The Westminster eForum discussion in London on 20 January 2010 went over a lot of ground, from digital distribution to games education to tax breaks. UK games classification got a special mention, with Keith Ramsdale of EA Northern Europe making a special plea to the government to “just hurry up and make PEGI law” (the current UK games rating system is being reviewed at the moment and may or may not become law before the next election).
It was well attended by industry figures, including David Braben (of Elite fame) and Ian Livingstone of Eidos as well as representatives from EA, Codemasters and Unity to name but a few. Also attending was gaming champion Tom Watson MP (Labour), who chaired the first half of the session, and Ed Vaizey MP (Conservative), the Shadow Minister for Culture and the Creative Industries.
My thoughts on the highlights below…
There was a lot of discussion about the need for a tax break for the UK games industry. Richard Wilson of TIGA in particular put forward a strong argument for the tax break (and separately Mike Rawlinson of ELSPA has done the same). Keith Ramsdale of EA Northern Europe argued that last year games made 44% more than films and music put together, but attract far less government support. Overall, the consensus was that the UK games industry punches above its weight, but without government tax breaks to match those being offered in competitor countries like France and Canada, it will decline (some predict that the UK will drop from its current place as the third-largest producer of games to sixth in the coming years).
There was also an interesting presentation from Dustin Chodorowicz of Nordicity regarding the Canadian experience of games tax breaks and the lessons the UK could learn from it. Unfortunately, with the present Labour government having refused a games tax break in this term, and Ed Vaizey’s rather blunt assessment that a future Conservative government would not introduce a games tax break in the next 2-3 years, all of this will have to remain on the backburner for a while to come.
The discussion about digital distribution was interesting, if not ground-breaking. The discussion ranged back and forth regarding the pros and cons of digital distribution, the consensus from the industry bods on the panel being that digital distribution would continue to expand rapidly in this and coming years, but there will still be a place for the retail market for some time to come.
One crucial issue which wasn’t discussed at all though is the secondary market in retail games and the total absence of a secondary market in digital distribution (or, put simply, I can buy Half Life 2 boxed second hand but I can’t buy it off Steam second hand). There is a lot of money to be made in second hand sales – for example, the UK’s only games retail chain GAME reported in 2008 that fully a quarter of its income derived from second hand sales.
All of this fundamentally derives from (i) gamers wanting to play games but not wanting to play full whack for them; and (ii) gamers wanting to make some money back from games they have played but don’t want to keep. So it seems likely that sheer consumer demand will mean that at some point a secondary market in digitally downloaded games will have to develop. Obviously though, this presents real commercial issues (why allow a digital game to be sold secondhand online for $10 when you can sell it firsthand online for $30?) – so whether or not a digital second hand sales market will survive is another question altogether.
In fact, there have already been a few isolated instances of gamers trying effectively to establish their own second hand market in digitally downloaded games (for example, last week a guy tried to sell his Steam account for $1,000), but they are pretty much doomed to failure as long as download platforms stick to their current legal structure in which they can stop and unwind any attempt to sell to someone else any games downloaded them from.
It seems to me that the change could come in one of two ways. Firstly, a legal challenge against the Terms of Service/Subscriber Agreements that the current download platforms make gamers agree to at the outset, on the basis that such contracts contain numerous unfair contract terms which should be struck down by the court (which I’m going to blog about separately). Secondly, and probably more likely, someone figures out a new model for profiting from digital second-hand sales and make a popular download platform out of it.
The discussion regarding games education was also interesting. The consensus from industry figures in the panel discussion was that the UK’s universities are not doing enough to prepare students for entry into the games industry. For example, David Braben of Frontier complained “we are getting far fewer people with computer science skills. We’re having to recruit people from abroad” and Ian Livingstone of Eidos worried that university courses have “dumbed down” recently (a constant refrain in UK papers for some time now).
But there were no figures from the education establishment on the panel to respond to those complaints. If there had been, I think they would have said that the issue is complicated and affects multiple industries, so a simple claim that universities don’t do enough isn’t particularly productive. But one big problem which does affect the games industry specifically is the perception among universities that universities simply don’t take games-focused courses seriously (according to one university lecturer who I spoke with) . That, it seems to me, is something that the games industry can and should help to remedy. (Clearly there is enough for a forum discussion on this issue alone!)
And, yes, Keith Vaz didn’t show up
Lastly, and most infamously, there was gaming opponent Keith Vaz MP’s no show. More on that here.
All in all, a great session, and I look forward to the next gathering on Monday 25th Jan at the Houses of Parliament for “Taking Games Seriously”…
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