Under its Treaty Rules on state aid, the European Commission (EC) has authorised a French tax credit aimed at encouraging video game creation.

The aim of the aid scheme is to enable video game manufacturers that are subject to taxation in France to deduct up to 20 per cent of the production costs of certain games.

This scheme has been authorised for a period of four years.

However, the tax credit may only be granted to video games that meet the criteria of quality, originality, and contributing to cultural diversity.

The Commission conducted an in-depth investigation, which began in 2006, into the proposal in order to ensure that it would not act as an industrial policy instrument in favour of the video game sector.

Initially the investigators concluded that the selection criteria in the initial notification could have given rise to a wide interpretation that would not have made it possible to ensure that the aid was exclusively dedicated to cultural goals.

As a result of this investigation, the French authorities were asked to redefine and clarify the selection criteria.

Ultimately the Commission has said that that the new, more detailed selection test makes it possible to ensure that only video games with cultural content may benefit from the aid.

"The French authorities have made significant changes to the scheme so as to essentially target video games with cultural content and minimise possible distortions of competition in the European market," said Neelie Kroes, the Competition Commissioner.