Ireland’s Digital Games Tax Credit: 2026 current assessment

Ireland’s Digital Games Tax Credit (DGTC) was introduced with ambitions to match the success of the Irish film and TV sector. Announced in late 2022, the 32% refundable DGTC was designed to make Ireland more competitive for game development, support indigenous studios, create high-quality employment and promote Irish and European culture through games.

Government announcements positioned the relief as a catalyst for both inward investment and the scaling of Irish-owned developers, working in tandem with Ireland’s established strengths in film, animation and technology. Over three years on, however, early outcomes suggest the credit has yet to deliver on those expectations, largely due to limited uptake and structural constraints in its design.

Expectations versus early outcomes

Post-launch, industry optimism was high. Policymakers anticipated the DGTC would attract global studios, support startups and help establish a sustainable games ecosystem similar to that created by Section 481 in film and television.

Initial results have been modest:

• By mid-2024, more than a year after launch, no company had yet claimed the credit in a tax return.
• Several projects applied for and received cultural certification, but no claims had been made as of May 2024.
• The Department of Finance noted that this delay was “not unexpected”, citing multi-year development cycles.

The first claims only began to appear in late 2024. Revenue data show that by the end of that year:

• Eight projects had received relief
• All were Irish or Ireland-based studios
• Credit amounts were under €500,000 per project

Beneficiaries included indie and mobile developers such as Gambrinous, StoryToys and smaller studios behind titles like Mars Attracts and Tribesters: Keeper of Secrets. Additional claims followed in 2025, but all projects remained small in scale.

Notably absent were large-budget game productions, AAA titles or major overseas studios. Employment in the Irish games sector remains modest, at approximately 2,000 roles, with little evidence that the credit has yet shifted that figure materially. As Imirt, the industry representative body, noted in 2025, the scheme has not yet stimulated substantial domestic growth or foreign direct investment.

Why the uptake has lagged

While appearing generous and innovative, several features of the DGTC legislation limit its real-world usefulness.

All-or-nothing project scope

The legislation only supports the development of an entire game. Studios contributing to part of a larger international project cannot qualify, even though co-development is a common and commercially important model.

This excludes a significant proportion of real industry activity. Ireland’s largest game developer, Black Shamrock, has publicly stated that none of its current projects would qualify for this reason. By contrast, jurisdictions such as the UK and Canada allow relief for contracted or partial development work, making them more attractive destinations for global publishers.

Commercial launch requirement

The credit can only be claimed once a game is completed and released. This is misaligned with industry realities, where only a minority of projects ever reach market.

The consequences are significant:

• No relief for cancelled or shelved projects.
• No support for prototype or early-stage development.
• A reluctance to factor the DGTC into funding decisions until very late in development.

Other countries have removed similar completion requirements to encourage experimentation in game development and reduce downside risk through the DGTC.

Director and shareholder liability

The scheme also imports provisions from film tax legislation that expose directors and shareholders to personal liability in the event of a clawback. This acts as a deterrent, particularly for international studios, to engage with the DGTC

By comparison, Ireland’s R&D tax credit does not include equivalent personal liability provisions, resulting in its much higher uptake and success.

Eligible costs and time limits

Originally, the credit only covered development up to launch and excluded post-release updates and live services.

Recent changes in the Finance Act 2025 seek to address this by:

• Allowing up to three years of post-release development costs.
• Extending the scheme to 2031, subject to EU approval.

These are welcome steps, but they only address part of the problem.

Ireland’s competitiveness and the road ahead

International comparisons highlight both the challenge and the opportunity. The UK’s Video Games Tax Relief has paid out over £1.4 billion since 2014, supporting hundreds of projects across all scales. Canada’s provincial incentives, particularly in Quebec, have helped create globally recognised development hubs.

Against this backdrop, Ireland’s contribution to its games industry through the tax credit has so far amounted to only a few million euro and very few new jobs.

What targeted reform could achieve

Focused changes that would realign the credit with how games are actually made are required:

• Allow co-development and contract work to qualify
  Enable DGTC claims for discrete parts of larger projects, immediately increasing Ireland’s attractiveness for international collaborations.
• Remove or relax the completion requirement
  Reduce clawback risk for studios and encourage earlier-stage investment and innovation.
• Eliminate personal liability provisions
  Bring the credit in line with the R&D tax credit and remove a key barrier to uptake by larger studios.

Each proposal will assist in achieving the scheme’s original objectives.

Conclusion: time for a post-launch update

In its current form, the DGTC cannot deliver what the Government promised. While it has supported a number of small Irish-made projects, its broader economic and investment impact remains limited.

The underlying concept is still strong. Ireland has the talent base, creative capability and policy intent to build a meaningful games sector. Recent legislative adjustments suggest that the government recognises the need for course correction.

With the refinements suggested above, the DGTC could evolve into a truly transformative incentive. In-game development, post-launch patches are expected. The same is true here. A carefully coded update to the DGTC legislation could still allow Ireland to play at the highest level in game creation.