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Support Start-ups to Scale up According to TIGA Report

  (February 11, 2018)

LONDON, February 12, 2018 /PRNewswire/ --

7 Percent of UK Studios Employ 69 Per cent of Developers

TIGA, the network for game developers and digital publishers, today released new findings from its forthcoming annual report into the state of the UK video games industry Making Games in the UK Today: 2018 which shows that the top 7 per cent of studios employ over 69 per cent of the UK's development workforce.



TIGA CEO, Dr Richard Wilson, OBE, said:

"The UK is a great place to start a business but small firms find it harder to scale up: we are ranked third for start-ups but just 13th for the number of businesses that scale?up successfully according to the OECD. This tendency also prevails in our video games sector.

"Large studios are rare as a four leaf clover - only 2 per cent of studios employ more than 150 people and only 7 per cent employ more than 50 people. But they are the bedrock of the games development sector, The largest 7 per cent of studios employ over 69 per cent of the UK's development workforce.

"The vast majority of UK games studios in the UK are micro-firms. 65 per cent of UK studios employ four or fewer full-time staff. Yet micro-firms employ less than 7 per cent of our development workforce.

"The prevalence of micro-studios reflects the continued popularity of mobile games development and a strong start-up culture in the UK's games industry. There are now 768 games development studios in the UK, up from 688 in 2016. Micro-studios remain a vital, vibrant and potentially disruptive component of the eco-system, but they struggle to raise finance.

"TIGA's objective is to help more developers grow their businesses and scale up. This is why we are calling on government to tackle market failure in access to finance by investing in growth funding for games, such as TIGA's proposed Games Investment Fund."

Both the UK's studio population and games development workforce are growing, with large studios powering much of the growth. Studio numbers increased from 688 in March 2016 to 768 in November 2017. Over the same time frame, the number of developers in full-time or full-time equivalent roles grew from 11,893 to almost 13,300. Video Games Tax Relief (VGTR) is playing a hugely important part in achieving this growth. VGTR reduces the cost of games development, derisks investment and encourages employment. Between 2008 and 2011, before VGTR, the UK's development headcount declined by an annual average of 3.1 per cent. Since the announcement of Video Games Tax Relief, our industry's headcount has grown by an average annual rate of 7 per cent.

TIGA's proposed Games Investment Fund (GIF) would make grants or loans available to games businesses on a matched funding basis. The GIF could provide funding of between £75,000 and £500,000 to games developers nationwide. Funding between £75,000 and £100,000 would be delivered as grants while above £100,000 soft loans would be matched pound for pound to ensure that games companies find new investment from other sources.

The GIF could be managed by the British Film Institute, the UK Games Talent and Finance Community Interest Company or the proposed British Games Institute, which most closely matches the GIF. It could be financed either from the National Lottery or from Grant-in-Aid money from the Government.

The GIF would have a positive impact on the UK's games industry and wider economy. The return on investment of £26.5m over 5 years therefore represents good value for money. Over the five years from 2018 to 2022, the GIF would:

  • increase headcount by nearly 1,600 staff;
  • create over 3,000 indirect jobs in the supply chain around games development;
  • encourage games companies to invest an additional £231 million in development expenditure;
  • contribute an additional £210 million in tax revenues over 5 years;
  • help 175 studios (22 per cent of total);
  • increase Gross Domestic Product (GDP) by an additional £514 million.

Research methodology

Games Investor Consulting (GIC) continuously maintains a database of all extant, closed and exiting British games companies. Between September-November 2017, TIGA and GIC conducted an email and telephone survey of British games companies involved in the development of games including studios, publishers, service companies and broadcasters with games divisions. Distribution, manufacturing, peripheral device, marketing and retail companies were not profiled. Companies were asked how many staff worked full time in development. HR, admin, sales, marketing and commercial staff were excluded. 566 companies responded or publish up to date data on headcount, representing 70% of the UK's total headcount. Estimates for the remaining companies were established by desk research from a variety of other public data and GIC sources. GIC takes the latest data on development headcount to scale total development expenditure, and then uses Oxford Economics' calculations from their report, "The economic contribution of the UK Games Development industry", to establish estimates of the development industry's GDP and tax impact.

About TIGA
TIGA is the network for games developers and digital publishers and the trade association representing the video games industry. Since 2010, TIGA has won 24 business awards and commendations and has been successfully accredited as an Investors in People organisation three times. TIGA focuses on three sets of activities:

  • Political representation
  • Media representation
  • Business services

This enhances the competitiveness of our members by providing benefits that make a material difference to their businesses, including a reduction in costs and improved commercial opportunities. It also means our members' voices are heard in the corridors of power and positively represented in national, broadcast and UK video games trade media.

TIGA CEO, Dr Richard Wilson was made an Officer of the Order of the British Empire (OBE), for services to the video games industry in the New Year's Honours list 2018.

Get in touch:

Tel: +44-(0)-845-468-2330
Email: info@tiga.org 


Web: www.tiga.org
Twitter: www.twitter.com/tigamovement
Facebook: www.facebook.com/TIGAMovement
LinkedIn: http://www.linkedin.com/company/tiga

SOURCE TIGA

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