As the world wraps up a challenging year, the belgian games industry continues to mature, but the industry’s future challenges are catching up with it rather quickly.
The latest Belgian Games Industry survey conducted between June and September 2020 offers insights into the state of the industry in Belgium, including the growth of game companies, concerns over stagnant full-time employment, scaling challenges for smaller companies, the need for bigger players to soften revenue blow, and opportunities for boosting investment and job creation.
The number of full-time employees (FTEs) in the belgian games industry suggests the industry is not growing as fast as the number of new game companies. Exponential growth of FTEs has been in decline for some years, but it’s the first time the numbers aren’t moving at all. The ecosystem still faces a high degree of brain drain from Belgian students to studios abroad or other, more stable industries, and it’s beginning to show. This proves more companies are working with fewer full-time staff than last year.
Challenges of Scaling for Smaller Companies
Over 84% of companies employ between 1-10 people, and as much as 25% are one-man shows. Dealing with high wage costs and limited budgets makes it difficult for Belgian game companies to properly scale. A small uptick is that 42% of companies expected to see their FTE count rise in 2020, and that 43% have been in business for more than 5 years. Yet, it seems clear that there’s a need for more support if we want to get another Belgian game company at the juggernaut level of Larian Studios.
Tax Shelter as Part of the Solution?
One interesting finding from the survey is that over half of the game companies surveyed are looking at tax shelter as a way to fund future projects. Tax shelter is a Belgian tax incentive that allows investors to receive a tax deduction on the amount they invest in a qualifying project, such as a video game. In recent years, tax shelter has become an increasingly important tool for game developers in Belgium to fund their projects.
However, despite its popularity, many game developers are still anxiously awaiting more news about tax shelter. In the survey, 44% of respondents said it was too early to tell if they would use tax shelter to fund future projects. This uncertainty is likely due to the fact that the Belgian government has not yet announced whether it will extend the tax shelter program beyond its current expiration date of December 31, 2021.
Given the challenges facing the Belgian game industry, extending tax shelter could be a critical step in supporting the growth and expansion of local game companies.
To support the growth and expansion of the Belgian game industry, it is clear that more support is needed. Tax shelter has become an increasingly important tool for game developers in Belgium to fund their projects, and extending the tax incentive could be a critical step in supporting the growth and expansion of local game companies. With the right support, the belgian games industry can continue to thrive and produce more hits that make a mark on the global stage.
The survey aimed at active game developer studios, publishers, game platforms/portals, service providers, schools/educational institutions that offer dedicated game education programs, research departments that study games, and game events, audio, acceleration, incubation companies with offices in Belgium and/or abroad.
Source: FLEGA
