The West Midlands’ video games sector is predicting a growth in jobs following the Chancellor’s announcement of film industry-style tax relief for computer games developers.

Recognising the importance of the sector in this year’s Budget, Alistair Darling promised to deliver the measure video games businesses had been lobbying for, providing a boost for local firms like Codemasters and Blitz Games Studios.

He said: “I will offer help to the computer games sector, similar to the steps which are helping restore the fortunes of the British film industry.

“This is a highly successful and growing industry, with half its sales coming from exports, and we need to keep British talent in this country” The government has come under pressure in the last few years to bring the UK into line with other countries such as France and Canada, which have introduced favourable tax measures to support games development and which the UK industry has said caused a “brain drain” out of the country.

Philip Oliver, chief executive of Blitz Games Studios in Leamington Spa, has been a vocal campaigner for the measure, working with the games industry trade association TIGA.

He welcomed the announcement, saying it would stimulate the economy and create jobs in the sector.

He said: “TIGA has worked tirelessly to raise the profile of our industry among government and parliamentarians.

“Today’s decision is proof that this hard work has paid off.

“It is fantastic that the government is supporting TIGA’s games tax relief and we are sure that this measure will grow the industry, create more jobs and lead to higher tax revenues for government in the future. The government has made a wise investment by committing to TIGA’s games tax relief today and the whole of the UK industry will applaud them for this decision.”

The UK has long been recognised for its strength in computer games, which contribute an estimated £1 billion to the economy according to the industry body.

According to a recent report, nearly a quarter of the world’s 100 most successful studios are based here.

But the sector has not escaped the recession - employment in the UK games development sector fell by four per cent and 15 per cent of its companies went out of business between July 2008 and July 2009

TIGA also welcomed the announcement, calling it an “inspired decision” on the part of the government and predicted it would increase employment in the sector.

The organisation’s chief executive Dr Richard Wilson said: “In backing TIGA’s games tax relief the government has chosen the future over the past, growth over decline, success over failure.

“Games tax relief will increase employment, investment and innovation in the UK video games sector.”

According to TIGA research, over the next five years games tax relief would create or protect 3,550 graduate level jobs, increase or safeguard £457 million in development expenditure and encourage developers to adopt new business models and create new intellectual property.

Dr Wilson added: “Games tax relief will ensure that the UK remains a world leading developer of video games.

“Games tax relief is good for the UK video games industry, good for UK consumers and good for the UK economy.

“For games tax relief to be announced in the budget is the decisive breakthrough that TIGA has campaigned for. “TIGA now looks to the opposition parties to give their full support to games tax relief in the Finance Bill.”