UK games industry generates £12bn annually and supports 73,000 jobs

• Regional hubs like the North West, Scotland, and West Midlands drive significant growth beyond London.
• 78% of UK game studios are very small, employing four or fewer staff.
• TIGA proposes an Independent Games Tax Credit and enhancements to VGEC to fuel growth.
• The reforms could boost GVA by billions and create tens of thousands of jobs while being self-financing.

The UK games industry generates £12 billion ($16.3bn) in annual GVA (Gross Value Added) and supports over 73,000 jobs with 28,000 developers.

That's according to a new report from trade association TIGA, which showed that the sector also contributes £2.2bn ($3bn) in tax revenues.

Moreover, the UK games industry drives regional growth beyond London, which accounts for 38% (£2.1bn) of GVA. 

Major contributions also come from hubs like the North West (£443m), Scotland (£393m), West Midlands (£362m), East of England (£362m), and others across the UK.

Struggle amidst growth

TIGA's report found that the UK games industry faces challenges attracting investment, as its Video Games Expenditure Credit offers 20.4% relief, compared to higher incentives abroad. 

Many UK SME game studios face barriers to growth due to limited assets, lack of financial track records, and the unpredictability of commercial success, with 78% employing four or fewer staff. 

To address this, TIGA has proposed three measures: introducing an Independent Games Tax Credit (IGTC) at 53% for projects up to £23.5 million, raising the Video Games Expenditure Credit (VGEC) rate from 34% to 39%, and allowing 100% of qualifying expenditure. 

TIGA advised that together, these changes could generate billions in added GVA and create tens of thousands of jobs, with each measure self-financing through higher tax revenues. 

“Our sector is a success story with considerable potential," said TIGA CEO Dr Richard Wilson. “However, our industry is not competing on a level playing field and we are at a disadvantage in the competition for inward investment because our existing VGEC is not as generous as some of the tax incentives available in other jurisdictions. 

He added: “The most effective way of driving growth in the UK video games industry is to enhance VGEC. VGEC reduces the cost of games development, which in turn encourages investment and the creation of high-skilled jobs in the sector."

You can access the full report here.