State of Play: The UK's games industry is set for a big year - is the Government taking notice?

• UKIE CEO Nick Poole and TIGA CEO Richard Wilson share their insights on the state of the UK games sector.
• "We have now got, what is probably the most pro games parliament in history," says Poole.
• Wilson says while there has been some good news for Government support, the UK "cannot afford to rest on our laurels".

This article is part of our UK region report, published in association with Xsolla, which offers insights from regional experts on the state of the market, a guide to the Top 50 UK Game Makers for 2026 and data on the makeup of the industry. You can download it for free here.

The UK games industry is one of the oldest in the world, steeped in history and home to some of the world’s biggest global franchises. Tomb Raider? Originally made in the UK. Grand Theft Auto? That’s Scotland’s Rockstar North (formerly DMA Design). Monument Valley? Take a bow, London studio ustwo games.

The UK’s industry includes developers and publishers like Rare, Codemasters, Frontier Developments, Rebellion, Jagex, Miniclip, Sumo Digital, King, Ubisoft, Supercell, Kepler Interactive, Tripledot, Creative Assembly and many more. Few countries can rival its strong heritage and talent base that spans across genres and platforms.

It’s not just full of top studios, talented developers and globally recognised franchises – the UK’s population are spending big on games, too. Industry trade body UKIE claims that in 2025, consumers spent £8.76 billion on video games, a rise of 7.4%. Those figures include £6.03bn on games, £2.17bn on hardware and £566m on game culture, which is described as gaming-related film and TV.

“The UK remains one of the most creative and export-driven games markets in the world,” says UKIE CEO Nick Poole. “Our industry adds over £6 billion in value to the UK economy, with 96% of UK companies exporting, a figure that puts us ahead of most comparable creative industries [It’s] something we should be genuinely proud of.” 

TIGA CEO Richard Wilson tells us: “The UK video games industry remains a success story. Our industry contributes £12 billion in gross added value (GVA), generates £2.2 billion in tax receipts to HM Treasury and employs the largest development workforce in Europe.”

The recent Making Games in the UK report from TIGA showed that the UK games industry employs 27,347 staff, though that’s a decline from 28,516 during the period of May 2024 to September 2025. For context, that’s the first decline in employment in 14 years. The number of games companies, meanwhile, is still high at 2,110, but has fallen from a peak of 2,170. 

Despite a decline during a challenging period for the global games industry, Wilson says there are clear opportunities for the UK’s sector to grow. 

“The UK has a strong pipeline of graduates, a highly skilled workforce and a large pool of micro and small studios that have the potential to grow. Technological innovation, particularly in areas such as advanced production tools, mixed reality and support services, also presents new creative and commercial opportunities.”

Core challenges

As UK industry employment contracts for the first time, a Skills Crisis report published by development and publisher training provider Skillful, published in 2024, delved into the makeup of the country’s games workforce. It found only 7% of vacant roles were open for new entrants, a statistic it said risked “creating a stunted pipeline of skilled workers, which could hinder future growth”.

The industry is further compounded by a lack of skilled mid-to-senior level employees, leading to unfilled roles. A situation that has unfolded despite numerous industry layoffs. A 2023 TIGA Skills report said 68% of studios surveyed found it “difficult” or “very difficult” to fill job vacancies.

The Skillfull report noted: “The passion and talent within the UK’s existing publishing, service and development teams are undeniable. Yet, we have seen huge turmoil in recent years with huge expansion followed by contraction whilst the core skills issues still remain.

“By fostering a robust pipeline of talent, we can equip the workforce with the necessary skills to build upon the UK’s legacy of games excellence.”

It added: “Other countries have invested heavily in competitive funding and nurtured robust talent pipelines, putting them on par with, and sometimes surpassing, the UK.”

Wilson says that when it comes to education and building a talent pipeline, it’s crucial for colleges and universities to work with studios.

“We need to ensure that education provides a high quality education for students that equips them for the world of work and which meets the needs of industry.

"Specific measures to enhance games education include encouraging student placements and industrial secondments; flexibility in the apprenticeship system to meet studio needs; V levels that provide students with sufficient breadth of learning and which enable progression from FE to HE; an effective migration system that enables studios to recruit highly skilled developers from overseas; and support for micro and small studios to invest in leadership, management and commercial skills.” 

TIGA’s recent research also pinpointed another key challenge for the sector: enabling more startups to scale-up and grow. Around 78% of studios employ four or fewer developers, while over half of all developers closed during the period between 2008 to 2018 – before the current spate of studios shutting down in the global sector-at-large.

During the period between May 2024 to September 2025, TIGA found that new studio formation fell by over 30% for the third consecutive year as startup activity collapsed. The number of startups has dropped from 281 to 137 – the lowest level in 15 years.

“We need to support the growth of our smaller studios through a combination of measures including grants to improve studios’ access to finance, an improved Video Games Expenditure Credit (VGEC) to support investment, measures to enhance games education and skills and opportunities to enhance leadership, management and commercial skills,” says Wilson.

Access to funding is also a challenge, though not one entirely unique to the UK. Poole says the funding ladder needs work and there is a clear gap for studios trying to scale from five to 50 people or from £1m to £5m in revenue.

“Higher up, we lack the kind of bold, large-scale investment you see in studios in some parts of Europe and Southeast Asia,” says Poole. “Risk aversion is pervasive right now, which is deeply frustrating because there is actually a lot of capital in the market looking for somewhere to go; the challenge is building the right structures to give investors confidence.”

Despite the figures, even in challenging times, there’s still room for studios and startups to find success. ForthStar CEO Paul Gouge, who founded the studio in 2023 off the back of building a $1 billion dollar hit in Golf Clash at Playdemic, previously told us in an interview that while times have been tough in the mobile industry, where the studio plans to operate, he’s still confident in the opportunities to find success.

“In my experience of being in video games, which is quite a long time, I’m regularly told that this is the hardest time to ever launch a games business,” Gouge said. “So this won’t be the first time anyone told me this is a really bad time to start a company.”

He added: “What I’m confident about is that the market will continue to grow and that people… I don’t see people putting their phones down saying ‘I’m never gonna pick up another phone again’.”

Government support

A key point of content in the UK games industry is the level of government support it’s received. Countries like the United Arab Emirates and Saudi Arabia are investing heavily, the latter billions of dollars, in building games hubs and attracting studios and talent. Türkiye has offered tax-free business and even support for UA and marketing. Meanwhile, Canadian provinces have historically been famous for their generous tax incentives to boost their industries.

The UK finally got tax breaks in 2014, following years of campaigning from UKIE and TIGA, but that came years after Canada blew the UK out of the water with support.

During a panel at Pocket Gamer Connects London 2025, members of the UK Video Games Council, formed to forge closer links between the industry and the Government, shared insights into their work and gave an honest assessment on historical levels of support.

“They did absolutely nothing,” said Miniclip CEO Saad Choudri, reflecting on the Government’s involvement in the industry’s growth over the past 30 years. Choudri said if he started a 100-person studio today in games, “I wouldn’t do it here in the UK”.

JECO co-founder Emily Bailey said she wants developers to get more access to finance, but that the UK is “absolutely shocking”. She highlighted one country with a much smaller economy that is about to open a prototype funding scheme giving out up to $100k. If she was starting a two-person games company game development studio, she wouldn’t do that in the UK.

Poole says historically, the games industry simply hasn’t lobbied as effectively as film and TV, resulting in VGEC sitting about five percentage points below relief available in those sectors, “with no real justification for that gap”.

“That said, I am genuinely encouraged by recent progress as the government now recognises games as one of four frontier industries with the highest growth potential in its industrial strategy,” states Poole. “We have now got, what is probably the most pro games parliament in history, reflected in cross-party support that would have been unthinkable a decade ago.”

But that could all be changing as the Video Games Council works with the Government and trade bodies push for more support.

The Government has now pledged £30 million in funding to support the next generation of games developers in the country. That includes money for the UK Games Fund, which is offering £28.5m to help games studios grow. Further money has been promised for the wider creative industries, which games companies could also tap into.

And it may sound boring, but the UK recently provided SIC codes for games publishing and development. This classification means the country can now assess the size, growth and returns of the industry. It’s behind other countries in this respect – Brazil launched a new legal framework for this in 2024 – but things are moving in the right direction.

“I was delighted by the Government’s recent announcement to invest in the UK Games Fund and expand the system of grants available to game developers,” says Wilson.

“This is really excellent news and something that TIGA, UKIE and other industry colleagues have called for. The UK’s Video Games Tax Relief (now Video Games Expenditure Credit), a measure that TIGA campaigned for over many years, has also been hugely beneficial for our sector. It helped to propel studio and development headcount growth between 2014 and 2024.

“However, we cannot afford to rest on our laurels. TIGA research shows that studios, especially small and medium sized enterprises, face acute challenges accessing finance. Additionally, many countries including Canada, France, Germany, and Finland provide very generous grant funding. This pattern is repeated with respect to tax incentives for games production.”

TIGA is recommending the Government consider three approaches to enhancing VGEC: a higher 53% relief rate for production budgets up to £23.5m increasing the rate of relief from 34% to 39%, and raising the percentage of production budgets for which developers can claim relief from 80% to 100%.

UKIE is also championing an enhanced VGEC, which Poole believes could unlock £530m in annual GVA, as well as reduced visa costs for developers and mechanisms to attract foreign direct investment into UK IP.

Industry prospects

Looking to the future, Wilson and Poole are optimistic about the UK games industry’s prospects. Indeed, 2026 could be a banner year for the UK, perhaps up there with the success Sweden has seen in the past couple of years.

GTA VI, Fable, Forza Horizon 6, s&box, the full version of RuneScape: Dragonwilds, Star Wars: Galactic Racer, Vampire Crawlers: The Turbo Wildcard from Vampire Survivors, Directive 8020 and more are either out by the time you read this or in the works for a 2026 release.

Poole says he hopes the UK can cement itself as a global hub for games IP and innovation, with studios shifting to a mindset from building games to building companies, investing in culture, long-term talent development and IP, rather than hiring and laying off people based on project cycles. 

“I also want to see risk appetite return to the industry, supported by new financing models like project finance and angel investment that spread risk more broadly,” he states.

“If the capital currently sitting on the sidelines can be unlocked, and if the government’s new measures translate into real access to talent, money and trade opportunities, I genuinely believe the UK’s best years in games are still ahead of us, and that belief is grounded not in optimism alone, but in the quality of what our studios up and down the country are already producing.”

Poole adds: “My overall message is that we should not talk ourselves down. There is a solid drumbeat of great projects being signed and innovative things happening, particularly among studios that adapted their business models early. We are also seeing a wave of new and returning IP titles being released by UK studios this year, and celebrating that strength is at the heart of our Made in the UK campaign.”

Wilson concludes that the UK games industry’s fundamentals are strong, with a deep talent pool, globally recognised creative excellence, a proven ability to innovate and adapt, and supportive institutions and policy measures.

“In the short-term, the sector will continue to adjust to global market conditions. However, with the right policy framework, particularly enhancing the Video Games Expenditure Credit, we can unlock new investment, support studio growth and create thousands of highly skilled jobs."