British Video Game Sector Reboots - InformationWeek
11:29 AM

British Video Game Sector Reboots

After four years of low scores, the games creation business is regaining strength thanks in part to lure of possible tax relief.

7 Examples: Put Gamification To Work
7 Examples: Put Gamification To Work
(click image for larger view and for slideshow)
Videogames -- one of the strongholds of British tech until recent years -- seems to have found a hidden health pack in 2012 and rejoined the battle.

According to Tiga, the non-profit trade association representing the country's games industry, after years of decline the sector grew 4% last year. Investment by studios in games production climbed from 2011's £411 million ($622 million) to £427 million ($646 million), while the number of studios based in the country rose from 329 to 448, equaling a rise in creative content development and programming staff to 9,224 from 8,888. Employment indirectly supported by studios also rose, from 16,250 to 16,864.

As a whole, the sector accounted for £947 million ($1.4 billion) of the country's gross domestic product, compared to £912 million ($1.38 billion) the year before. The industry boasts that its renewed success translates to direct and indirect tax revenues climbing £376 million ($569 million) to £400 million ($605 million).

[ Are Facebook games getting boring? Read GDC: Facebook Insists Gaming Is Growing. ]

"Recovery in the U.K. games development sector has taken off. Employment, investment and start-ups are up [and] the games development industry is growing again, said Tiga CEO Richard Wilson.

Tiga says the return to growth after several years of decline is due to the increasing prevalence of mobile and tablet devices, which have created a growing market for games, while the closure of big console-based studios has been followed by an explosion of small start-ups.

The body also says government attempts to help encourage growth are helping, too. The Games Tax Relief program to encourage U.K. game developers was supposed to start in April, but the European Commission says it needs more time to study its implications and it's now uncertain when it will kick in. Nevertheless, Tiga says the lure of the program is already starting to have positive effects, leading to investment in the U.K. games industry by major international games companies such as Activision Blizzard (The Blast Furnace), Gree (Gree UK), Konami (PES Productions) and Microsoft (Lift) in British studios.

Local games developers agree the tide is turning after a tough few years. "Mobile and Internet-based gaming provide opportunities for growth," said Jason Kingsley, creative director at Rebellion. "We have access to a highly skilled and creative workforce and Games Tax Relief will give a further boost to employment and investment. The U.K. has everything to play for."

The turnaround might be coming just in time. Once, the U.K. had the world's third largest game developer community, just behind the U.S. and Japan, but the sector claims it's seen talent lured abroad, while competing nations such as Canada, France and South Korea have been benefiting from their own versions of games tax relief. Developer headcount and investment levels remain below the 2008 peak and Tiga says 21% of startups set up two years ago have already gone under.

"Our challenge now is to help build sustainable independent games development and digital publishing businesses," said Tiga CEO Wilson.

Still, the climate for British games creation continues to improve. For example, in March as part of the annual budget process, the government injected £25 million ($38 million) into "creative industries," which identified British videogaming's strength as an area that will be one of the beneficiaries. The money included a special fund of £15 million ($23 million) for a competition to encourage more digital content creation.

Attend Interop Las Vegas, May 6-10, and learn the emerging trends in information risk management and security. Use Priority Code MPIWK by April 29 to save an additional $200 off All Access and Conference Passes. Join us in Las Vegas for access to 125+ workshops and conference classes, 300+ exhibiting companies, and the latest technology. Register for Interop today!

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
2017 State of IT Report
2017 State of IT Report
In today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.
Register for InformationWeek Newsletters
White Papers
Current Issue
Top IT Trends for 2018
As we enter a new year of technology planning, find out about the hot technologies organizations are using to advance their businesses and where the experts say IT is heading.
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll