TIGA clamours for government support as UK game dev jobs fall at record rate and startup activity collapses

• The UK's games industry’s development workforce fell from 28,516 to 27,347 between May 2024 and September 2025.
• New studio formation fell by over 30%.
• Mobile studio employment declined by 12.9%.
• TIGA CEO Richard Wilson wants tax changes to boost country's games sector.

UK games development is facing its “most severe downturn on record” as employment falls at record rates and startup activity collapses, according to a report from industry trade body TIGA.

Co-authored by Games Investor Consulting, the report highlights that game development employment declined by 4.1% between May 2024 to September 2025 - the first fall since 2011 and the fastest on record.

The figures for the period show that:

• 491 companies cut 3,655 full-time development roles.
• 513 companies added 2,751 jobs in the period.
• The UK industry’s total games development workforce fell from 28,516 to 27,347.
• The number of freelancers working in the development sector grew to more than 4,245 contractors.
• New studio formation fell by over 30% for the third consecutive year. The number of startups has dropped from 281 to 137 - the lowest level in 15 years.
• The number of UK games companies has fallen from a peak of 2,175 in 2023 to 2,110.
• 206 companies closed down or exited the games industry during the survey period - the second highest on record after the 2024 survey.
• Studios with more than 15 staff shed nearly 1,800 roles.
• London saw 571 development job losses, the South East 387 and Yorkshire 178. Almost every region lost jobs.
• Studios with one to four devs grew headcount by 3.2%.
• Studios with five to 15 staff increased headcount by 9.2%.
• Mobile studios saw employment fall by 12.9%.
• PC was hit by a 13.2% decline, while console-focused studios saw a 2.1% drop.

TIGA noted that the UK competes on an unlevel playing field on the international stage, citing Australia, France and Quebec as offering more generous tax incentives for games production than the UK. Countries like Türkiye have also been aggressive in offering a wide array of incentives to build up its bustling games hub.

Members of the UK’s newly formed Video Games Council were scathing of historical government support for the country’s games sector at Pocket Gamer Connects London. Miniclip CEO Saad Choudri said that if he was starting a 100-person studio in gaming today, he would not do that in the UK.

Financial challenges

Speaking to PocketGamer.biz, TIGA CEO Richard Wilson said the latest report reflects a variety of challenges facing the UK’s games sector.

"A combination of sluggish consumer games sales, poor access to finance, market saturation, over-investment during the pandemic and subsequent restructuring by large and very large games studios, especially overseas-owned studios, are the primary drivers of the decline,” he said.

Asked if the UK was impacted like the rest of the global games industry, which has seen mass layoffs and closures in recent years, Wilson said the UK faces its own specific challenges.

“Access to finance remains challenging for many small and medium-sized studios," he stated.

“Government schemes to support startups and small studios in the UK are not as significant as those provided by some overseas jurisdictions. Similarly, our Video Games Expenditure Credit (VGEC) is not as generous as the tax incentives offered by some of our overseas competitors.

“The UK Government can help propel growth in the video games sector by enhancing our VGEC and improving access to finance for smaller studios.”

Shift to contractors?

One notable stat from the report was the rise of freelance contractors as full-time roles decline. Wilson said 18.38% of the total development workforce are freelancers. Though he highlighted that across UK film, TV and animation production, self-employed staff account for 39% of that workforce.

"A second year of rising freelancer count has been caused by companies downsizing and restructuring their workforces, releasing staff into the job market both for games and for other sectors. As the growth in freelancers is below the gross reduction in development sector headcount, it is inevitable that staff will have left the games sector.

"In contrast to the period of accelerating recruitment between 2020 and 2023 when studios prioritised full-time roles, many companies have therefore returned to using contractors temporarily."

Global competition

Wilson outlined a number of initiatives the Government can enact to help the UK’s games industry back to growth and become more competitive with other countries’ generous incentives.

“The Government could introduce a Games Growth Relief with a higher rate of 53% on games with budgets of up to £23.5 million on 80% of production costs.

“This could create approximately 7,000 jobs, boost GVA by £482 million, encourage investment and enable more studios to scale up and grow. Looking ahead, the Government could also take two further important steps to enhance VGEC. The first is to raise the rate of VGEC from 34% to 39%. This could boost GVA by £436.2 million and create 6,291 jobs (including 760 development roles). 

“Second, it could increase the proportion of qualifying expenditure from 80% to 100%. This could increase GVA by £731.7 million and generate 10,551 jobs (including 1,292 developers). The Government can also help smaller studios via the UK Games Fund by increasing prototype funding from £30,000 to £100,000 and content funding from £150,000 to £250,000.”

The UK Government has implemented some new measures to support the UK’s games industry over the past year. This includes the £30 million Games Growth Package that will provide £10m annually over the next three years to support startup studios.

Extra investment could also potentially be obtained from the wider £380m support package for the country’s creative industries at large, £150m of which was earmarked for regional funding. Some updates were also recently made to VGEC rules as part of the UK Budget.

The UK games industry recently just got SIC codes, a framework that means the government can more accurately assess the size and value of the UK’s decades-old games industry. It has historically sat under the broader software and IT categories.