Scottish firms hoping to succeed in the multi-billion-pound digital marketplace have been warned they may have to rip up their strategies and start again.
Professional services firm PwC said simply adapting and implementing a digital strategy may not cut it as the digital revolution continues to gather pace.
The group’s latest Global Entertainment and Media (E&M) Outlook survey predicted the UK video games sector alone would be worth £4.1 billion by 2018, and the entire E&M market including film, music and publishing would grow to in excess of £64bn from its current level of £58.6bn.
As part of that upwards curve, PwC expects digital console games to overtake the online market this year and eclipse mobile gaming uptake by 2017.
The report’s authors also forecast that 50% of the UK population would own a tablet and 73% a smartphone by 2018, and that e-books would overtake print copies within four years.
Martin Cowie, technology specialist in PwC’s private business team in Scotland, said there were significant growth opportunities available for digital businesses in Scotland an industry which is currently clustered around hubs in Dundee, Edinburgh and Glasgow.
However, he warned that firms need to have the right structure in place to benefit from the growth in digital long term.
“The entertainment and media industry is at the forefront of the digital revolution because so many of its products and services can already be delivered in digital form,” Mr Cowie said.
“It may not be long before digital revenues from print, film, publishing and music overtake physical revenues in some markets.
“Entertainment and media companies don’t need a digital strategy anymore; they need a business strategy, and a business model, which is fit for the digital age.”
Professor Louis Natanson, head of the School of Arts, Media and Computer Games at Dundee’s Abertay University, welcomed the report and said Grand Theft Auto the Dundee-created game which has become one of the world’s most successful entertainment franchises was evidence that great commercial success was possible.
“However, the future health of the games industry isn’t just about the big budgets and big titles, as important as these are,” said Prof Natanson.
“At Abertay University we’re seeing growing numbers of graduates starting their own businesses, building portfolios of work that mix building games and apps for clients, while also investing into their own intellectual property.
“We’re particularly excited by companies like Guerilla Tea, Quartic Llama and Space Budgie, who are employing staff and starting to build their companies while also pushing creative boundaries.
“The big growth potential is where computer games meet other forms of entertainment like film and TV, and other art forms like music and theatre.
“Companies based in Dundee have the potential to make creatively important games in this area, while also being commercially successful.”
Games industry body TIGA yesterday also released its finding of its annual report into the state of the UK videogames industry.
CEO Richard Wilson said: “The UK games development sector is back on track. Employment is up, investment is increasing and the sector’s contribution to UK GDP has grown to £1,016 million.”