The UK video games industry has expanded at the fastest rate ever recorded, according to new figures released today.
The UK’s video games development sector grew to record levels last year with the headcount level of 16,836 in April, a 12.2% rise according to games industry trade body TIGA.
The number of studios in the UK increased from 812 to 1,041, with the combined direct and indirect tax revenues generated by the sector for the Treasury estimated to have increased from £747 million to £907m.
Annual investment by studios rose from £818m to £993m and the game development sector’s annual contribution to UK gross domestic product increased from £1.8 billion to £2.2bn.
TIGA chief executive Dr Richard Wilson said there were three reasons for the growth of the sector – the quality of UK firms, the expanding global marketplace and Video Games Tax Relief (VGTR).
He said: “The video games development sector is growing at the fastest rate the UK industry has experienced since our research began in 2007-08.
“A number of forces are driving growth in our industry. Firstly, the UK is one of the finest games development centres globally, with outstanding small, medium and large studios creating content that sell all over the world.
“The industry is supported by many excellent universities which educate and prepare highly skilled graduates for work in the sector.
“Secondly, the global market for video games is growing. There is strong consumer demand for mobile, PC and console games, which in turn is helping to drive growth in the UK video games sector.
“Research from Unity comparing global mobile and PC games usage for the period Jan-May 2020 with the 2019 showed a 46% increase in daily PC gaming and a 17% increase in daily mobile gaming during the lockdown.
“Thirdly, Video Games Tax Relief is enabling our sector to grow strongly. TIGA played a critical role in the long battle to win VGTR, which effectively reduces the cost and risk of games development and is incentivising investment and job creation in the games industry.
“There is a clear connection between the introduction of VGTR and employment growth in the UK games development sector.
“The UK games industry declined by an average of 3.1% annually between 2008 and 2011, before VGTR existed. Since VGTR has been available, the average annual growth rate has been 8.9%.”
TIGA said many studios still struggle to scale up, access finance and skilled staff in the growing sector.
It said that if the Government can address these challenges then the sector has the potential to grow even faster and support economic growth throughout the UK.
The TIGA report showed the total games development workforce, including contractors, grew from 16,532 to 18,279 in 2019-20, a record high, while the number of jobs indirectly supported by studios rose from 26,241 to 30,781.
Professor Gregor White, dean of the School of Design and Informatics at Abertay University, said: “These figures once again underline the importance of the video games industry to the UK economy.
“The sector already plays a significant role in the economic success of both Dundee and Scotland and I fully expect we will see continued business growth, including new start-ups and job creation, in the coming years.
“As Europe’s top video games university, Abertay plays a key role in supplying the graduate talent pipeline to local, national and international games studios and it is now important to keep building on the sector’s success, particularly as we begin to realise the extent of the challenges the wider UK economy will face post-Covid.”
