Ubisoft wants to make gigantic Berlin AAA console studio if given tax breaks

Nirolak · Feb 19, 2018

Quick Summary:

Ubisoft has a new 50 person studio in Berlin, currently assisting with Far Cry 5
They set up the studio as they wanted to attract a lot of staff from Central and Eastern Europe
They reached their current 50 staff goal way ahead of schedule
Currently they think they'll get to 100 or maybe 150 staff at most
They would like to go much, much larger, but won't unless they get tax breaks
To be clear, by "tax breaks", they almost assuredly mean the 20% rebates you can get in the UK and France for cultural works
There's some discussion of how there used to be AAA console studios in Germany, but with Crytek and Yager largely imploding, this is pretty much no longer true
They also mention that the two German game trade unions have merged and are going to be making a concerted push this year for tax breaks along with local developers like Ubisoft

Source: https://www.gamesindustry.biz/artic...-the-german-industry-needs-government-support

Memento · Feb 19, 2018

That is awesome

Ubisoft is really efficient

DriftingSpirit · Feb 19, 2018

More studios and employment is always welcome.

Good stuff Ubi

Turkoop · Feb 19, 2018

Videogames get a better point in germany, also in politics. Few politicans see also eSport as a important business. I hope they will help Ubisoft to do this.

ragingbegal · Feb 19, 2018

Turkoop said:
Videogames get a better point in germany, also in politics. Few politicans see also eSport as a important business. I hope they will help Ubisoft to do this.

If enlarging the studio is economicly viable then they should do it without tax breaks. If it's not then perhaps it's a poor business proposal. The public shouldn't subsidize businesses.

Datajoy · Feb 19, 2018

Aren't some of the teams making Star Citizen also located in Germany?

Deleted member 5015 · Feb 19, 2018

Germany, our saviour. /jk. More studios is a good thing, even if it means to be in germany.

Dingens · Feb 19, 2018

Dear Berlin, please don't bow to this sort of blackmail, tell them to go fuck themselves, and give the tax breaks to start-up/indie developers instead.

DieEnteWurzel · Feb 19, 2018

What kind of tax breaks are we talking about? (not specified in the article, dunno about Montreal situation)

Berlin beeing attractive for employees is nice and all but maybe this comes at a price? cant have your cake and eat it too
If they apply for publics funds available I dont see a problem
otherwise just move it to eastern europe, should be cheaper

Deleted member 8196 · Feb 19, 2018

Nirolak said:
They set up the studio as they wanted to attract a lot of staff from Central and Eastern Europe

They already have Ubi Kiev, Sofia and Bucharest, but i suppose they are small studios.

King_Moc · Feb 19, 2018

Dingens said:
Dear Berlin, please don't bow to this sort of blackmail, tell them to go fuck themselves, and give the tax breaks to start-up/indie developers instead.

I was assuming the tax breaks would be for the video game industry in general? I don't think the government is going to give tax breaks to one specific company within an industry, that'd be fucked up.

Kimura · Feb 19, 2018

Pay your taxes. If 50 is your limit, 50 is your limited. You could set up shop in many other countries with a lower tax rate. But you don't because Germany has a lot of quality infrastructure and mobile workforce. So pay your taxes. No excuses.

Nirolak · Feb 19, 2018

Stygr said:
They already have Ubi Kiev, Sofia and Bucharest, but i suppose they are small studios.

Specifically, Ubisoft found that lots of Eastern Europeans want to move to Berlin, and that this has been very helpful in recruiting for the studio.

Deleted member 426 · Feb 19, 2018

Yes please. Berlin is an tamazing city
Oh my god I'm stupid. I did read the op but I thought the title was still saying they wanted to make a AAA game set in Berlin. Ignore me.

(But seriously that would be good).

Benjamin1981 · Feb 19, 2018

Why should there be tax breaks? I'm not okay with subsidizing Ubisoft. They make enough money to pay for the studio themselves.

Nirolak · Feb 19, 2018

Kimura said:
Pay your taxes. If 50 is your limit, 50 is your limited. You could set up shop in many other countries with a lower tax rate. But you don't because Germany has a lot of quality infrastructure and mobile workforce. So pay your taxes. No excuses.

...They overwhelmingly do set up in other countries. Ubisoft Montreal has over 3000 employees.

Similarly, they set up a studio to grow to 800+ people in Toronto when they received tax breaks there too.

Even in Europe, just a few months ago they announced they're hiring 300+ new people in Sweden on top of the 400 they already have there.

tyfon · Feb 19, 2018

ragingbegal said:
If enlarging the studio is economicly viable then they should do it without tax breaks. If it's not then perhaps it's a poor business proposal. The public shouldn't subsidize businesses.

Yeah, I agree with this.
It's also illegal to do this within the EU, see the legal case against Apple/Ireland brought by EU.

X1 Two · Feb 19, 2018

Fuck tax breaks for moving jobs, it's not worth it. The moment those tax breaks run out they dissolve the company and move the jobs to the next place. Thank god Germany is quite strict on tax breaks, so I doubt it will happen. Also, tax breaks to go to Berlin is ridiculous in itself. Tax breaks to go to one of those crumbling cities in the East, ok. But to go to the city where everyone wants to be? LOL.

kaishek · Feb 19, 2018

I think Berlin will be fine without them. Pay your taxes.

Nirolak · Feb 19, 2018

tyfon said:
Yeah, I agree with this.
It's also illegal to do this within the EU, see the legal case against Apple/Ireland brought by EU.

You can give them cultural grants like they do in other countries.

tyfon · Feb 19, 2018

Nirolak said:
You can give them cultural grants like they do in other countries.

But they are asking for tax breaks, not cultural grants.
A grant is fixed, a tax break is floating.

ItWasMeantToBe19 · Feb 19, 2018

lol fuck off Ubisoft, why the fuck should Germany subsidize AAA video games.

Nirolak · Feb 19, 2018

tyfon said:
But they are asking for tax breaks, not cultural grants.
A grant is fixed, a tax break is floating.

They assuredly want what the UK has, which the European Commission just extended:

GamesIndustry.biz said:
The European Commission has extended the availability of tax relief for UK games firms to 2023.

In an online listing confirming the prologation of the initiative, the EC reveals tax relief will be available to games developers based in Britain - or working on a culturally British video game - until March 31st, 2023.

Video games tax relief were finally introduced in April 2014 after a hard-fought campaign from trade bodies and various developers based around the nation. Since then, hundreds of games have been certified for tax credits.

In the first nine months of 2017 alone, 161 new titles were approved and tax relief has reportedly driven £160m in total budget spend during this period. Back in June, it was reported that more than £73m has been paid out to developers over the course of the last year.

Video games tax relief allows developers or other games firms to claim back up to 20% of their production costs if the project meets certain conditions. Altara Games' Ella Romanos shared her advice on how to make the most of them earlier this year.

Source: https://www.gamesindustry.biz/articles/2017-11-02-uk-games-tax-relief-extended-to-2023

France has it too:

The French government has announced a relaxation of the restriction on applying for cultural tax breaks for games, opening the programme up in three important new ways.

Firstly, games aimed at an adult audience, and rated 18 by PEGI as a result, are now encouraged to apply, whereas previously they were automatically disqualified. Restrictions on the levels of violence in the content still apply, but this will be less stringently applied than for prior applications. This ruling has been retroactively applied to all spending made in 2014.

Tax credits were introduced for the French games industry in 2007, and were expected to cut as much as 20 per cent of the costs for game production within the country. When those initial breaks were deemed insufficient, campaigning began to make the extensions announced today.

Source: https://www.gamesindustry.biz/articles/2015-06-25-france-reforms-cultural-tax-breaks-for-games

Bhonar · Feb 19, 2018

ragingbegal said:
If enlarging the studio is economicly viable then they should do it without tax breaks. If it's not then perhaps it's a poor business proposal. The public shouldn't subsidize businesses.

There's a difference between tax breaks versus actually being given subsidies.

(I'm not sure exactly what Ubisoft is asking for, just making a general statement)

Kimura · Feb 19, 2018

Nirolak said:
...They overwhelmingly do set up in other countries. Ubisoft Montreal has over 3000 employees.

Similarly, they set up a studio to grow to 800+ people in Toronto when they received tax breaks there too.

Even in Europe, just a few months ago they announced they're hiring 300+ new people in Sweden on top of the 400 they already have there.

What does that have to do with paying your taxes? If anything- That's all the more reasons to pay. It's insulting for a successful corporation like Ubisoft to act like they cannot afford it. It's straight up greed and disrespect.

Soony Xbone Uhh · Feb 19, 2018

Dingens said:
Dear Berlin, please don't bow to this sort of blackmail, tell them to go fuck themselves, and give the tax breaks to start-up/indie developers instead.

Yeah treat an established and a new company totally different.
Anyway Berlin is poor so it would not make any dent.
Article didn't mention tho, if they want a local, state or federal tax break.

voice of the cacti · Feb 19, 2018

Ubisoft does not need tax breaks. They should apply for grant funds like everyone else if additional money is so necessary for expansion in Berlin.

This happens all the time in the US. Amazon especially is a good example of a large multinational corporation that builds distribution centers once local jurisdictions agree to offer tax breaks. Neither Amazon nor Ubisoft need it to expand they're just looking to make as big a profit as possible at the expense of anything else.

tyfon · Feb 19, 2018

Nirolak said:
They assuredly want what the UK has, which the European Commission just extended:

Source: https://www.gamesindustry.biz/articles/2017-11-02-uk-games-tax-relief-extended-to-2023

France has it too:

Source: https://www.gamesindustry.biz/articles/2015-06-25-france-reforms-cultural-tax-breaks-for-games

Yes, this is a bit different and many countries have that in place especially for start-ups, including my own which is outside of the EU but not really outside (Norway).
From the OP I figured they were asking for a general tax break.

There are conditions though to what is allowed and what is not and you have to apply for it on a case by case basis.

ragingbegal · Feb 19, 2018

Bhonar said:
There's a difference between tax breaks versus actually being given subsidies.

(I'm not sure exactly what Ubisoft is asking for, just making a general statement)

A tax break is a subsidy. If Ubisoft wants to expand its Berlin studio because Berlin has the infrastructure (and surrounding workforce) required to support its business then it should pay fairly for the upkeep of that infrastructure just like everyone else. A tax break will decrease its contribution to public services which will have to be made up for by other taxpayers and businesses.

DoggosPuppersWoofers · Feb 19, 2018

ItWasMeantToBe19 said:
lol fuck off Ubisoft, why the fuck should Germany subsidize AAA video games.

Because the German game industry is in shambles. Completely and utterly devastated. If Germany wants to become an important player in culture exports, it should help.

Nirolak · Feb 19, 2018

ItWasMeantToBe19 said:
lol fuck off Ubisoft, why the fuck should Germany subsidize AAA video games.

Kimura said:
What does that have to do with paying your taxes? If anything- That's all the more reasons to pay. It's insulting for a successful corporation like Ubisoft to act like they cannot afford it. It's straight up greed and disrespect.

The straightforward argument is that the UK and France already do this, as do outside nations like Canada and the US, which has caused there to be very few German developers in comparison.

Germany actually has a film fund toward this end, so it's not like this is without precedent.

ItWasMeantToBe19 · Feb 19, 2018

Nirolak said:
The straightforward argument is that the UK and France already do this, as do outside nations like Canada and the US, which has caused there to be very few German developers in comparison.

Germany actually has a film fund toward this end, so it's not like this is without precedent.

Canada and the US should not do this and these cross national bribes are stupid as fuck in general and in a perfect world would be banned.

But in this imperfect world, it's not like software developers are going to be struggling for jobs in Germany even without video games.

Humam · Feb 19, 2018

Damn ...Ubisoft buys and sets up so many new studios each year, they keep on growing.

Kaxi · Feb 19, 2018

I don't think asking for tax breaks in the biggest European economy is fair. It's a bit like a blackmail (give us tax breaks or we won't hire people). If your business needs tax breaks in normal circumstances to be profitable, it's not a good business.

X1 Two · Feb 19, 2018

Nirolak said:
The straightforward argument is that the UK and France already do this, as do outside nations like Canada and the US, which has caused there to be very few German developers in comparison.

Germany actually has a film fund toward this end, so it's not like this is without precedent.

It's right there though that they want to attract Eastern European devs to Berlin, not German devs. The reason why there are few German devs in gaming industry is because it pays worse than pretty much every other IT job and has worse hours as well. You'd be stupid to enter the gaming industry as an employee here, when you can easily make double the money in any IT enterprise, even medium sized ones. Which is the whole reason why they want to attract Eastern European devs, because those still think that gaming industry jobs are ok paid and worth it.

Hopping_Mad · Feb 19, 2018

Nirolak said:
...They overwhelmingly do set up in other countries. Ubisoft Montreal has over 3000 employees.

Similarly, they set up a studio to grow to 800+ people in Toronto when they received tax breaks there too.

Even in Europe, just a few months ago they announced they're hiring 300+ new people in Sweden on top of the 400 they already have there.

Quebec is incredibly crooked with the amount of tax breaks they give out, basically at the expense at the rest of canada.

How about giant corporations pay their taxes instead of always grtting government handouts?

Nirolak · Feb 19, 2018

ItWasMeantToBe19 said:
Canada and the US should not do this and these cross national bribes are stupid as fuck in general and in a perfect world would be banned.

But in this imperfect world, it's not like software developers are going to be struggling for jobs in Germany even without video games.

The reason they're doing the push now is that Angela Merkel has been repeatedly talking about the German need for digitilization, and also showed up at Gamescom this year for the first time, which most took as a sign that she was interested in growing the German games industry.

For example:

Angela Merkel said Wednesday that Germany needed to modernize and embrace the "digitalization" of its society and economy, no matter how disruptive such technological change might be.

The German chancellor said otherwise the country risked getting left behind.

"We have sound finances and made good progress in digitalization, but let me be very clear — we are not leading the way in other areas of the digital world," she told an audience at the World Economic Forum (WEF) in Davos, Switzerland.

"We are not leading in other areas of the digital world, for example, society and the state," she added.

"So the next few years to come will have to be under the heading of bringing digital into our education system, the state needs to be digital, people have to be able to communicate with their state representatives through digital and a better ecosystem for start-ups has to be created so that we can be a cradle of innovation."

https://www.cnbc.com/2018/01/24/ger...ize-and-embrace-digitization-merkel-says.html

There's more at the link, but that last line in particular is what is triggering pushes like this.

ItWasMeantToBe19 · Feb 19, 2018

Nirolak said:
The reason they're doing the push now is that Angela Merkel has been repeatedly talking about the German need for digitilization, and also showed up at Gamescom this year for the first time, which most took as a sign that she was interested in growing the German games industry.

For example:

There's more at the link, but that last line in particular is what is triggering pushes like this.

I'm arguing that Germany should not do this, I don't know politically whether or not they will. But subsidizing AAA video games is just stupid economics.

X1 Two · Feb 19, 2018

Nirolak said:
There's more at the link, but that last line in particular is what is triggering pushes like this.

For starters: Merkel was at Gamescom because it was election year and she wanted to get young voters. That's it. The other thing is out of context. What she wants is that Europe has its own Facebook and Google. Like China has Tencent and Alibaba and others. Not that she wants to push the gaming industry.

Bhonar · Feb 19, 2018

Kaxi said:
I don't think asking for tax breaks in the biggest European economy is fair. It's a bit like a blackmail (give us tax breaks or we won't hire people).

I cannot relate to those of you who think this way, but I guess that's why there are conservatives vs liberals vs moderates in the world.

There is absolutely nothing wrong with Ubisoft just asking for this. And Germany has the full right to say no, which there's nothing wrong with either. That's how business works -- you ask and negotiate on two sides.

And if Germany says no, then Ubisoft has the full right to not open a business either. They cannot be forced to. That is not blackmail, that is business and they are even being open about it.

X1 Two · Feb 19, 2018

Bhonar said:
And if Germany says no, then Ubisoft has the full right to not open a business either. They cannot be forced to. That is not blackmail, that is business and they are even being open about it.

The blackmail part starts at making it public. If they just wanted to talk about it they could do so and not take it to the press.

Deleted member 24550 · Feb 19, 2018

Those tax breaks are major bullshit. UK and France should be fined for illegal state help, not new ones started for Germany (and don't get me started on Canada, they did a real disservice to game developers everywhere). The game industry is not an ailing industry, and global AAA mush is not a cultural product.

Bhonar · Feb 19, 2018

X1 Two said:
The blackmail part starts at making it public. If they just wanted to talk about it they could do so and not take it to the press.

That is not technically illegal blackmail. You can have your own personal opinion on the subject, but that does not actually make it blackmail in court-of-law.

I work in real-estate development and this kind of business/negotiation happens all the time with Cities.

Evolution of Metal · Feb 19, 2018

Kimura said:
What does that have to do with paying your taxes? If anything- That's all the more reasons to pay. It's insulting for a successful corporation like Ubisoft to act like they cannot afford it. It's straight up greed and disrespect.

The country which offers the best business initiatives gets the businesses. It is better to collect a smaller amount of taxes than none at all.

UK and Canada lured so many developers because of their tax breaks and initiatives.

ragnarok21 · Feb 19, 2018

Giving money to culture sounds nice but there is no limit on what is culture and it can quickly become something expensive for a country.

Germany, with a budget surplus, could do these things but in the rest of Europe we have to be careful. Although maybe Germany has surplus because they don't do these things...

Cranston · Feb 19, 2018

Outrageous. I suggest we write a letter to the EU, care of Mr Jean Claude Juncker. He doesn't stand for this. The fact that under his premiership Luxembourg became the largest centre of corporate tax avoidance is entirely besides the point.

X1 Two · Feb 19, 2018

Bhonar said:
That is not technically illegal blackmail. You can have your own personal opinion on the subject, but that does not actually make it blackmail in court-of-law.

I work in real-estate development and this kind of business/negotiation happens all the time with Cities.

Yes, it's not blackmail in legal terms. But it is still disgusting to say "We would need more people and we would hire them but only if we don't have to pay taxes". I mean sure, they can do that. And we can tell them they can have their tax breaks but we will charge them seperately for using our roads to get there. And for using our electricity and anything else. Or we just tell them to take their shitty practices to Canada or the UK. Again, tax breaks make sense to get work to places where there aren't a lot of jobs. Berlin? Not so much. If a job can only exist because of tax cuts that job is not worth anything to society.

SageShinigami · Feb 19, 2018

So the 20 percent break they're talking about...is that for cultural works besides video games and they want to convince Germany to do it for games too? If so, that's not a big issue. It would only become such if they got like Americans do, where jobs are just shuffled around and there aren't that many new jobs coming. Like, they're talking about making a 200 person studio without the breaks it sounds. And they want to expand to far bigger if they get them.

In America, sometimes the breaks create less than a dozen jobs max.

Patrick Bateman · Feb 19, 2018

Na, fuck that. I don't want to pay for Ubisoft's constant stream of bland cookie cutter games with my taxes.

Bhonar · Feb 19, 2018

X1 Two said:
Yes, it's not blackmail in legal terms. But it is still disgusting to say "We would need more people and we would hire them but only if we don't have to pay taxes". I mean sure, they can do that.

And we can tell them they can have their tax breaks but we will charge them seperately for using our roads to get there. And for using our electricity and anything else. Or we just tell them to take their shitty practices to Canada or the UK.

Again, tax breaks make sense to get work to places where there aren't a lot of jobs. Berlin? Not so much. If a job can only exist because of tax cuts that job is not worth anything to society.

Or, the German government can say yes. That's another option.

I'm assuming you don't officially speak for the German govt yourself.

(I have no idea which way the German govt is leaning, I'm just detailing out the different scenarios.)

Ubisoft wants to make gigantic Berlin AAA console studio if given tax breaks

use of an alt account

User requested account closure

Circumventing ban with an alt account

User requested account closure

Attempted to circumvent ban with alt account

Self-Requested Ban

User banned for use of alt account

Ac