Today, TIGA, the trade association representing the video games industry, has published a new report calling for the establishment of a UK Video Games Investment Fund (VGIF) to support the growth of small and medium-sized studios in the sector that are suffering from poor access to finance. Sustaining Success: A Video Games Investment Fund (February 2023) analyses industry survey data, international comparisons, and economic modelling to outline the case for a VGIF.
Difficulty accessing capital has consistently been one of the top factors holding back many games developers in the UK. UK games studios often find it difficult to raise capital for growth. This financial challenge means that many small, start-up and innovative companies struggle to scale up and are vulnerable to closure or collapse. It can also lead to founders selling their studios before they have had an opportunity to achieve sustained growth.
The VGIF would address this funding challenge by providing 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 allocations above £100,000 would require companies to match pound for pound to ensure that games companies find new investments from other sources.
The VGIF would disburse £5 million in match-funded loans and grants to up to 35 different UK games developers per annum. The Fund’s operating costs would include the provision of investment boot camps by industry specialists for all recipients and commercial mentoring by paid industry veterans for all loan recipients. The VGIF would also actively promote loan recipients to investors.
The report calculates that the VGIF, costing an aggregate £26.5m over 5 years, would yield a net tax contribution to HM Treasury of £56.5 million (i.e., a 213 per cent return on investment by 2027) and would benefit the UK’s games industry and wider economy yielding the following impacts:
- 512 new full-time development roles would be created by 2027 (out of an industry total of 34,921 overall).
- 936 new development support roles would be created between 2023 and 2027 (63,845 overall).
- £91 million in additional investment by studios between 2023 and 2027.
- £83 million in additional tax receipts to HM Treasury would be generated between 2023 and 2027.
- £201 million in additional GDP would be generated between 2023 and 2027.
Dr Richard Wilson OBE, CEO of TIGA said:
“Difficulty accessing capital has consistently been one of the key factors holding back many games developers in the UK. TIGA’s proposal for a Video Games Investment Fund would improve studios’ access to finance and encourage the development of new IP, investment, job creation and regional growth.
“Similar schemes to TIGA’s proposed VGIF operate in Belgium, Finland, France, Germany, Spain, Australia and Canada. If the UK games industry is to realise its potential and be the best place in the world for games development, then we should introduce a VGIF.”
Jason Kingsley OBE, CEO and Creative Director of Rebellion and TIGA Chairman, said:
“The UK video games industry is a high-skilled, high-tech, and export-focused industry. Our sector has the potential to support employment and growth throughout the UK, with clusters of games development from Brighton to Dundee and approximately 80 per cent of the workforce based outside of London. TIGA’s proposal for a VGIF would reinforce growth in the UK video games sector.”
TIGA is the trade association for the UK video games industry. TIGA’s vision is to make the UK the best place in the world to develop video games. To this end, TIGA:
- engages with policymakers to create an environment favourable to video games development;
- enhances education and skills through our accreditation programme, the TIGA Games Education Awardsand our education conference; and
- promotes best practice through our membership services, including the TIGA STAR Employer Awardand the TIGA Games Industry Awards.
- conducts primary research into the games sector, surveying hundreds of companies each year about the business environment, support policies and the health of the industry.
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