THE top seven per cent of UK video games development companies employ more than 69 per cent of the country’s development workers, according to a new report.
TIGA, the network for game developers and digital publishers, yesterday released the figures as part of the findings from its forthcoming annual report into the state of the UK video games industry.
It said that both the UK’s studio population and games development workforce are growing, with large studios powering much of the growth.
Studio numbers rose from 688 in March 2016 to 768 in November 2017. Over the same period, the number of developers in full-time or full-time equivalent roles grew from 11,893 to almost 13,300.
TIGA said video games tax relief (VGTR) played an important part in achieving this growth, reducing the cost of games development, de-risking investment and encouraging employment.
Between 2008 and 2011, before VGTR, the UK’s development headcount declined by an annual average of 3.1 per cent, and since it was introduced the industry’s headcount has grown by an average annual rate of seven per cent.
Dr Richard Wilson, TIGA’s CEO, 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 two per cent of studios employ more than 150 people and only seven per cent employ more than 50 people.
“But they are the bedrock of the games development sector. The largest seven 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 seven per cent of our development workforce.”
He added: “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.”
It said the fund would positively impact on the games industry and wider UK economy, with a return on investment of £26.5 million over five years and increasing the industry headcount by nearly 1,600 staff.
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