The video game world was hit with the news last night that Bizarre Creations, a Liverpool based development studio was facing closure. Responsible for such games as the Project Gotham Racing franchise, and the popular Geometry Wars series, it led to their acquisition by Activision in 2007.

This was a move many thought would elevate Bizarre even further. However, titles under the new partnership failed to sparkle. Blur (not the band) received the reviews but not the sales. The poor reception was attributed to rival titles ModNation Racers and Split Second being released around the same time. More recently 007: Bloodstone a James Bond title with a unique storyline (ie. it wasn’t a film ported to a console), did little to impress critics and consumers and thus didn’t set the tills ringing as much as Activision would of liked.

Which brings us to the announcement made last night. Activision stated that it was considering both the closure or sale of the studio. Many websites were speculating on if the deed of shutting up shop had already been done as no one was available for comment from Bizarre. This is not the case. Activision are indeed looking to sell the studio, however they have taken precautionary measures and given every employee three months notice.

Merry Christmas.

This potential (although most consider it probable) closure couldn’t come at a worse time. With job losses hitting all sectors up and down the country as the coalition continues to steamroll it’s way through deficit reduction, a closure of a British based games studio is big news for the industry. In the last two years alone the number of UK studios has declined by around 9%. Why? Uncompetitive tax regimes. Tax breaks for game developers was considered prior to the election, championed by Labour, considered by Lib Dems, thrown out by the coalition. To quote good old Gideon, tax breaks for developers was ‘poorly targeted’.

The games industry is rapidly growing, yet in the UK the workforce is in a major decline. What used to be the third largest country for game development has in recent years seen a slip down the rankings as skilled staff head for pastures new (namely Canada and Korea) for much more favourable tax benefits. And who can blame them with such a poor level of support from the government?

With such a loss in studios, it makes competition for vacancies in those that remain fierce. In the North West that competition is amplified to a much higher degree. The talent is here in abundance, but the jobs simply aren’t.

And it’ll only get worse.

So, if this is the death knell for Bizarre Studios, then it is a bitter blow for the region, a kick to the nether regions for the UK games industry, and evidence to suggest Gideon’s revoking of tax incentives for developers was very poorly targeted.