

Rich Tax Breaks Bolster Makers of Video Games - ojbyrne
http://www.nytimes.com/2011/09/11/technology/rich-tax-breaks-bolster-video-game-makers.html

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TrevorBurnham
The article is a bit complicated, centering on an array of tax provisions that
favor EA, but there are some fascinating tidbits:

> In 1981, as Americans worried that Japan’s growing dominance in the auto
> business would be followed by a decline of the high-tech industry in the
> United States, Congress added another research and development credit, this
> time specifically for companies that increased their R.& D. spending from
> the previous year...

> Within a few years, the credit was being claimed by businesses with little
> technological background — fast-food restaurants, hair stylists and fashion
> designers. So Congress tried to restrict what research would qualify. The
> credit was denied for social science research and marketing...

> The failed attempts to restrict the R.& D. credit to basic research have
> been a boon for video game companies. Even when companies are merely
> creating new versions of existing games — conducting research that would
> have little value to anyone but themselves — their development processes
> usually involve enough experimental uncertainty to qualify for the tax
> break.

