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Wednesday, 14. November 2018  


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Raise the Game

 

Starter for 6

This report, commissioned by NESTA from Games Investor Consulting, assesses the competitiveness of the UK’s games studio sector in an international context.


It profiles the games development sectors of the UK, Canada, France and Germany, with a particular focus on policy measures from national and regional governments, identifying challenges and opportunities that have emerged as a consequence of the evolution of video game markets and technology.

 

Key findings

This report shows that in spite of its high levels of technical and creative skills and its continued production of world-class games, the UK games studio sector faces important structural weaknesses. They include a lack of global scale publishers, limited access to finance and skill shortages.

These factors constrain the UK’s capacity to generate new games ideas and innovative genres. UK developers are very talented and at the technological cutting edge, but many independent studios have to rely on third party licenses to survive. The revenue flows generated with this business model are insufficient to develop original ideas.

This situation will be difficult to sustain as the industry becomes more globalised. Creativity and innovation are where UK studios have always excelled, but these two sources of competitive advantage are being severely tested by the aforementioned constraints.

It is unclear how well UK studios will be able to compete with cheaper overseas developers who are improving the quality of their output. 

The situation is worsened by international competition from countries, such as Canada, where developers receive government support. Generous subsidies make it increasingly tempting for studios (particularly those owned by publishers) and developers to relocate there. This has initiated a process of decline in the UK’s studio sector that is projected to intensify in the coming years, unless the sector receives more support from government.

But support needs to be properly targeted. Our analysis of those countries that have implemented policies to support the video game sector shows variable results.

Some Canadian provinces have implemented generous support policies that have accelerated its studios to world-class status in a very short time. However, France found that some initiatives exacerbated problems around the French studio sector’s inability to create commercially viable products.

While tax incentives have been very effective in encouraging investment into Quebec, they have not been targeted at the creation of new intellectual property by Canadian-owned studios, whose original ideas remain weak. All these questions need to be taken into consideration when assessing which potential policy initiatives should be adopted to support UK studios.

Yet immediate action is needed. Video games have achieved a mass medium status, with new genres, hardware and modes of playing contributing to a rapidly expanding global market. At the same time, globalisation has created a uniquely competitive and uneven commercial landscape for video games where UK developers face serious challenges.

Studios, government support agencies and universities all have a role to play in helping overcome these barriers, so that the UK sector remains at the forefront of creativity, innovation and growth in video game development.

http://www.nesta.org.uk/assets/Uploads/pdf/Research-Report/raise_the_game_report_NESTA.pdf

 

 

 

 



 

 


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