Game devs react angrily to ESA’s support of government tax proposal

Last week, the Entertainment Software Association, the video game trade association you probably know best from its stewardship of E3, released a contentious statement praising the tax reform proposal currently before congress, claiming the bill will “energize tech sector innovation and economic opportunity. For the $30.4 billion US video game industry, which employs more than 220,000 people all across the United States, the pro-growth policies introduced will incentivize greater US investment and more high-quality American jobs.”

And while the large gaming publishers repped by the ESA might be comfy with that position, it didn’t go over well with actual game developers, including some MMO devs, who reacted loudly on twitter (twice) in rejecting the ESA’s position as being representative of or beneficial to workers.

“20 year game industry veteran here,” Riot’s Greg Street wrote (you’ll remember him from his tenure at Blizzard). “You don’t represent my views. Like at all.”

“14 years in the industry, 13 shipped games, and I’ve never given this joke of a company the right to speak for me,” posted Riot’s Jo Graylock. “Total garbage.”

Indeed, some argued it’s bad for gamers too. “While I believe @theESA wants to be a force for good, plan hurts future devs + Real growth comes from players’ ability to afford games,” Trion Worlds’ Scott Hartsman tweeted. “Not to mention that it’s also not current-dev friendly. Appears very anti-everyone-but-big-corp-owners. More than a bit mystified.”

As Gamasutra summarizes, the Tax Cuts and Jobs Act, if passed, would significantly reduce the corporate tax rate while also reducing or eliminating a multitude of tax breaks for future home owners, veterans, the chronically ill, and students. The publication also notes that corporations like game publishers would be under under no compulsion to spend their newfound savings improving wages and the working conditions of actual developers, generating industry stability, or creating new jobs. The proposal currently has just 35% popular support across the US.

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78 Comments on "Game devs react angrily to ESA’s support of government tax proposal"

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Jeff

/reads article….looks at comments thread….goes back to playing cuphead.

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Herro Mongorian

Good to know that affording a car, house, family, and a balanced lifestyle will soon be impossible for me. I’m sure life will be easy with those decisions already determined for me.

dixa
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dixa

lolwut? when in the history of this country has tax breaks for corporations led to them investing in more jobs and wage growth?

so many companies are reporting record profits right now! none are increasing wages. c’mon. it just doesn’t work that way. it will go to the shareholders and the board.

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mysecretid

Indeed. So-called “Trickle-down economics” have never worked, historically. As is their nature, profit-minded corporations keep the excess, and say “Ooh, look! Even more profit! Yay!”

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Squadron

So let me get this straight, Game Devs who rely on my disposable income to make their living are angry that I am getting a tax break. Money I could spend on their game because they are butt hurt that Corporations are getting a tax break also.
A corporation is in business to make money for its shareholders. If they can give a job to someone that’s a plus. They are under no requirement to hire anyone. If you don’t want to work for a Corp, go independent. Christ, what a group of self entitled whiny snots.
Jesus, I just teach economics and I know this.

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rogbarz

Why is Trion responding to this? They ruined gaming for plenty of people a few years ago with Archeage.

miol
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miol

;P

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Byórðæįr

So a veteran and business owner I can sum up the new tax act one sentence.

more money to be spent by everyone.

To break that down you to understand share holders often say you to set aside some part of the revenues aside. say the company makes a million dollars a year. Middle of the road company.

Their cost right now is likely 40%

so that million is cut into 10 equal sections of 100K.

four of those sections currently go to taxes to be spent how ever willynilly.

one of those section is held as reserves.

one of those as profit to be spent.

that leaves four sections or 400,000 dollars. that is their next years operating expenses.

now if the max is 25% they have 2.5 more sections to work with or 650,000.

Remember they made a million dollars in profit under the 40% they have less than half to work with.

So say they work in steel, and they budget 2 sections for buying steel. Say they made more profit than they expect and last year they bought four sections worth. this year with the cost of powdered steel costing roughly a hundred times as much 96 dollars for one foot by one foot by four inch thick piece of steel last year and 7500 dollars for the same metal plate this year. Demand went up and 300 dollars in tariffs on a pound of nails that have vanadium in them drove the cost skyward. So the company or corp that set aside twice as much steel at last year’s prices, this year was able to continue to do biz at last years costs. at four sections as tax they might simply had too many costs. so say they only bought two sections last year as they did not have that extra 1.5 that went to tax dollars and this year they have to fire people to buy the steel and they they have to train someone less skilled in the job because the person who was skilled was fired instead of reduced in paid since if they asked that person to take a cut in pay they will look for a job elsewhere screaming it is not fair that they had to take a pay cut. Smart biz has details up where the employees can see the projected numbers on a shared drive so if people worried they can quietly ask what is going on.

The tax document which is public. https://waysandmeans.house.gov/taxreform/
shows that instead of targeting special interest groups they are trying to lower everyone tax obligation.

So how does that really help? First when the company above which employes say a thousand people in an area instead of laying off those people and forcing them to compete for say that micky’ds job, they are maybe paying them more since they bought the steel last year because it was planning for having it on hand while they had the money and this year instead of selling their product at four hundred dollar a widget they slightly increase the cost knowing that people will figure out that in you pull it junk yards there is steel that can be sold to metal working companies that is cheaper than the Korean nails this year. Sure you have to clean and metal it to slag then to bar stock, but it is still cheaper. So that company now is paying slightly more for steel from someone melting down rusty cars then trading to a powdered metal company to get a discount on the cost of the powdered metal, so when it is all done and said their workers keep their jobs and are spending a bit more on food, clothing, maybe they put a down payment down on a new home, because their income is finally high enough the bank thinks that they are less of risk for that ten year arm.

End result smart people are going to have a lot more money, normal people who don’t do research are getting a higher standard deduction. Now the senate still has to have a go at it, and they may change the whole thing. Who knows but removing the loop holes is going to make more spent by the people earning and less by committees on congress.

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John Kiser

It is only a short term benefit and will lose the US trillions over the next 10 – 20 years. If you are only thinking short term it might be beneficial, but any economist is screaming their heads off at the long term ramifications of the current tax bill in place. It along with the healthcare bill to attempt to repeal Obama Care are both going to have long term negative consequences and will end up putting the US further into debt and that’s even with taking projected economic growth into account.

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emu_john

So he provides links and the math and your response is, i disagree and your source is “any economist.” I think any economist with an actual degree would agree with Byórðæįr. If you’re going to respond to a well written and thought out post then put in the same amount of effort to actually disprove him that he put in gathering evidence to support his point.

Tl:dr what you said essentially amounts to “I disagree some unnamed source says differently”

deekay_plus
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deekay_plus

don’t mind him he’s proven madman. thre’s not much more to it than that.

borghive
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borghive

Trickle down economics has been proven not to work.

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Byórðæįr

trickle down does not work. snicker what they are trying starts with remembering that income is only taxed once per person but every time it is spent it is taxed again. If you give a huge break only to one group, then every other group trying to take advantage of the boom is is worse shape. Where as if you give everyone a break on the taxes at the same time you get a dot com style bubble.

Now to prevent the bubble, people have to actually think at the larger income levels, how do I leverage this best, not oh go out and buy one expensive thing and park it in shed to collect rust. People at the lower income levels simply have to either work hard to take advantage of the more customers or hire more people.

In a bubble what usually happens is the first year everyone goes out buys something they have been wanting for a while, which drive up demand for those lux items. Now if they do nothing to replace the savings they are gaining as they spend the money you get a bubble bursting crash. Basically when the tax cuts go in you want to figure out what buying today will cost more in two years. You want to buy some of next years raw materials and the year after that are going to be more expensive, while you have the extra money. You want to buy that random thing before it gets expensive or wait five years. Smart people are trying to pay off every ouch of credit they have right now to be able to leverage the most just prior to the boom, so they can buy two of what they want and re-sell the second as the prices go up. Ideally they would invest in their biz instead by hiring on more people so that as the local areas biz increase they can take advantage of that and plan to expand based on profit margins getting bigger but it is longer term strategy and does not have the appeal factor of buying shiny toys. People have to make the choices they think are correct but some people from all walks of life if they plan correctly are going to make a lot of money in the short term and if everyone pays their taxes the it spins the hamster wheels faster and cuts likely can continue over the next twenty to twenty five year, potentially as low as ten percent flat tax. But if people all take short cuts it is like turkey day sales, everyone reaching for the 10 cent toy that is now 10 cents off blocks people from buy the 10 thousand dollar tv that is five thousand dollar cheaper.

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Utakata

“’20 year game industry veteran here,’ Riot’s Greg Street wrote (you’ll remember him from his tenure at Blizzard). ‘You don’t represent my views. Like at all.”’

Or tl,dr: Nerf it to the ground! <3

CMDR Crow
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CMDR Crow

It doesn’t really matter. The bill, like everything else, has no chance of passing. We’re really just all ticking down the days until resignation, legislature included.

That said, I had 10 apples and I gave 10 of them away to one person! Why are nine people mad to me? They all have an average of one apple! I was so generous giving away all ten apples!

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Ssiard

Actually it has a good chance of passing after setting the high tax bracket back to 2017 levels.

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Arktouros

The real trick is convincing 5 of those people that the other 4 who point out no one got any apples but one person are their enemy so they’ll support your decision to give all the apples to the 1 person.

Divide and Conquer.

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Ket Viliano

Bad Apples.

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Ssiard

*rolls eyes* cutting and simplifying taxes isn’t enough! You have to solve all the worlds problems with one bill! For the love.

The tax bill isn’t perfect but getting rid of all the loop hole laden deductions is a step in the right direction of ridding washing of back patting. Wish we could get rid of the property tax deduction too (even though it would screw me over). Stop the subsidizing of New York and California.

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Frank White

The Tax Policy Center – a nonpartisan think tank based in Washington D.C. – estimates that the top 1% will enjoy 80% of the benefits from Trump’s plan — while a third of middle-class taxpayers will be paying more in taxes by 2027.

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Ssiard

Your info is dated. The top tax bracket remains the same at 39.6% but less deductions.

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John Kiser

Not to mention that it will put the US further in the hole in the next 10 – 20 years debt wise. While it may spur some short term economic growth the amount it’ll hurt shit is staggering at the same time. If they want to fix tax loop holes just fix tax loop holes instead of giving a giant tax cut to the 1%

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Frank White

This is interesting too, if you have the patience to read through it all:

https://www.bloomberg.com/view/articles/2017-09-28/the-trump-tax-reform-s-pass-through-boondoggle