Malta Game Development An Overview by Nick Porsche

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BENEFITS

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Malta: Locational Benefits

• Member of the European Union & Euro Zone

• Proven base for international gaming companies

• Europe’s foremost regulated online jurisdiction

• Very good ICT infrastructure

• Highly advantageous tax system

• Very attractive working and living conditions

• Low wages and non-wage labour costs

• English official national language

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The Maltese Tax System

• Full Imputation System approved by the EU

• Maltese corporate income is taxed regularly at 35%, but… • Tax advantage occurs on

shareholder level • Dividend is paid out to non

resident shareholder (can also be a holding company)

• Non-resident shareholder is eligible for 6/7 tax refund, effectively resulting in corporate tax of 5%

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Full Imputation System Diagram

International Investor, Publisher or Licensor

Game Development Ltd.

Game Dev. HoldCo

Maltese Financial Authorities

Live Game(s)

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Malta

EU/Non EU

Business Incentive List

Tax Benefits:

• 5% Full Imputation Tax System for intl. Investors - ongoing

• 15% flat tax for intl. games experts (title list) – 2012

• var.% tax benefits (R&D, IP, job creation, etc)

• var. % for MicroInvest program (ends 31 Dec. 2011)

• 25k/€ tax benefit for Create program

• 15k/€ tax benefit for educational or promotional digital games

Grants: • EUREKA (research based) • ERDF (research and

development) Funds: • Malta Games Fund worth

150kpA/€ Loans: • JEREMIE (Joint European

Resources for Micro to Medium Enterprises)

• Soft loans (Malta Enterprise due diligence, norm. 33% max. 75% of cost)

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DEVELOPER ENVIRONMENT

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Gaming Companies

• TRC Family Entertainment

• Bigpoint International

• AV Technologies

• Rocksolid Games (in founding)

• Gameforge (non-op)

• King.com

… and several games related experts and student activities

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Game Development Education

• University of Malta

• St. Martins Institute of IT

• Holistic Courses

• STC IT-College Pembroke (starting 2012)

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Student Competitions

• Gamezing – University of Malta, Malta Council of Science and Technology, Malta Enterprise, St Martin’s Institute of IT

• GameDev Challenge - St Martin’s Institute of IT

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Game Conventions

• Digital Games Malta Conventions

• Chinajoy (Malta Enterprise presence)

• GC Cologne (Malta Enterprise presence)

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Gaming Associated Organizations

• University Malta

• Malta Enterprise

• Finance Ministry

• Banking Sector

• European Union

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Future Challenges

• Reclaiming “gaming” terminology from gambling industry

• Bundling subsidies and incentives (spread out over departments and organizations)

• Building up a local expert resource pool

• Forming digital games lobby

• Press work and public information (putting Malta on the international Gaming map)

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BUSINESS MODELS

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Local Development

• Development team located in Malta • Team sizes small to medium (1-100+) • Product sold / licensed to intl. games publishers • Digital self-publishing • Most probable types and genres: • Browser-based games (MMO’s, Social, etc.) • Digitally distributed games (App Store, Client etc.) • Skill games (Freemium/”Gambling” hybrids) • Serious games (Gamification)

• Pros: Low costs, low tax, EU legislation • Cons: Local talent pool

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International Licensing

• Licensing contracts run through Malta Ltd.

• Business Development installed in Malta (tbd)

• Licensed product sold/sub licensed to intl. publisher

• Maximize profit through reduced taxes

• Pros: Low costs, low tax, EU legislation

• Cons: Off the map, travel costs/time

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Live Game Maintenance

• Live game sold/moved to Malta

• Project management installed in Malta

• Live development installed in Malta

• Benefit from low personnel costs and expenses

• Pros: Low costs, EU legislation, low tax

• Cons: Local talent pool

• Attention: taxes for the sale apply in country

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Distributed Development

• Development contracts run through Malta Ltd.

• Project management run from Malta

• Work with international work for hire teams

• Benefit from low international development costs

• Pros: Low costs, low tax, EU legislation

• Cons: Local talent pool, travel costs/time

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External Services

• Service teams located in Malta

• Staff sizes small to large

• Services sold / to local and intl. game developers

• Most probable services:

• Quality Assurance / Testing

• Community Management / Games Mastering

• Localization / Translation

• Market Research and Analysis

• Pros: Low costs, low tax, EU legislation

• Cons: Connection to international dev/publishers

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Questions?

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