Video game publishing giant Activision Blizzard has warned it might move its business out of Britain because of the government's ‘terrible mistake' in deciding to scrap tax relief for the games industry.
The US firm currently employs 600 developers in its British office based in Slough, has not ruled out moving its operations to another country with a more favourable tax environment, according to The Daily Telegraph.
Activision's chief exec, Bobby Kotick, told the newspaper: "I think it was a terrible mistake. There are so many other places that are encouraging the video games industry."
In his June Emergency Budget, Chancellor George Osborne took the decision to scrap proposals for tax relief suggested by Alistair Darling, dubbing them ‘poorly targeted' despite both the Conservatives and Liberal Democrats' pre-election enthusiasm and vows to back the tax relief.
Kotick's warning comes just one week after one of Activision's flagship games, Call of Duty: Black Ops, passed the $1bn sales barrier to be crowned the best-selling game of 2010.
He reportedly said that while the UK is chock full of talented developers, the tax relief is needed as other countries like China and Singapore plus selective US states are using tax incentives to lure big games publishers to their shores.
While few can argue that the UK does not need to cut its budget deficit somehow, the UK's gaming industry body TIGA has reportedly warned that Britain risks an exodus of clever game developers to other countries as a result of the tax situation.
The body has reportedly called for the reintroduction of tax relief and believes such a move would secure some 3,500 graduate jobs plus investment to bank-roll students studying maths and science.
Richard Wilson, chief exec of TIGA, told the newspaper: "For too long, the Coalition government has acted like a one-club golfer. It has had a strategy for reducing the deficit but little to say about growth. The video game sector offers opportunities for growth and high value, high technology job creation for the UK."
TIGA reportedly added that the UK games industry has fallen by 9 percent in the past two years with investment plunging from £458m to £417m.