland looks likely to miss. Many of the recommendations in the report – the offering of incentives in the form of tax reliefs for games firms, the creation of a cluster of excellence – have yet to be acted upon in any meaningful way.

The latest estimates on employment from the Department of Enterprise indicate that there has been little – if any – growth in jobs in the sector since the report was published in 2011.

It’s a source of frustration for those who have been pulling to develop Ireland’s games industry into something that will grow and sustain jobs in the future.

It’s all the more frustrating that it came following an initial flurry of activity aimed at growing the sector, providing funding and other support. In the wake of the Forfás report, one proposal – the establishment of the cluster development team – made it to fruition.

The appointment of the group, which included academics, State representatives and industry professionals, was announced to great fanfare in 2012. Its task was to drive the implementation of recommendations made in the Forfás document. However, more than three years later, its draft report has not been published.

Tony Kelly, who headed up the group for part of its lifespan, said the team was left to its own devices. “The first meeting we were told ‘there’s no resources and we’re it’. So it was only ever going to be a report after all that effort. And even then it’s not going to be published.”

Discussions

“We got frustrated and decided we’d start into the report. It was agreed the industry would do the first draft,” says Kelly. The main feedback from the group was that the report was very negative. “The industry said, well it is negative because it’s a negative situation.”

And that, it seemed, was that for the cluster development team. The Department of Jobs, Enterprise and Innovation confirmed it had no plans to publish the draft report. “It was a colossal and total waste of time,” says Kelly.

It seems that Ireland’s drive towards a global games hub has lost momentum, at least at State level. Part of that was due to consolidation in the sector that burned the Irish economy, with the closure of Popcap with the loss of almost 100 jobs, and the shutdown of Jolt Online Gaming.

Elsewhere in the industry, games studios were closing down as the shift towards free-to- play games caught some firms by surprise.

In the meantime, the UK has not only caught up with Ireland, but leapfrogged us in terms of being a desirable place to do business for games creators. In the time it took for stakeholders in Ireland to consider their options, our closest neighbour has implemented a tax credit system aimed at games developers and set about creating an environment that would foster the industry’s growth, including a funding structure that allows developers to access funding matching and credits to grow their potential investment pile.

“We’re missing two things here: we’re missing the grant support and the development loan financing support from the equivalent of the [Irish] Film Board, and we’re missing the games tax credit, and we’re ultimately uncompetitive as a result,” says Barry O’Neill of Storytoys.

“Just five years ago, the UK was talking about brain drain, talking about key talent moving away from the UK attracted to Canada by various tax incentives.”

Now, he says, Ireland is at a disadvantage to the UK.

Although seed capital funds and other supports such as the competitive start fund are often pointed to in the debate over supports for the games industry here, the lack of specific games funds can make it more difficult for small companies to get the funding they need to get off the ground.

The Department of Jobs, Enterprise and Innovation said proposals for a tax credit aimed at games firms has been submitted to the Department of Finance, and any decision on that credit, which relates to corporation tax, will be Michael Noonan’s department.

Even if it was implemented, however, it would be of little use to the emerging independent firms, as many will not make a profit for some time. Of more use is the cultural tax credit, which is typically made available by film boards.

However, IDA Ireland isn’t convinced that implementing tax credits in the past four years would have been the right move.

“Personally I think over the past three or four years because of the vastly changing landscape, I think we were right not to make any decisions in the country around what they would look like,” says Shane Nolan of IDA Ireland.

Obsolete

It hasn’t been all bad news for Ireland. There have been continued announcements of employment in the support side of the industry, which IDA Ireland argues is of more value economically.

“We have to be smart in the activities that we chase, so we are chasing support in an environment where our efforts are still contributing to reducing the unemployment levels and creating further employment, the support and community management aspect of games has the biggest impact on that agenda,” says Nolan.

However, Barry O’Neill points out that firms that are not creating games in Ireland and fall under the heading of “Ireland Inc” firms, are setting up for the same reasons that LinkedIn and many US corporations have set up. Such work, he says, is transient.

“If Ireland really wants to compete in the games industry, it has to have the incentives in place for game creation to actually build and create a nucleus from which indies can spin off, as has happened in the UK,” says O’Neill.

There have been some development jobs in there too, with the latest announcement by KamaGames that it would make Ireland its headquarters; among the finance and support jobs are plans for game design. Digit, meanwhile, is also in the process of expanding its games team.

Those working within the sector are clear about what they need. The tax credits are the most important, Barnwell says: everything else can be provided by the industry if needed.

An example of that was Digit’s decision to take two indie games developers into an incubator programme at its offices in Dublin. The nominated firms, Bitsmith and Batcat, were given the support and mentorship and access to equipment that the firms needed to build their business. The programme lasted two years, until Digit’s expansion meant they needed the office space.

Mentoring

Among those who took part in Gamepad was Pewter Games Studio, which went on to get further funding from Enterprise Ireland. But it is a route that has been closed off to other new companies, Pewter’s Ben Clavin says.

The industry feels it has done its part, and will continue to play a role in further developing the sector. However, it says, it can’t do it alone.

“It’s a tough industry,” says Kelly. “But you have to make a choice either you’re going to compete or not, and that decision has never been made. As a result, some very talented folks have been left on their own to try to work it out.”

While Games Ireland is determined to push on for change in the Irish industry, another group has sprung up, representing the independent developers. Imirt is set to hold elections to appoint its representative, and developer Owen Harris says the group has a clear mandate: to represent games creators overseas , bringing attention to their work, and to improve the standard of games here through organising mentorship programmes.

“We’d been waiting a really long time for something to happen. We’d been waiting a really long time for someone to do something. And it was time to stop waiting and just do it ourselves,” he said.

“We wanted to have an organisation that was completely transparent, completely open, and that would represent the interests of Irish games creators.”

As the next budget looms, the games industry isn’t optimistic that anything will be decided in its favour, at least not in the lifetime of this Government. But they’re not backing down. With a slice of $100 billion industry up for grabs, they can’t afford to.

“A lot of noise is going to be made,” says Barnwell. “It’s not that we’ve suddenly disappeared and are taking this lying down. It’s more that we’re getting all our ducks in a row. We’ll be making a lot of noise about what we expect and what needs to be happening in the next short while.”

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