The UK may no longer be the third-biggest game-developing market if economic conditions worsen, Tiga has said in a recent report.
Saying that developers are currently at a "severe competitive disadvantage" to foreign rivals, the trade body says that government tax breaks are in order.
Over the past year, Tiga polled companies in the UK regarding what was detrimental to their success. Foreign governments subsidizing their own markets was mentioned by 41 percent, while 31 percent said that taxes in the UK were too high.
"The UK games development industry is competing with one hand tied behind its back," said Tiga's Richard Wilson.
Wilson said the inclusion of the recently-passed 20 percent tax break in the 2009 budget would be a "welcome start", but that game companies need a program similar to Britain's Film Tax Relief program.
Something similar for the games industry would cost only £150 million, said Tiga, far less than the £600 million spent on the Film Tax Relief.
Tiga also claims that the government should back school programs specializing in maths and sciences so companies will have more recruits to choose from in the job pool. Of the developers polled, 63 percent have struggled to fill positions in the past 12 months, and 74 percent were having problems filling programmer vacancies.
More through BBC News.