TIGA’s research is based on a survey of 52 UK games development companies in late 2016. The respondents represent a wide selection of different company types, sizes, ages, and market and platform focuses, roughly proportionate to the overall UK industry. Key findings from the survey include the following:
- 73 per cent of UK games developers made at least some use of third party finance sources in the last 12 months to cover their costs.
- Work for hire from publishers or clients was used by 56 per cent of developers over the previous 12 months and this remains the most common source of third party funding for developers.
- 31 per cent of respondents had accessed grant funding (e.g. Regional Growth Fund, Innovate UK, Games Prototype Fund, UK Games Fund, Creative England, Scottish Enterprise, Creative Europe).
- 21 per cent raised debt from a financial institution.
- 19 per cent raised equity investment from individual investors (e.g. angels or friends and family).
- 10 per cent made use of project finance.
- 10 per cent raised finance via crowd funding.
- 8 per cent raised capital from an investment fund.
- 2 per cent generated finance from corporate venture capital funds.
- 2 per cent received money from a business accelerator.
Raising finance remains a challenge for many developers:
- Equity investment from an investment fund is the most difficult to access with nearly nine out of ten respondents (89 per cent) that tried to access institutional investment failing to do so.
- 33 per cent of developers failed to access grant funding, which reflects high application levels to the UK Games Fund and the limited availability of that grant and others like it.
- 21 per cent failed to raise work for hire finance from publishers and other clients.
Research and Development Tax Relief and Games Tax Relief represent crucially important forms of finance for games developers:
- 75 per cent of respondents successfully claimed R&D Tax Relief over the last year.
- 62 per cent of developers submitted a Games Tax Relief claim in the last 12 months.
Dr Richard Wilson, TIGA CEO, said:
“TIGA’s research demonstrates that UK developers experience low success rates in accessing more substantial funding from institutional equity investment sources. Equity finance is less readily available for UK games developers in comparison to their compatriots in the USA or in other high growth British technology sectors.
“To ensure that the UK games development sector can achieve its potential and so contribute to economic growth, the Government should take action on three fronts. Firstly, it should retain and potentially enhance R&D Tax Relief and Games Tax Relief.
“Secondly, the Government should maintain and improve investment incentive schemes such as the Enterprise Investment Scheme and the start-up orientated Seed Enterprise Investment Scheme.
“Thirdly, the Government should introduce a Games Investment Fund. The Games Investment Fund could make grants or loans available to games businesses on a matched funding basis. The Games Investment Fund would also provide a commercial mentoring business advisory service, staffed by industry veterans, for games companies that access its grants or loans. The Games Investment Fund could be managed by a new British Games Institute.”
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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 game trade media.
Get in touch:
For further information, you can also contact:
Dr Richard Wilson, TIGA CEO: email@example.com