TheGamingEconomy’s Daily Digest brings you the prevalent business stories in gaming. In today’s news: UK trade bodies respond to immigration proposals; Animoca Brands reports AUD$25.1m (£12.7m) receipts from customers; Barclays to offer VGTR loans; and Ubisoft acquires Kolibri Games.
UK trade bodies respond to immigration proposals
Video game industry bodies The Association for UK Interactive Entertainment (UKIE) and The Independent Game Developers' Association (TIGA) has issued responses to the report released by the Migration Advisory Committee (MAC) examining the potential implementation of a points-based immigration system for the UK following its exit from the European Union. Despite expectations that the current salary threshold of £30,000 Tier 2 General visas for skilled workers would be scrapped in its entirety, it has simply been reduced to £25,600. There will also be no variation in salary thresholds between different UK regions, which would have led to an increase for London salaries and a minor decrease in remuneration thresholds outside of the capital. MAC has also mooted industry-specific visas for STEM and creative sectors.
UKIE have responded positively to the reduction in salary thresholds, while echoing MAC statements that the points-based system could end up being "cosmetic", with little to no tangible effect on the games industry post-Brexit. Dr Jo Twist OBE, CEO of UKIE, said in a statement, "A reduction in the salary threshold would be great for the games industry. The UK's thriving games scene continues to benefit from the valuable contribution made by international talent and we support this positive suggestion."
Meanwhile, TIGA has welcomed the possibility of a tradeable points system which could benefit STEM and creative industries, including gaming, while also approving of MAC's suggested reduction in Tier 2 salary thresholds. In response to the proposals, Dr Richard Wilson, OBE, CEO of Tiga, said, "TIGA welcomes the attention given to sector-specific needs for the STEM and creative industries in the MAC’s report and the recommendation for sector-specific visas for these industries. The MAC’s proposal that the existing framework for Tier 2 (General) visas should remain as an employer-sponsored route and should be retained with a salary threshold expanded to include medium and highly skilled workers, could help to ensure that the video games industry can still access the highly skilled developers that it needs post-Brexit. The UK video games industry is a creative, high technology, high skills, export focused industry. It is essential that the sector can access the best global talent so that it can continue to contribute to the success of the UK economy.”
Animoca Brands reports AUD$25.1m (£12.7m) receipts from customers
Animoca Brands has released its financial results for Q4 2019, with quarterly revenue of AUD$10.1m (£5.1m) contributing to final year sales of AUD$25.1m (£12.7m). From this, the Hong-Kong based developer-publisher realised a net cash loss of AUD$5.1m (£2.6m), which has been attributed to one-off expenses related to its series of investments and acquisitions over the course of 2019, including Leade.rs Inc., Stryking Entertainment GmbH, Gamma Innovations Inc., Skytree Digital Limited, and nWay, Inc. The company has also altered its accounting practices in conjunction with its auditor, leading to a AUD$5.6m sum of unearned revenue now being attributed to receipts from customers, with related expenditure now being classified under corporate costs.
Speaking exclusively to TheGamingEconomy prior to the financial release, Animoca Brands' founder and non-executive chairman Yat Siu spoke on the company's strategy for 2020, with the firm continuing to develop its blockchain technology and use of non-fungible tokens, "I believe this will be the year where companies like Animoca Brands and others, for whom the business of making games is their bread and butter, will integrate blockchain technology in mainstream games. Therefore the first wave of real adoption will happen for people who do not have blockchain today. Out of those who play blockchain games at this moment in time, I would say 99% of them are people who already understand blockchain, have a wallet, probably own some Bitcoins or other digital currency. Whereas I think this year we’re going to get a large wave of users that move on to blockchain because they want to play a particular game, not because they specifically set out to own digital currency."
Barclays to offer VGTR loans
UK bank Barclays is offering loans offset against Video Games Tax Relief (VGTR) payments, reportedly making it the first high-street lender to offer such funding. Under the terms of the loan, Barclays will offer 90% of the total tax credit on production of a VGTR approval certificate from the British Film Institute (BFI), along with assurance documents from the developer and its accountant(s). The product has been designed to alleviate studio cash flow concerns, with the loan payable immediately as opposed to traditional VGTR payments from HMRC, which typically take between six and eight weeks to process.
Speaking to GamesIndustry.biz, Gavin Smith, relationship director for technology and media, Barclays Business Banking, said, "The government has introduced tax credits for producers to encourage them to create and publish their games in the UK, and our loan acts as an advance on these credits, helping with vital cash flow in the early stages of a game's development."
Ubisoft acquires Kolibri Games
Ubisoft has announced the acquisition of 75% of mobile free-to-play developer Kolibri Games, with the option to raise its stake to 100% over the course of the next four years. Kolibri Games, a Berlin-based studio, specialises in the idle/incremental games sector, most notably with its Idle Miner Tycoon title which has accumulated 104 million downloads since its launch in 2016. The acquisition marks the second-such entry by Ubisoft into the incremental games space, having acquired a 70% stake (option to increase to 100%) in Paris-based Green Panda in August last year.
In a statement announcing the acquisition, Jean-Michel Detcoc, executive director of Ubisoft Mobile, said, "We are strengthening our ‘idle’ games portfolio with the acquisition of Kolibri Games, one of the leaders in the segment, whose flagship game Idle Miner Tycoon has grown steadily since 2016. We are delighted that this great talented team, recognised for the longevity of their flagship title, is joining Ubisoft.”