Zero Tax + Incentives: Turkiye's Bold Leap Into Game Development. Tuğbek Ölek, Games, Turkiye.

[Music] [Applause] [Music] we're going to talk about territory which I don't think gets enough uh credit uh that has made some significant impacts in terms of gaming you just have to look at people like Pete games and Graham games and the impact that they had in a mobile space and we're talking about turkey and here we have um to from Turkey Convoy delegation who is going to talk to us about zero tax and incentives the turkey's bold leap into game development over to you thank you hi everyone uh in any conference

most boring topic is taxes uh but the most fun is not taxes so I will try to keep it as fun as simple and as short as possible I'd like to answer questions for the details I'm not going to go into any details I just have a very short presentation and afterwards we can talk about it because uh for me more than the details of how no text works what's important is what will be the impact for the Turkish game industry but also in the global because right now the how the Turkish government supports game development in G gaming Studios I believe will make uh some impact especially in Europe but in global uh overall so to keep it short I will just go to key takeaways this is the if you want to take anything from the stock this is it if is turkey TX

free for gaming Studios yes absolutely in Turkey game studios are not text right now there are some technicalities there's maybe some small taxes that you still need to pay but in general we don't have tax for game development our designers and developers working in those studios are exemp to to a General Degree yes they don't pay income taxes too so if you're a game developer and working on Studio you don't pay taxes to uh as investing in game development in Turkey is taxfree yes because turkey doesn't have a capital gain tax so let's say you build a studio is successful you do a $10 million exit you take $10 million in most countries you usually get get half of it but in Turkey there's no capital gain uh taxes is there any catch no you don't have to pledge the

flag marry a Turkish person do anything weird your money is not kept there you don't need need to do anything weird that you don't do any country you go you do your business and that there's no uh strings attached to it it's just there and is there a talent in Turkey is there game industry turkey yes very much it's very vibrant and actually if it goes like that it will be very dominating especially in Europe so I know that it sounds a little bit too good to be true but believe me it's even better than that it's crazy good right now especially uh even though there are no taxes having still incentives which are unparallel when compared to other countries I think is the key here because taxes you pay only

when you make money but even if you're are a struggling n Studio you get so much incentives for example right now we are here with uh 14 Studios uh and or delegation is organized by Turkish game developers Association uh B and cyer bu and uh Turkish uh Ministry of trade and they are here to to prove that and uh or Studio videos only pay 20% of their expenses 80% of their expenses are covered by the trade Ministry supported by the trade Ministry so we can come to GDC stronger and stronger every year also they pay for salaries of developers health insurance of developers they pay store commissions which is crazy Apple takes 30% Turkish government pays 15% back I've never heard such an incentive anywhere of course there are limitations

it's not unlimited money but in general I think what's also very striking is it's very easy to get it's not like incentives in Germany or UK you have to struggle with the paperwork for months most of the incentives are a single sheet of paper and you usually get paid in three to six months uh sometimes it gets slow but it it's not that horrible to use those incentives uh before you think that I'm selling snake oil a little bit about myself I'm in the business since uh 97 uh but I'm not old I started very early uh I'm the longest serving game journalist in turkey and actually the second person is my wife she's here also but she started one day later so by one day I'm the all the serving game journalist uh I did the most of the

Esports in Turkey for 12 years uh I quit that I don't I don't like that much anymore uh I started my company together with my wife uh set media which is the biggest PRM marketing agency in Turkey Mina we are not going to talk about Mina here but if you have questions you can reach out uh also I'm trying to do networking representation for the uh Turkish game industry I'm the head of Advisory board on our developers Association I represent the industry in uh creative Industries Council of turkey which is the main umbrella organization that represents all the creative Industries and I do architecture as a hobby okay so let's talk about before I I just have two more slides but I think this is important how big is the industry I said there are talents but what's really happening in the country this is from startup watch they are doing a very good job tracking all the startups invest exact where in Turkey so

if you want to have an idea about the Turkish game Market this is the most reliable source because we don't have very strong researches or Market uh analyzes so far uh so there are two sources when it comes to Turkey I believe in one is our national statistic Institute uh which is uh usually in Turkish and uh startup watch right now according to Startup watch this is February data there is 785 studios in Turkey uh alive Studios uh there were 921 formed but some died of course but I think this number is conservative because it just tracks startups these are the startups but it doesn't include the established ones it doesn't include the older Studios so I believe the it's missing around 10% and the real number is around 850 uh this number is not that small when you consider especially these are concent ated around 50% in Istanbul and

around 25 30% in Ankara which makes those two cities real game development powerhouses right now Istanbul is the second city with most Studios right after London and Ankara is the fourth right after Paris so we have two uh cities in Europe uh in top five and uh what's also interesting is that having just Studios and the incentives are enough you you need a ecosystem around it these all happened in a recent years it's it's a development that started 10 years ago especially with the uh forming of Turkish game developers Association and the first incentive starting with our trade Ministry but it got really fast in the last five years so ecosystem is growing up so we are missing some stuff for example we don't have too many game development events or game development

media is very weak but two things we have very good is one is incubators accelerators and clusters right now there is uh 35 institutions that an game developer can go to get help and some of them are very strong and supported by government so there is no strings attached again if you go to incubation government supported incubation you they don't get your shares or anything they don't ask you uh very hard conditions there is some private ones do that but there is very really strong institutions that you can get very good support uh by giving back nothing uh also another important thing is investment scenes the you see the most active gaming investors in 2023 all of them are Turkish investors these are not foreign investment I believe in 2023 that all the Global Investors gave up on gaming they moved on they scared

away they scare away too easily I don't know why $2 billion doll down in the market size makes them crazy we still make around $200 billion do but investors go away but the Turkish investors continue supporting the Turkish uh developers and one of the reasons is all those support that or startups or studios are getting because if any startup is getting lots of investment and and paying no taxes why wouldn't you be investing on it you have very low risk all those invest Investments uh coming with the support of the uh no tax and incentive policies and also uh we have right now 47 University programs that are uh focused on design game development and design programs some of them are really new so they haven't really started Ed uh getting their students but

there are around 2,000 students more than 2,000 students right now getting ready to join to Workforce in Turkey uh with our developers from uh game design programs actually but actually the mo the main source of uh talent for us is not game development and game design programs more uh on the Computer Sciences uh software development programs like the regular ones so uh as as you could see that all those supports and incentives we've been getting and I can say that last 10 years Turkish game developers were getting the most support from a government there were some uh ups and downs sometimes the system cloged sometimes system didn't work great but in paper we always had the most best incentives it bloomed the industry and we became one of the strongest probably in top three top five

that we need to I don't want to be likeing uh assuming more than it is uh game development uh countries in Europe and probably we will get into top five in Globe uh in a few years so in the last slide I will tell you a little bit about the incentives we are getting uh as I said we can uh categorize them in three parts uh one of them is uh you get 50% of uh gross salaries uh of your two developers uh this is the hardest ER one to get because for that you have to create first your project apply get your application improved and then uh hire people so it's not used much but it's there uh you get uh 50 per 50k uh support from software and licenses by

the way the numbers are around estimates because uh since the supports are in uh Turkish L it changes with the uh valuation of the L uh so any license you get including game engines uh government pays 50% of it up to 50K per game uh also your uh so 50% of uh social Securities of your stuff is paid uh this is uh coming from Ministry of Industry uh and this and also nox policy requires you to be a part of one of the technoparks in Turkey but uh since co uh you can do it remotely you don't have to have your office in techn Parks you can still get it and there is various R&D funds uh that you can use that I don't need to get into uh in

Market entry the biggest part is for uh your marketing localization all kind of things you need to go into a market so if you want to tap into any market and you have to spend money you you want to acquire American users uh and you need to run some performance sets government pays up to 60 70% of it so user acquisition costs are very low for us actually it's half what other Studios pay of course there's a cap there's amount that it's uh gets uh cut it's 300,000 to $500,000 you can use per game but when you if you have a studio with a few good mobile games that are making money then you can easily get a million dollar in uh marketing uh support and it lows lowers your acquisition cost so when testing your game when starting up a game it's a very

good boost because you can enjoy the low acquisition until you hit the quotas and it gives your game much more chance to uh maybe along the way work on the retentions and all the M monetization stuff also for the events as I said that uh government pays 50% usually but if you're coming with a techn park like uh we came with be cyber park today it pays 80% % and most of those are coming from the ministry of trade and through Turkish uh exporters counil uh so it's very streamlined and last one as I said that uh platform commissions all of it steam Android iOS any platform commission also physical distribution if you are publisher Distributing physically and getting a cut government pays back up to 100K around uh for a

game so these are the incentives and that's my whole thing and uh as I said that I think that will have impact everywhere because uh I can say that all other European countries are showing turkey as an example to their governments to say that hey Turkish guys are getting that much support what are we doing thank you very much um I find this interesting because I mean for turkey and also for other territories there seems to be a uh a growing understanding of the role that games industry has in terms of Economic Development uh I mean is that the kind of motivation that's going on here is it that turkey has understood this yes of course because what's makes gaming Special by the way turkey is not a really a tax Heaven turkey is very heavily taxed I think our taxing level are not much different than

any other European Union uh country but for gaming it's a very special thing because whatever we produce we export it it's 95% export it doesn't go into uh back into our own economy so when they not tax gaming and boost the gaming we are get actually getting money and in the end this money goes into system anyway because you make money you you buy a house you buy a car you start spending on this money and in personal level you start paying V the studios don't pay V they are V exempt but you buy yourself a new guitar and you pay tax and money goes into the system and when you think about if we tax those uh Industries also some of it also through for app development too for other Tech Industries so if if we had TX them like we Tex other Industries those people will just go you you cannot keep keep a game developer in your country if you

are heavily taxing them they will just run away because there is other lower tax Alternatives Global industry is yeah so I I don't understand why anyone would ever text a game development company I I I like that idea although there's a bit of keynesianism in there as well which also makes me happy sorry I get deeply political don't let me uh anyone else got any questions uh oh oh oh Chris go on then Chris I think um oh you're C com so um this is all great for games companies what about media and events businesses so what about gab Jason businesses I I mean obviously slightly flippant but is if you're like a game Service Company or you know or a media company is there is it is it just game production or is it is it related it it is research development and design for example I I don't use any of those I'm a PR Company I use zero incentives I pay very heavy taxes I'm not happy uh I'm happy for my

friends outage I do fair enough so I got to try and work out if I move my uh my new tech business into uh out of Scotland into turkey that's a different subject oh we got another question over here sorry sounds good I'm ready to move um does this apply to if you're working over here and you want to Outsource development to a Turkish company is it apply at all or does it not apply is there any kind of uh engagement on that level so that that that there is a few things that created the situations right now that the incentives were there for a long time trade Ministry has been uh supporting a lot and then came the co and we get a uh permission to work remotely before that you have to be at techn Park and you have to sign in every day but because of that now companies can work remotely Does it include oversee workers uh I don't think it should but if it's applying I don't

know it's something that you need to discuss with the techn parks what is allowed what is not because uh in the end techn parks are uh allowing you in and in a way they are putting the rules together with the Ministries there uh but of course you should have your studio in turkey that's that's the rule uh but for example if you are getting Outsourcing done you can use incentives for the Outsourcing so there there's a uh benefit there they they are enjoying all those benefits for example if you are paying them they are not paying taxes yeah yeah if you you have to show that game is developed there if the game is

developed in Turkey then you can of course also publish it but publishing business is not involved so a publisher cannot enjoy those benefits only someone who also designed and developed it can publish it and enjoy it and on that note I'm going to have to say thank you very much yeah thank you so all all good stuff I think you know this is a an increasing topic and there are other territories also looking at these things so hearing what turkey to say has been fantastic for me [Music] [Applause] [Music]