Scottish Independence And How It Could Affect The Games Industry

In under two weeks time, the people of Scotland will decide whether their country will become independent from the rest of the United Kingdom. Two weeks today, we’ll either be preparing for a massive change as the country attempts to stand on its own two feet, or things will remain similar how they are now, with the country staying part of the union but being granted more individual powers. Right now, it could go either way, and there are good and bad points for every angle, and in every sector.

Scotland’s games industry is worth over £30 million annually to the Scottish economy, and is extremely important, with several universities offering courses in game development and animation, and the country being heavily invested in games with studios big and small all over the land. The most notable is Grand Theft Auto developer Rockstar North, situated in Edinburgh. While their profits aren’t all coming back into the Scottish economy, with parent company Rockstar Games and their publisher Take-Two Interactive being based in New York, it does create a lot of stable jobs in the capital.

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It is quite incredible to think that the biggest game property in the world comes out of such a small country, and this naturally instils hope in the Yes voters: if we can do something this big, we can do anything, right? Despite the apparent size of the sector, well researched information on the extent of the Scottish games industry is shaky, with one poorly researched report stating that the industry only employed 200 people and added a gross value of £0 into the Scottish creative economy in 2010. ScottishGames.net has a good breakdown of this, stating how farcical the report is and that we need to get the word out about how big the industry is.

And here lies the problem – with this official report almost entirely overlooking the importance of the Scottish games industry, might not an independent government think the same? It’s clear that there would be a lot to sort out in the eighteen month period between a vote for independence and Scotland becoming an independent country, with currency, oil, nuclear power, and of course entry to the European Union all being at the forefront. Where does the games industry fit in here, and how exactly do we get the word out? Granted, it’s not the most pressing issue, but there are some things which should not be overlooked.

It doesn’t help that Rockstar North, the biggest company in the games sector in Scotland – and one of the biggest developers in the world – is extremely secretive about, well, pretty much everything they do. You won’t see their CEO Leslie Benzies – who we at least know is voting Yes – describing the benefits of independence for the games sector, or trying to make the government take notice. How many GTA players do you think – the players that just play the games – know that it was made in Edinburgh?

It’s the same for Minecraft, too. You could probably say that this is one of the biggest games in the world alongside Grand Theft Auto, and while it was originally conceived in Sweden and created by Mojang, development for the console versions – arguably more popular than the PC version, with the PS4 version releasing just yesterday and Xbox One version today – is handled by 4J Studios, based in Scotland. But how many Minecraft players know that?

The Scottish games industry might be big, and it might be important, but unless Scotland as an independent country is aware of it, where’s the real point, and how can it move forward?

It all comes down to money; no matter how much any given developer wants to make a game – and even if they’re comfortable making it in their home nation – if taxes get in the way, then they may not have the means to do so. The United Kingdom has confirmed tax breaks for UK-developed games which are “culturally British”, and it’s a bit of an odd system which involves specifications within your game reflecting Britain as a whole. But nevertheless, it’s tax breaks, and that’s sometimes what smaller developers need: confirmation that they’re benefit by staying here.

According to the Scottish government, these tax breaks would be kept if Scotland were to become an independent country, and that’s not all. The government would also cut corporation tax, aiming to make game developers better off than if they remained part of the UK. This is the SNP talking, and of course it is their mission to make sure an independent Scotland seems fair and good for everyone. In reality, these tax breaks would need to be altered to apply to Scotland, and then applied for again through the European Commission, after being granted access to the EU, of course.

“The cultural test in order to receive tax breaks would still have to stand to get through the European Commission. So what would it mean to be a culturally Scottish game?” said one Scottish games executive, according to MCV. There’s no denying that Scotland has a rich culture, but time would have to be spent to develop a new list of culturally-correct terms before tax breaks would be confirmed. And naturally, this isn’t at the forefront of the government’s proposals.

Saying that, it could all go very smoothly, and in a matter of years we could be in a situation similar to Canada, albeit on a smaller scale. Canada is currently a haven for game developers, offering numerous incentives for developers through tax credits, where high percentages of labour – and even distributing or marketing in some cases – will be covered by the government and more. There’s no saying that Scotland could go this route any more than the UK could as a whole, but there seems to be a good basis, with a Scottish government controlling these taxes to allow them to excel in this area, if they choose.

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Currency itself seems to be an issue of note at the moment, with the highly debated topic of how an independent Scotland could use the pound without a currency union coming into discussion at every opportunity. If the currency were to change, it would no doubt affect things such as the PlayStation Store and Xbox Live Marketplace, where Scotland is currently part of the UK using the pound. It’s likely that people in an independent Scotland would have to change their accounts to reflect this, and then potentially face further charges for their content. It’s hard to pin down the exact details when so much is uncertain, but essentially Scotland would have to be treated as either another European region or its own state.

If you look at the Republic of Ireland, PlayStation Mobile only made its way to there over a year after games were available in the UK. Now, not being able to get these smaller, cheap games on your Vita isn’t a huge disadvantage, but this is only one example of where being treated as a different region means that you lose out in the games industry.

Like every part of this debate, Scotland becoming an independent country would have its pros and cons when it comes to the games industry. Yes, we might become a tax haven for developers, but with so much to work through, there’s no guarantee that we’ll get there any time soon. If there is a Yes vote, then Rockstar, 4J Studios, and their hundred other counterparts in Scotland must do their part to make sure the country can be seen as an important area for games development and distribution, so this industry can move forward. And if there’s a No vote, things will stay somewhat the same – we’ll get tax breaks much sooner, and won’t have to worry about region issues.

Ultimately, it’s up to the population of Scotland to decide where the country (and with it, the games industry) goes on September 18th, and no matter what happens then, we should endeavour to show just how important this sector of the Scottish economy is, and how much better it could be in the future.

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39 Comments

  1. I honestly dont get why independance is something Scottish people or government wants. Stronger in numbers and all that. It could create a number of complications which as far as i can see arnt really necessary.

    More hassle than its worth? Scotland has a very strong list of assets though. From gaming to oil and other valuable industries. If it does go alone it will be very very interesting to see how much it prospers.

    Would it need its own licenses for games too which inevitably holds up EU from getting games as fast as america?

    • As someone with many relatives in Scotland, my parent and brothers being Scottish, and me being the only one not Scottish since they moved to ‘that place’ – my biggest concern is that whilst i understand the great push for independence, its such a national unifier for Scotland, I still see, although I only vaguely follow the yes/no campaigns and only then to a superficial degree, that the very real question needs to be asked of Alex Salmond – what are you going to do if it turns out to be wrong, what if all these changes ends up making Scotland less competitive and less economically stable. Basically whats the ‘it’s all gone tits up, what do we do to make the best of it as we’re now on our own plan’? And for me, seeing the bemusement in Salmond’s reaction to the Bank of England and the UK government saying ‘Nah, no currency union’ was horrifying – it’s as though he honestly thinks that the Utopian outlook is guaranteed to appear, and that well, to put it bluntly, he’s going to get everything he wants and to set the basis for every agenda going forward when it comes to any discussions between the Union and Scotland

      Because the very real fear is if things don’t pan out and things like taxation etc have to rise, businesses will think about moving away from Scotland, particularly those like RS North because their parent companies are multi nationals.

      Whichever way it goes I hope that it turns out for the best once and for all for the people of Scotland.

  2. I think that the impact to the games industry of a ‘yes’ vote would be similar to the impact on other industries: massive contraction following a run on the pound caused by uncertainty.

    On the other hand it would make the UK Labour party unelectable, so not all bad! Bit of politics on a Friday lunchtime!

  3. Have to say, this seems an unusually (one-sided) political article for the sixthaxis – unless there is an article to follow that has about 90% cons, of course? I accept it is extremely important to the UK as a whole, and thus very newsworthy, but maybe balance it out a bit more.

    I keep waiting to see more news on how it will affect the rest of the UK. As an example, my wife is half English, half Scottish. Her Scottish family are pro independence, while the English side is unfortunately no longer with us. Will she need to choose her nationality for her next passport. Will it make a difference that our daughter and grandchildren see themselves as British (or, if necessary, English)? Will she need to pay import duties on items next time she travels north, or even have to use a different currency? So many questions with such unclear answers all round.

    Surely, the way of the future should be more coming together rather than every man for themselves? Long term, if/when we reach out for other planets, will it be each nation grabbing what they can? If that’s the case, I feel sorry for countries like Nauru and Malta (Vatican City may well have “assistance” in their ascension to the stars, of course).

    And with regard to separate game licences, I suspect they may be fine as long as Gaelic isn’t made the national language. :)

    Apologies for the TL;DR type post.

    • All good points.

      Personally I’m hoping for a ‘yes’ vote: it will be conclusive at least. A ‘no’ vote doesn’t make the issue go away and ends up being interpreted as ‘not yet’.

      Splitting the union would be hugely damaging, but if a large proportion of Scots want to go then I’d prefer to get it over with.

      • I’m a no voter, I might have actually gone with a “not yet” option.

        I know people voting yes as they don’t think the chance will ever come up again, that’s a dangerous path in my opinion.

        I don’t trust Westminster but it’s a known quantity. The promises of the yes campaign, the ones they don’t actually have the power to promise are what made me vote no, that and how they seem to have spent the oil money 5 times over as well as putting it into their rainy day pot.

        Back on topic though, I don’t see a big hit to the gaming industry, there are studios all over the world and there will continue to be, if anything, in the event of a yes vote then Salmon will need to offer every invective going to get business to stay /relocate here, games studios seems a nice quick win if they knock a few quid off their tax bill in exchange for staying.

    • From my reading, the article is mainly about the impact that independence would have, not really about which way you should vote.

      AS for your other questions, you wife would then hold dual nationality and be eligible for both passports, the same as if she were half French or half Italian, or whatever. I don’t know how that would trickle down to your daughter and onwards.

      If Scotland gains independence and then is successful in applying for EU membership, then they will be part of the single market laws. If they don’t, then they could also join the European Free Trade Association alongside Switzerland, Norway, Iceland and Lichtenstein, and become part of the single market that way.

      Finally, currency, as Blair noted, is a big talking point, but even without a currency union, Scotland can use the pound if they want, just as there are tons of states out there that use the US Dollar. The only thing people visiting from the UK will have to be aware of is Scottish bank notes, but then what’s changed there?

      • Nothing prevents an independent Scotland from using Sterling, but it would put them under tight constraints. The BoE would still control aspects of Scotland’s economic policy.

        Biggest problem with keeping the pound is that the EU accession rules require countries seeking membership to have their own central bank. Scotland would fail this test.

      • @ NotSmartEnough – Thats what I thought. As far as I understood, if Scotland keep the pound they won’t have their own central bank and won’t reach the EU requirements resulting in them having to swap to the Euro.

    • I just wanted to say that, up until 1948, Irish people who wished to self-identify as British had that option. My parents were both born in 1948 and a British passport was an option to them. This was part of setting up the Irish Free-state; near-decendants were catered for.

      My point is: if Scotland goes independent and Scottish people still wish to identify was British, I’m sure that will be an option. Look at the Good Friday agreement in Northern Ireland; people can call themselves (and be recognised as) Irish, British, or both! Happy days!

      As for currency, if the UK adopted the euro (perhaps even as part of a dual-currency system) this issue is moot, but I actually think, if it’s a Yes, the pound will remain as part of a currency union. The thing is, legally, Scotland cannot be prevented from using the pound, as it’s a fully tradeable and international currency.

      I like your point about the solar system. I am Irish and I like being Irish. That said, I consider myself a member of the human race first and foremost. While I respect different cultures and diversity, I hope one day all these imaginary lines in the sand are eroded. To the stars, comrades!

      :)

  4. A tongue-in-cheek response.

    As a Scot, I think I’m qualified to say that there are 2 principal reasons why we excel at indoor sports (think videogames, snooker & horizontal skiing) and less well at outdoor sports (fitbaw & aw that [email protected]).

    There are:
    1) the weather;
    2) aw those hills.

    No matter what the outcome, we’ll continue the fine tradition DNA Design as a small studio (amongst others) kicked off North of the Border, before the larger developers muscled in on the profits.

  5. The issue here is though that a lot of people who are in the “Yes” side are doing so with emotive…without an actual think on the results or consequences to the nation or its industries like games developers.

    The fact is there is no real facts as to how it would all work if we did vote Yes, can I take that risk with my kids future? It may be better it may be worse but at least I know what I get at the moment, stability of some sort.

    I don’t want to mess up my kids future, nor the currency nor the games developers in Scotland and since the unknown is the biggest risk here I can’t see how anyone could vote Yes without all the facts.

    It would be nice to be independent but I can’t vote for that if I don’t know how it will all work thus it has to be a no…and to protect the important things in life…like games developers!!! :)

    • Homerjnick, that is a massively sweeping generalisation of the Scottish population & also untrue. A lot of us are massively well-informed and are also looking at it entirely logically and towards a better future for our children too.

      It is demonstrable that services are being eroded South of the Border whilst taxes & prices continue to increase. You have also just highlighted my favourite theme of the referendum – which is that the Yes campaign are focussed on hope & positive change whilst the Better Together campaign are trading on fear & resistance to change.

      I’m not trying to belittle your opinion – I was of a similar mindset several months but swung from No to Maybe to Yes personally – I just take umbrage at the implications that we Scots are acting entirely out of emotion.

      Personally, I’m far more intrigued by the fact that I’ve been told numerous times by Londoners that Scotland are somehow supported or drip-fed by London but the unquantified promises being offered by politicians against the split reek of fear & desperation to cling to the Union. If the former were truly the case, what not cut us dogs loose?

      Anyway, not looking to start a massive political debate – just wanted to set the record a little straighter.

      • Thanks for your input…I appreciate your opinion. Well informed though? How? There are no answers to any of the questions posed from the No campaign…therefore it is an unknown. Being logical do we take what we have with the promise to try and improve things or go into an unknown…

        Logically, for me, and for many I’ve talked to, the answer has to be with No even though we want Yes.

        My Facebook is full of Scots who want Yes and are quoting Braveheart…by far the majority of people I know who are voting Yes are simply doing so because of nationalism…without any thought. When I post on their FB page about these things they are like “We don’t care about that”.

    • If I thought it would benefit Scotland to go independent I’d say “yeah, go for it” but I just don’t see that happening. I’m not too worried about it (as a Welshman living in Wales) but I’d really like to know the UK (and an independent Scotland) would be okay. Fingers crossed, voters see sense.

  6. I was wondering have any games failed or had to be changed to pass the britishness test?

    And on a political note, David Cameron knows the more he tells Scots to vote no, the more likely they’ll do the opposite and the labour vote will be diminished.

    • Thankfully, Alex Salmond comes across as a “I want into the history books over Scottish independence and will f*** this country over to get in there” sort-of-bloke. I find him damn scary when I think about the power and influence he’s already acquired. :-\

      • Yep and he’s got/had links to Rupert Murdoch which is enough to put anyone off!

  7. As a Englishman in Aberdeen I’m amazed at what most Scots take for granted, free prescriptions, subsidised dental care and a living wage the Scottish government have a large say in British politics but Westminster had little say in Scotland devolution policy (tuition fees are a great example, Scottish MPs insisted English universities must charge but English MPs don’t have a say on Scottish universities )
    I honestly doubt these things will stay the same with a “yes vote” Bunimomike is spot on with his opinion on slippery Salmond setting Scotland up for a massive national fall with no real alternative to currency, military or EU membership a Yes vote means I go back to Newcastle a No vote means a free education and career.

    • Those things aren’t taken for granted. We are fighting to keep them, and had to fight to keep them or re-introduce them in some cases.

      As for Scots MPs in Westminister voting on matters that only affect England look to Labour, Lib DEms, and Tories for that. The SNP MPs in Westminister do not vote on matters that don’t affect Scotland.

      There are plenty of alternatives for currency, a currecny union would help rUK and Scotland, or just use the pouand as is, or set up an seperate currency, or use the dollar or other internationally tradable currency.

      Military has several options too, and whatever happens even though the SNP propose spending less than is currently spent on Scotlands behalf towards the UK Forces it would still work out as spending more on armed forces in Scotland.

      EU membership is not going to be a problem as we already comply with EU laws and regulations and are EU citizens.

      • “EU membership is not going to be a problem”
        Errr, I doubt that very much.
        For a start, to join the EU you need to independent central bank so that it has control over its monetary policies. So basically, Scotland will either have to use the Euro, or have a currency union with the rUK, which is highly unlikely as there’s zero benefit to the rUK in the long run. If an independent Scotland decides to use the Pound without a currency union, then it won’t be allowed in the EU as it doesn’t meet the requirements.

        And then there’s also the fact Spain will purposely make it as difficult as possible for Scotland to join to dissuade Catalonia from doing the same, so they’ll use their veto at every available opportunity. Germany too will probably want to see how Scotland’s economy fares after going independent as they won’t want another Greece or Italy on their hands.

        Also (I’m not entirely sure about this), but even though you may already comply with EU laws, Scots are only EU citizens because they are citizens of the UK, the UK of which, is an EU Member State. As soon as Scotland leaves the UK, surely that means Scots are not EU citizens as Scotland is not an EU Member State?

        It’s going to be quite interesting to see how all the geo-politics plays out should the result be Yes.

      • A central bank is not a requirement of joining the EU, and in order to use the Euro there is a 2 year period where the government would have to adhere to certain fiscal targets before adopting the Euro. As for the currency union, it may be of no benefit in the long run but at the moment it will help maintain the strength of the Pound. As it is at the moment the likelihood of a Yes and no CU is making the markets jittery and has caused a drop in the value of the pound.

        Other EU members may be troublesome, but in turn not allowing Scotland entry into the EU would also cause them problems. Spain in particular with access to Scottish and Scandanavian waters for fishing. Germay I doubt would be that worried as there is no plans for Scotland to join the Euro, and again it would take a couple of years to show that we were capable of watching our finances before Euro entry was allowed.

        That’s the point I was kind of making, the EU would not want to expel 5 million of it’s citizens and strip them of their citizenship just because they voted to run their own affairs.

        I for one would rather have Scotland as an independent country join the EFTA, not join Nato, and became a republic.
        There’s also a case for having our own currency with no need for a central bank. That the No campaign throw up Panama a lot is ludicrous as they are pegged to the Dollar, have no central bank, and have the least dodgy banks in the world as having no central bank means that they have to be careful with their money.

  8. Im a strong YES voter, and I firmly believe YES will be the result of this referendum, most of us Scots want change, as the UK just doesn’t work for us. Hence the reason SNP won by a landslide in 2011, in which part of their mandate was to have a referendum by late 2014. The people backed this, and I’m confident the same again.

    In regards to games, Im not sure how it will affect the industry, but I’m sure it will be fine!

  9. weird that this article is on here considering that when Peter first bought this site there was someone being racist in the comments and spouting off about the bnp, I argued with the racist guy and emailed Peter saying that he should ban the racist/delete his comments and was told that this isn’t the place for ‘politics’. The guy in question then offended one of the inner circle and was insta banned, thankfully.
    So yeah, strange that this article wasn’t seen as politically biased.

  10. A couple of things, of the top of my head, relevant to the ‘culturally Scottish’ tax break in the form of GTA. There’s the Scots language references of BAWSAQ(ball sack) for one, and a company called Fridge Itfrigid) seen in GTA V for another.
    Hopefully that wouldn’t extend to the twee stereotypes of old and involve a game where you play as a bit of shortbread in a kilt hunting haggis on the brae at the side of a loch, co-op being P1 on the low road and P2 on the high road, with some power-ups in the form of smack, Bucky, and Tennents Super.
    Anyway, quality article from Blair. While there are risks, there is no certainty in anything. I for one am willing to take the risk to try and see if we can have something different form the status quo. I don’t see any radical change coming through whilst part of the British State, and the powers on offer are still unknown even though the option was taken off the ballot.

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