Just a quarter of games produced in the UK are expected to be eligible for the relief, which will only be offered to those deemed to be of cultural value. To claim the tax break, firms will have to answer questions including whether the game is set in the UK, as well as how many of its characters are from the UK.
Games industry body Tiga, which helped lobby for the relief scheme, estimated the measure would give the industry a £188m boost.
The EU’s decision comes after a seven-year battle, with Brussels initially objecting to tax breaks for what it deemed to already be a “dynamic and growing sector” despite the lack of state aid.
Yesterday, the Commission’s vice-president in charge of competition policy Joaquin Almunia said its “initial doubts have been dispelled”.
“The proposed aid for video games is indeed focusing on a small number of distinctive, culturally British games which have increasing difficulties to find private financing,” he added.