The European Commission has given France the go-ahead on a tax credit scheme aimed at helping its video games industry. Ubisoft must be giggling over the Christmas champagne.

To receive aid, however, games must meet the criteria of quality, originality and adding to cultural diversity. Something like the multicultural GTA IV, then?

The scheme will, in the words of the Commission, "enable video game manufacturers which are subject to taxation in France to deduct up to 20 per cent of the production costs of certain games".

It's taken over a year for the tax break to get passed, with the Commission the scheme due to fears that the initiative would be damaging to competition.

The competition commissioner, Neelie Kroes, has said, however, "The French authorities have made significant changes to the scheme so as to essentially target video games with cultural content and minimise possible distortions of competition in the European market."

The scheme has been authorised to run for four years - what happens in year five will be that all French video game makers will relocate to Estonia.

Margaret Hodge, the UK's Minister for Culture, Media & Sport, has said in the past that the UK government will not offer tax breaks to UK developers. Channel 4, however, claimed in October to have learned that, should the French initiative be successful, the UK government may take similar steps. Could government financial support be in the UK games industry's future? Answers in the Forum.

^{Source: Forbes}