UK video gaming trade association TIGA has analysed the state of Britain’s gaming market between December 2021 and April 2023 in its annual Making Games in the UK report.
TIGA found that the vast majority of developers in the UK - 80% - are micro studios with four or fewer members of staff, and that these studios may struggle to make a mark on the industry, and need assistance scaling up. Over the studied period, a massive 94% of studios that closed their doors were such micro studios.
10% of UK studios have between five and 15 staff members, 5% have 16 to 40, 4% have 41-49, and only 2% have 150 or more.
Mid-sized studios proved particularly robust in the report. Studios with over 41 staff members saw a 24% average increase in headcount, above the average growth rate for the sector of 15%.
In total, 251 new gaming studios were founded in Britain between December 2021 and April 2023, with a 16% increase in independent and publisher-owned studios, which rose from 1,528 to 1,801.
49% of the UK’s game development workforce is employed by studios with 150 or more employees. In contrast, only 7% are employed by micro-studios.
Britain’s ecosystem in numbers
In total, the British games industry employs 24,155 full-time and full-time equivalent staff in creative roles as of April 2023, a 15.2% increase from 20,795 in December 2021. The number of jobs indirectly supported by the industry also rose by 15.2% over the same period, from 38,348 to 44,162.
The number of studios in the UK increased by 17.8% between December 2021 and April 2023, from 1,528 to 1,801. The combined direct and indirect tax revenue generated by the gaming sector for the UK treasury rose from £1.2 billion to £1.5 billion, with contribution to the UK’s GDP rising from £2.9 billion to £3.68 billion.
Investments by game studios rose significantly, from £1.3 billion to £1.66 billion.
“The UK video games development sector is powering ahead,” said TIGA CEO Dr Richard Wilson OBE. “Employment is soaring and studios are continuing to hire at near record rates. With high growth games studios in many regions, the sector is supporting economic growth across the UK.
“Our sector’s outstanding long-term prospects are underpinned by strong consumer demand, rising Foreign Direct Investment which is attracted by our highly skilled workforce and Video Games Tax Relief, which reduces the cost of games development.
“If the UK is to win an even larger share of the growing market for video games, then the UK Government should enhance the generosity of our Video Games Tax Relief (soon to be transformed into a Video Games Expenditure Credit), introduce a Video Games Investment Fund to help more small studios to scale up and establish an Industrial Secondments Programme to drive skills development.”
Region by region
England is the UK’s largest hotbed for mobile game development, employing 89.6% of its game development workforce. Scotland employs 9.1%, followed by Northern Ireland (0.7%) and Wales (0.6%).
22.4% of the UK’s game developers are based in London, with 587 different game studios.
“While London employs over 22 per cent of the games development workforce across 587 companies, 77 per cent of all games development staff in the UK are employed outside of the capital,” said Wilson. “Approximately one-fifth of development staff are located in the South East of England, while the third, fourth and fifth largest centres of games development by headcount are the North West of England, the West Midlands and Scotland, respectively.
“Including indirect staff, games development companies support over 53,000 jobs outside of London. In percentage terms, the strongest headcount growth over the period December 2021 to April 2023 was found in the North East (47.5 per cent), Yorkshire and Humber (33.9 per cent) and Northern Ireland (33.5 per cent).”
More funding required
“TIGA's research illustrates the video games industry's strong potential to drive regional economic growth,” added TIGA chairman and Rebellion CEO and creative director Jason Kingsley OBE. “My personal experience at Rebellion Developments further reinforces this notion, as our studios actively contribute to the economic expansion of cities and regions such as Liverpool, Oxford, Warwick, and Yorkshire. By enhancing Video Games Tax Relief, improving access to finance, and bolstering skills development, we can empower and fortify the UK's video games clusters, thus making a positive impact on the overall economy of the country.”
Earlier this year, the British government increased the tax relief offered to game companies.