By Andrew McMillan, Tax Partner at Johnston Carmichael
THE UK games industry is an economic powerhouse, and one of the true pillars of the modern UK economy. At the UK Interactive Entertainment (UKIE) AGM in London last Thursday it was revealed that the industry generated £7bn in gross value to the UK economy last year, driving inward investment at a scale which other industry sectors could only dream of, as well as delivering export value through strong international sales.
Everyone knows the household names such as Rockstar and 4J Studios, and their games Grand Theft Auto and Minecraft, but the UK games industry is so much more than that. The diversity of creative IP and cross industry disrupting tech innovation is staggering, and I have full confidence that this will continue in the years ahead.
Recognising this value and continued growth potential, the UK Government’s Creative Sector Review allocated a further £5m of grant funding for the UK Games Fund (UKGF) to distribute over the next two years.
The application process was officially announced at the UKIE AGM. Whilst previously the UKGF have awarded grants in the region of £20k-£30k, this content fund will target established or scale up studios, providing targeted project funding in the region of £150k.
Our gaming clients across the UK are hugely excited about this development, and for good reason.
This level of grant funding is different to anything we’ve seen before in the UK gaming industry.
Historically it has been very challenging for gaming studios to attract grant funding at this scale, as it are often targeted more at other sub-sectors in tech.
The fact these applications are being judged by people in the games industry sets this apart. The panel who will judge applications will be made up of industry experts. These people will understand games developers’ terminology and aspirations, given their own experience, which should prove a huge benefit.
Despite such positive news around funding, the AGM also highlighted certain other challenges faced by the industry at present, including an ongoing skills gap. It is estimated that 10% of games industry vacancies sit unfilled, with the majority being senior or technical positions, as opposed to trainee roles. UKIE’s new manifesto seeks to tackle this issue, which was great to hear. The discussion around the demand for tech talent, as well as the news about this increased fund comes amid UK government plans to grow the creative industries by £50 billion and support a million more jobs by 2030. Recent figures show the games industry contributes over £5 billion in gross value added (GVA), as the demand for games continues to grow.
It’s hugely positive to see such a large pot of money being judged over, and awarded by, people who understand gaming so well.
We should see a significant impact on the industry from this funding, and I look forward to seeing how it helps power growth across our gaming sector in the months and years ahead.