UK Games Industry Predicts Growth Despite Challenges
Video Games are, unsurprisingly, big business. I wouldn't be here writing about them if they weren't, would I? The UK games industry certainly recognises this and, indicated by a survey performed by TIGA, despite any political and economic challenges raised by Brexit it's expected that the industry will thrive.
The results of the survey published today by TIGA, the trade association that represents the interests of the UK games industry, shows that the industry is on course for growth. From the growth of staff within the workforce to the money that will be taken in by these companies, there are positive signs.
However, not all is positive. Only 29% of respondents are expecting optimistic investment in their businesses, compared to 52% last year. A fewer percentage of respondents believe that their companies are performing well than the previous year (61% compared to 77%) and a smaller percentage are optimistic about future prospects (37% compared to 57%). Here are the key points from the survey:
- Employment: 75 per cent of respondents plan to grow their organisation’s workforce over the next year (compared to 77 per cent of respondents a year ago). 21 per cent expect to keep their organisation’s workforce at current levels and 4 per cent think that their organisation’s workforce will diminish.
- Economic environment: 65 per cent of respondents to the TIGA survey believe that the economic and business environment in the UK is favourable to the video games industry (up from 62 per cent a year ago). 25 per cent consider that the environment is neither favourable nor unfavourable to the sector, 11 per cent feel that it is unfavourable.
- Investment: 29 per cent of respondents to the TIGA survey said that the outlook for investment in their business (for example, in R&D, training, new games development, etc) was more optimistic than compared to 12 months ago (compared to 52 per cent of respondents a year ago). 56 per cent said that the outlook was unchanged. 15 per cent said the outlook for investment was less optimistic.
- Performance: 61 per cent of respondents reported that their company was performing ‘well’ (compared to 77 percent in 2019). 32 per cent said that their company was performing ‘neither well nor badly’. Just 7 per cent reported that their company was performing ‘badly’.
- Prospects: 37 per cent of respondents said that they were more optimistic about their company’s prospects compared to 12 months ago (down from 57 per cent a year ago). 40 per cent reported that they were neither more nor less optimistic, while 21 per cent said that they were less optimistic about their organisation’s prospects. 2 per cent did not know.
- Obstacles to success: 39 per cent of the respondents to the TIGA survey said that the principal obstacle holding back their businesses was limited access to finance. A further 36 per cent cited discoverability as the biggest obstacle. 20 per cent identified skills shortages and skills gaps. 2 per cent referred to the challenge of standing out in a competitive market, 2 per cent cited a lack of clarity around the UK’s future immigration policy and 2 per cent referred to the slow growth of the virtual reality (VR) market.
TIGA CEO Dr. Richard Wilson, had this to say regarding the results:
The UK video games development and digital publishing sector is on course for growth. 75 per cent of respondents to our survey are planning to increase employment over the coming year. Significantly, 65 per cent of games businesses in our survey believe that the economic and business environment in the UK is favourable to the video games industry. Video Games Tax Relief, which TIGA was instrumental in achieving, is fuelling growth in the sector. Games Tax Relief effectively reduces the cost and risk of games development and incentivises investment and job creation in the games industry.
The obvious pall of Brexit was then raised, with Wilson continuing to state:
However, the 2019 clouds of uncertainty, political paralysis and relative economic slowdown have cast a pall over the industry. A smaller proportion of games businesses plan to increase employment and investment in 2020 in comparison to our 2019 survey.
The Government can help to drive our industry forward by improving our access to finance and to highly skilled people. On finance, the Government should maintain and potentially enhance Video Games Tax Relief. It should also consider introducing TIGA’s proposal for a Games Investment Fund (VGIF). The VGIF would make grants or loans of between £75,000 and £500,000 available to games businesses on a matched funding basis.
With respect to skills, the Government can help by increasing the supply of well-educated graduates who are able to work in the games industry and by enabling our employers to recruit highly skilled people from abroad. Currently, EU workers make up 20 per cent of the UK games industry, while 5 per cent come from countries outside the EU. The Government should ensure that the UK’s future immigration system enables games businesses to effectively recruit highly skilled people from overseas.