Is the video game tax credit under fire?
It’s back-to-work time for the industry, and a recent report soberly entitled ‘Expenditure Review: Business Support’, drawn up by the General Inspectorate of Finance, casts a gloomy shadow over the end of the year. Among other measures to reduce the public deficit, the IGF recommends scrapping the Video Game Tax Credit (CIJV).
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In this three-page factsheet, the rapporteurs note that there appears to be no specific evaluation of the tax credit to assess its effectiveness in retaining film studios in France (as regularly called for by the industry), and that other support mechanisms exist to mitigate the impact of its potential discontinuation (grant schemes, loans, guarantees, etc.). The IGF also portrays the sector as prosperous and dynamic, thereby appearing to irresponsibly overlook all the economic complexities of such a specialised and unique sector.
The SNJV, with the support of all the regional associations, including Game IN, is stepping up to defend French companies, and Plaine Images can only agree: the CIJV generates more revenue than it costs, and several studies demonstrate its positive impact on studios’ turnover. The romanticised image of a thriving industry is a world away from our day-to-day reality as industry supporters; small independent studios and the sector’s heavyweights alike need this scheme to help offset their substantial production costs.
Let us not forget that the video game industry remains the world’s leading cultural industry, and that the video game sector in France is resilient, thanks in particular to the CIJV. Market demand is constantly rising, and the supply of video games is growing even faster: as a result, staying in the race in an exponentially expanding market is a constant challenge.
A recent parliamentary report (May 2024) noted, in this regard, the beneficial effects of the CIJV on the sector: the CIJV is very widely distributed throughout the country, with the emergence of genuine regional video game hubs, including the Hauts-de-France region. The rapporteur noted that the scheme had created a positive dynamic across the country, enabling France to position itself as a competitive and innovative player on the international video games scene… and concluded that ‘the CIJV is essential to the development of the French video games sector, against a backdrop of extremely fierce international competition’.
In a glimmer of hope, we have learnt that the Directorate-General for Enterprises (DGE) has expressed opposition to the scheme’s abolition – is this proof that it anticipates the negative consequences for the sector?