INDUSTRY SURVEY | BETA
Tiga’s UK Games Industry Survey The key results ■ Between July 2008 and July 2009 the headcount at British video games studios fell by four per cent. Between July 2009 and September 2010, the UK’s studio headcount fell by another five per cent to 9,010, a nine per cent fall since 2008. Meanwhile, the global games industry’s software sales grew by 16 per cent between 2008 and 2010.
■ Nevertheless, the industry has recorded net growth in the number of games companies with 145 start-ups or market entrants. Over 80 per cent of these new companies are delivering network games as opposed to retail product, making them better placed to benefit from newer, and potentially more sustainable business models.
■ At the time of the census (October 2010), there were 9,010 people employed in games development in the UK, including developers, publishers, publisher studios, service companies and broadcasters with games divisions (figure excludes HR, admin, sales, marketing and commercial staff ). This figure is down from 9,900 in 2008 and 9,500 in 2009.
■ Overseas government support for video games development has continued to grow further and destabilised the uneven international playing field. Australia, New Zealand, Sweden, Finland, Texas and Florida have joined Canada, Germany, Japan and South Korea and increased their fiscal support for video games development.
■ At the time of the census there were 278 games companies in the UK (including developers, publishers, publisher studios and service companies). This figure rose from 264 in 2008. ■ This decline in headcount is severe and reflects a number of studio failures, but, more importantly, the closure or severe downsizing of a number of studios either owned by global companies or reliant upon global companies for business. Over the same period, 131 video games companies (including 78 studios and 32 service companies) closed, went out of business or left the industry altogether, the vast majority (84 per cent) being games development companies. ■ Although jobs have been lost and companies closed across the global development industry, the UK has been hit particularly hard compared to territories benefiting from tax breaks for games production, which have continued to grow strongly. Strikingly, while the UK development workforce has declined over the last two years, Canada’s development headcount has grown by at least 33 per cent over the same period.
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■ A brain drain to subsidised studios overseas is depleting British studios of skilled and experienced staff. A Tiga survey in 2009 found that 23 per cent of UK game development studios had lost staff to foreign countries in the preceding 12 months and of these 72 per cent indicated that their staff went to Canada. ■ Poor financial conditions globally have resulted in private funding for video games companies worldwide falling by over 22 per cent in 2009 compared to 2008. The UK fared considerably worse with funding down 92 per cent in 2009 versus 2008, although indications are that 2010 funding levels are gradually returning to 2008 levels. ABOUT THE RESEARCH: Tiga commissioned Games Investor Consulting (GIC), an independent research company, to update its July 2008 census of all known British games companies (including developers, publishers, publisher studios, service companies and broadcasters with games divisions) by telephone. In September 2010 GIC asked almost all extant studios for their development headcounts (excluding HR, admin, sales, marketing and commercial staff ) and growth expectations. The findings that follow are drawn from this census, alongside additional publically available data on the UK and global industry.
Behind the numbers AT TIGA our aim is to make the UK the best place in the world to conduct games business. We want to attract investment into the UK, increase employment, encourage innovation and promote new start up businesses in the games industry. In order to make the UK the most attractive gaming territory in the world we need reliable and valid data so we can inform Government, investors and the wider industry about our sector. Tiga therefore commissions and produces regular information about the state of the UK games industry. Our most recent research looks at the UK eco-system as a whole to identify positive new developments and assess the long-term future of the sector. The research also shows the impact of external events such as the global downturn, hardware cycles and overseas government investment in other territories. Our research highlights two significant conclusions. Firstly, the UK continues to suffer from a lack of Government interest and support. Secondly, the eco-system of the UK industry is changing. Over the last two years 145 new companies entered the market, 80 per cent of which focus on networking gaming. This illustrates the highly competitive and entrepreneurial spirit of the UK games sector, as well as its agility and ability to adapt to challenging new market conditions. Tiga is focused on supporting these new companies and pressuring Government to create the right environment for them to thrive. The UK games development sector has changed dramatically over the last two years. Not only has there been significant churn in studio numbers (131 businesses closing, 145 start-ups), but there has also been a dramatic shift towards digital distribution. At Tiga we believe there is an urgent need to continue the pace of innovation in online gaming, disseminate best practice information and advice to new start-ups and to developers moving towards self-publishing. However Government must also play its part with the introduction at a national level of measures that will power the industry forward, such as games tax relief.
There is an urgent need to disseminate best practice and advice to move developers towards selfpublishing. Dr Richard Wilson, Tiga Tiga is now advancing a clear strategy to support the industry in the light of this new data. At the political level we are campaigning for measures that will enable game developers to prosper: games tax relief, enhanced R&D tax credits, measures to improve access to finance, a flexible migration policy and action on skills and training. We are raising the profile of the industry and stressing the positive aspects of video games in the wider media Above all, we are directly helping our members to prosper and grow: creating commercial collaborations; providing free expert advice on business issues; advice on self-publishing and working with Jagex on Project Ignite to enable developers to publish their games; support to attend overseas trade shows; discounts on events and discounts from key industry service providers. In this way Tiga can help to ensure that the games development sector remains one of the success stories of the UK economy. Dr Richard Wilson, CEO, Tiga DECEMBER 2010/JANUARY 2011 | 37