Tommy Broughan (Dublin North East, Independent)
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235. To ask the Minister for Jobs, Enterprise and Innovation further to Parliamentary Question No. 318 of 29 September 2015, the details of any further developments relating to investment in the computer games industry; if it will involve amendments to the Finance Bill; and if he will make a statement on the matter. [42658/15]

Richard Bruton (Dublin North Central, Fine Gael)
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The games sector experienced considerable growth in Ireland in recent years, with many of the sector’s largest global players having established operations in Ireland. The games sector in Ireland encompasses a breadth of areas including, for example games localisation, games development, platform development/porting, technology development/middleware, publishing and customer and community management activities and involving both foreign owned and Irish owned operations.

Because of how data is classified, and the nature of the sector itself, tracking of employment in the games industry and related activities proves challenging. Analysis undertaken by Forfás in 2011 estimated that total employment in the sector stood at around 2,200 having experienced a five-fold increase from a low base of an estimated 400 in 2004. This was driven mainly by rapid growth in foreign direct investment in the sector over the period, particularly in activities such as customer and technical support, community management and games localisation. In tandem with this growth, there has also been considerable expansion within the broader consumer internet sector (including social media and mobile internet) to which a large part of the games industry is inextricably linked and with other related activities such as software development, financial services, online gambling, information security, animation & film production, and creative arts (music, art, literature).This is a broad sector that continues to evolve and faces considerable disruptive competitive forces globally – forces that are shifting the nature of the activities, channels to market, players and competitors – although there are more recent indications of greater stability in the market.

Nevertheless, Ireland continues to attract foreign investment in the wider sector and continues to have a hotbed of very early stage start-ups and independent games designers, with new entrants every year. The Irish owned element of the Irish games cluster is still relatively young by international standards but its reputation is growing and awareness within the investor community to the attractiveness of the Irish games sector is increasing. A number of Irish games startups (in middleware and content) have raised seed and follow on series ‘A’ funding investments over the last 24 months. Current exports from the Irish owned segment account for over 95 percent of their turnover and are oriented towards the UK and North American markets in the main.

In response to PQ 318 of 29 September (two months ago), I highlighted the fact that many of the actions set out in the Forfás report (2011) have been delivered upon since I established the Games Cluster Development Team in 2012. For example:

- a pilot “hothouse” initiative for undergraduate and Post-Leaving Certificate courses was devised and run in late 2013, which saw students from games, animation and multimedia courses working in multi-disciplinary teams on projects supported by an industry mentor;

- a leading games expert visited Ireland for six weeks in September and October 2014 as part of a Fulbright U.S. Specialist Award in conjunction with the HEA and carried out master classes and curriculum reviews of Digital Games courses at a number of Irish universities and colleges;

- EI’s Competitive Start Fund (€50k equity) has had a significant impact on the early stage indigenous games sector since December 2010. Over this period, EI has funded over 20 Games companies to date. The cohort has also availed of a number of start-up management development programmes;

- IDA Ireland sees indications of a stronger pipeline for production activities in the closely related animation sector post the enhancement of section 481.

- CEOs are collaborating in a structured way to grow the cluster to the next stage of international growth through industry representative groups such as Games Ireland. Indigenous indie developers have recently set up a new representative body called ‘Imirt’.

As with other companies in the technology and creative sectors, games companies can avail of the range of direct supports provided by the enterprise agencies such as the Seed Capital fund, In-market and Management development, R&D funding and tailored company expansion packages. A range of financial instruments also exists to assist companies which are not sector specific.

The enterprise development agencies have worked to heighten awareness within the sector of the existing R&D supports available to the Games sector. They held a number of R&D supports workshops and issued an enterprise friendly guide on R&D tax credits which included examples of relevance to games companies.

Games companies that can avail of existing R&D supports and R&D tax credits may be in a position to avail of the recently announced Knowledge Development Box (KDB) which will be provided for in the Finance Bill. There will also be a mechanism put in place to facilitate small and medium sized enterprises with income of less than €7.5 million arising from IP and group turnover of €50 million which will be introduced during 2016. The Capital Gains Tax Entrepreneur Relief introduced in Budget 2016 will also be available to those operating in the games sector (subject to certain criteria) as will the Earned Credit Income credit for self-employed and the extended 3 year corporation tax relief for start-up companies. Other non-sector specific longstanding tax related investment incentives include the Employment and Investment Incentive (EII) and Start up Refunds for Entrepreneurs (SURE).

It is important to note that Ireland’s attractiveness for business investment across a range of sectors involves range of factors that can influence location decisions. For example, the talent base associated with, and relevant to, the games sector is a significant attractiveness factor. Ireland also possesses a long history and tradition in technical and creative content development, through our innate storytelling abilities seen through the success of our animation industry to the international recognition of Ireland today as a centre of excellence for technology investment. Investment in Ireland’s broadband/internet infrastructures also has had a strong role to play in underpinning new activity in the games sector in recent years.

We have recently launched Enterprise Policy 2025 which sets out the ambition to have 2.18 million people in employment by 2020. The strategy spans a range of sectors including the ICT and creative sectors, of which the games industry is a part. Through the enterprise development agencies, and together with the industry, and we will work to ensure the employment growth potential of this dynamic sector is realised.