A fifth of all video games companies in the UK have lost staff to jobs overseas in the past year.

That’s one of the most concerning findings from a comprehensive overview of the industry conduced by trade association Tiga.

The report was based on anonymous survey answers from 78 UKbased game development businesses, about a third of which were based in the South East.

Out of the 23% who said they had lost at least one staff member overseas, nearly three-quarters (72%) said those people had gone to work in Canada, where the government gives generous tax relief to companies making video games.

This has prompted renewed calls for the coalition government to introduce similar measures in the UK.

After years of lobbying from Tiga, the previous Labour administration actually agreed to offer themulti-billion pound sector a deal but Chancellor George Osborne cancelled the measure in his emergency Budget.

Responding to the report’s findings, AndrewEades, executive director of Brighton-based Relentless Software, said: “It is hard to retain our best talent in the UK. The tax breaks which exist in other territories, particularly Canada, allowcompanies in those locations to pay much higher salaries and offer benefits that we simply cannot match.

“This is a huge problem for an industry like ours which is knowledge- intensive and highly creative.”

The sheer expense of creating a video game makes the hunt for skilled staff vitally important.

According to Tiga’s report, it cost an average of £570,800 to develop a game over the past year, though this figure leaps to £3 million for studios owned by publishers.

Phil Jones, chief executive of Wired Sussex, the support organisation for digital media, said: “You need very skilled people to help derisk the investment. The industry in Brighton is still strong but we could lose our competitive advantage in the international market if we do not get a level playing field.”

Mr Jones recently met with Mike Weatherley, MP for Hove and Portslade, to outline the importance of video games to the city’s economy.

Mr Weatherley has told The Argus he intends to lobby the Department of Media, Culture and Sport about the introduction of tax relief and will raise the matter in Parliament.

But he admitted that even if he is successful the change will not happen for a while as the coalition is concentrating in helping small business generally with tax relief and not specific sectors.

He said: “It was a shame we had to take out the tax break but the blame for that lies with Labour. I will look to get it reinstated at the first available opportunity. We will balance the books this term in Parliament and once that is done we will look at things like tax relief. We could be looking at sometime between next March and the end of the term.”

The Tiga report also details the scale of the video games industry.

In 2008, there were 9,860 development staff working in the UK, with 4,350 working for in-house, publisher owned studios and 4,150 in 166 independent studios and 550 in related companies.

Additionally, an estimated 800 freelancers were working in active development roles. Almost half (45%) of the firms surveyed were “micro firms” with one to ten employees, 27% were small firms with 11-49, 18% were medium-sized enterprises (50-249 staff) and9%were large firms with 250 or more staff.

The average turnover of independent development studios was £3,130,600 while the equivalent figures for a publisher-owned studio was £15,500,000.

To buy a copy of the report, visit www.tiga.org.