TIGA, the network for game developers and digital publishers, today released new research on the UK video games industry which shows a surge in studio births, a spate in studio deaths and a swell in studios with zero employees. The overall studio population grew from 768 in November 2017 to 812 in November 2018.
TIGA’s research shows that in the year to November 2018:
- There was a surge in start-ups: there were 126 games start-ups or 10.5 start-ups per month (up from 6.15 start-ups per month in the period ending November 2017).
- There was a spate in mortality: 134 games companies (97 developers and 28 service companies) closed down. On an average monthly basis this represents 11.2 companies exiting the industry per month (up from 109 closures, or 5.5 per month, in the period ending November 2017).
- There was a swell in companies with zero full time employees: the number of zero full time employee studios in the UK has increased during the period from 105 to 120. This suggests that an increased number of studios have contracted their operations down to near dormant status in the last year.
- There was a spike in the studio population: studio numbers grew from 768 in November 2017 to 812 in November 2018.
- Studios continue to struggle to scale-up: the vast majority of games studios in the UK are micro-firms. 66 per cent of studios employ four or fewer full-time staff. Yet micro-firms employ less than 6.5 per cent of our development workforce. Conversely, the largest 7 per cent of studios employ over 69 per cent of the UK’s development workforce.
Dr Richard Wilson OBE, TIGA CEO, said:
“The rise in start-ups is due to a number of factors. The environment for games development is relatively favourable to start-ups. There are low barriers to entry and high perceived rewards on mobile and PC; and schemes such as Transfuzer necessitate student games teams incorporating new companies to receive their funding.
“The rise in company mortality has been driven by a variety of factors, including difficulties accessing finance. Interestingly, almost 40 per cent of businesses that closed in the period ending November 2018 did not have a single employee.
“Despite the closure of so many zero full time employee games companies in the year to November 2018, the number of zero full time employee studios in the UK has actually increased during the period and now amounts to almost 15 per cent of the population.
“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, where 66 per cent of UK studios employ four or fewer full-time staff.
“TIGA would like to see the Government retain Video Games Tax Relief and introduce a Video Games Investment Fund (VGIF) to enhance studios’ access to finance. It could provide between £75,000 and £500,000 to developers nationwide, promoting the development of original IP and encourage studio growth. This would enable more studios to survive, revive and thrive.”
Jason Kingsley OBE, TIGA Chairman and CEO and Creative Director at Rebellion, said:
“TIGA’s objective is to help more developers grow their businesses and scale up. If the Government can retain and enhance Video Games Tax Relief, enable studios to recruit highly skilled people from overseas and introduce TIGA’s proposed Games Investment Fund, then more studios will be able to advance, develop and expand.”
Notes to editors
TIGA’s data and information is based on research with Games Investor Consulting (GIC). GIC continuously maintains a database of all extant, closed and exiting British games companies including all verified discrete independent and publisher-owned games development studios. It counts as a single studio all entities with holding/parent, sister and subsidiary companies that do not represent separate development concerns. It excludes companies in the process of being liquidated as well as any company that uses games-related Standard Industrial Codes (SIC) codes but which either are demonstrably not in games (e.g. are gambling or board gaming businesses) or cannot be verified from their published company profiles as operating in games development. Between September-November 2018, 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 or in roles supporting development. HR, admin, sales, marketing and commercial staff were excluded. GIC takes the latest data on development headcount to scale total development expenditure, and then uses current ONS economic data and 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.
TIGA is the network for games developers and digital publishers and the trade association representing the video games industry. Since 2010, TIGA has won 28 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.
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For further information, you can also contact: Dr Richard Wilson OBE, TIGA CEO by email: firstname.lastname@example.org