Brexit and Games: What Do I Need To Know About It And How Will It Affect My Business?
At Meet the Gaming Experts in Brighton, the games industry came together to share drinks, snacks and to talk about the hot topic dominating the games industry: Brexit.
The political earthquake unleashed by the referendum vote has led to a change of Prime Minister, a coup attempt against the leader of the Labour party and a hefty dose of uncertainty.
But what tangible impact is it going to actually have on the economy and the way that games businesses, often born with a international outlook, operate? We spoke to a number of experts to try to figure things out.
The financial and accounting implications;
Chartered Accountant Luke Thomas from Plus Accounting spoke about taking advantage of the opportunities that existed prior to Brexit.
In particular, Luke recommended that developers take advantage of games tax relief. The scheme, which offers significant tax benefits for games businesses meeting a cultural test, is not directly under threat from the vote, but could be hit if the public finances take a turn for the worse. So it’s best to get on board with it while you can.
Luke also spoke briefly about the impact of the vote on sterling. While it certainly could not be considered a good thing, the weakness of the pound does offer some benefits to companies generating significant sales in dollar territories or areas where the currency is underpinned by the dollar.
But with many services, such as web hosting, sold by US companies invoicing in dollars and the cost of foreign travel increased, those benefits may not prove as large as businesses may hope.
The legal implications;
Mark O’Halloran, Partner at Coffin Mew, spoke to us about the possible legal challenges facing games businesses in the aftermath of the referendum.
The key message for businesses is not to panic. Though the Brexit vote went against games industry wishes, legally the referendum is advisory and has not forced any immediate legal changes – meaning businesses shouldn’t change anything right now.
There will, however, be potential challenges down the line. Once Article 50, the mechanism for leaving the EU is activated, there will be a flurry of negotiations that will retain, change or remove laws.
And games businesses need to, in particular, watch out for legal changes relating to intellectual property law, which is essential for businesses, keep a close eye on how much access businesses will have to the single market and for laws relating to freedom of movement.
Marketing and PR;
Finally, we heard from Tracey McGarrigan, CEO at Ansible Comms, about the marketing and PR implications of the Brexit vote.
The key marketing problem facing games businesses is, unsurprisingly, in the name of the discipline: access to the market. While in the EU, Britain has unfettered access to 27 markets across the continent – allowing businesses to quickly localise and release games into different territories.
With Britain leaving the EU, that access is under threat. But the extent to which it matters relies on a couple of factors.
First, it relies upon the negotiations themselves. A good Brexit might mean little or no change in the situation for businesses, but a bad Brexit could lead to tariffs and paperwork – this is up in the air and won’t be resolved for some time.
Second, the nature of different games businesses will determine how much of an issue this is. Games companies who release digital content will have problems, but the nature of distribution technology means that additional friction will be minimal. But for companies releasing or distributing physical goods, things could prove complicated.
The single most important thing for games businesses is that Brexit will affect their business, but it won’t for a considerable length of time. With negotiations yet to start and the political situation far from certain in Britain, there’s a period of considerable grace before businesses need to make practical changes.
Nevertheless, businesses should be thinking about Brexit and planning as best as they can for its impact. By considering how your business interacts with European markets and what you’d need to do to adapt to a worst case scenario, you can give your games business a solid head start over the rest of your rivals in the coming weeks, months and years.