LONDON, October 16, 2017 /PRNewswire/ --
TIGA, the network for games developers and digital publishers, and the trade association representing the video games industry, has proposed the introduction of a Games Investment Fund (GIF) to enhance studios' access to finance, promote the development of original IP and to encourage studio growth. The GIF would make grants or loans of between £75,000 and £500,000 available to games businesses on a matched funding basis. TIGA made the comments in a new report, Sustaining Success: A Games Investment Fund (October 2017) in advance of the Chancellor's Autumn Budget on November 22nd 2017.
Tom Watson MP, Deputy Leader of the Labour Party and Shadow Secretary of State for Digital, Culture, Media and Sport, said:
"Britain's video games industry is a world leader, and it's vital that it stays that way. TIGA's proposal for a Games Investment Fund is something Labour is seriously considering as a way to boost innovation, investment and jobs in the sector. We need to make sure we sustain success in one of our most important creative industries."
Chris Law MP, Co-Chair of the All Party Parliamentary Group for Video Games in the Westminster Parliament, said:
"Establishing TIGA's proposed Games Investment Fund would boost investment and employment and help to grow the video games industry in the all of the UK's creative hotspots, including the Dundee and wider Scottish games development clusters."
Access to finance is a challenge for many UK games developers
Games developers typically struggle to raise debt finance because they have relatively few assets and little financial track record. Equally, most venture capitalists and business angels will not invest in games because of high risk levels, low knowledge levels about the industry and high, largely fixed costs of due diligence relative to the amount of equity sought.
A Solution: A Games Investment Fund (GIF)
The Government should introduce a GIF to improve developers' access to finance:
- The GIF could provide funding of between £75,000 and £500,000 to games developers nationwide. Funding between £75,000 and £100,000 would be delivered as grants while above £100,000 soft loans would be matched pound for pound to ensure that games companies find new investment from other sources.
- A commercial mentoring business advisory service, staffed by paid industry veterans, would be mandated for successful companies.
- The GIF could be managed by the British Film Institute, the UK Games Talent and Finance Community Interest Company or the proposed British Games Institute, which most closely matches the GIF. It could be financed either from the National Lottery or from Grant-in-Aid money from the Government.
The impact of the GIF
The GIF would have a positive impact on the UK's games industry and wider economy. The return on investment of £26.5m over 5 years represents good value for money. Over the five years from 2018 to 2022, the GIF would:
- increase headcount by nearly 1,600 staff;
- create over 3,000 indirect jobs in the supply chain around games development;
- encourage games companies to invest an additional £231 million in development expenditure;
- contribute an additional £210 million in tax revenues over 5 years;
- help 175 studios (22 per cent of total);
- increase Gross Domestic Product (GDP) by an additional £514 million.
Dr Richard Wilson, TIGA CEO, said:
"TIGA's plan for a Games Investment Fund would improve developers' access to finance, encourage the creation of new IP and strengthen the UK video games industry. The matched funding criteria would magnify investment and employment in the industry. The GIF would also enhance productivity growth in the sector by catalysing investment in capital, skills and innovation.
"A similar scheme in Finland operated by the agency Tekes has provided financial support to over one fifth of the entire Finnish games industry's studio population. The programme has more than paid for itself: for every euro invested by Tekes in the games industry, a return ranging from nine to 26 euros has been generated."
TIGA is the network for games developers and digital publishers and the trade association representing the video games industry. Our core purpose is to strengthen the games development and digital publishing sector. We achieve this by campaigning for the industry in the corridors of power, championing the industry in the media and helping our members commercially.
TIGA is intent on building an enduring organisation which continually improves; a business that will make a significant impact on the games industry and so benefit our membership and the wider economy. Since 2010, TIGA has won 24 business awards, an achievement which reflects TIGA's drive for improvement and to meet best practice.
The economic impact assessment of the GIF has been carried out by Games Investor Consulting. For a copy of Sustaining Success: A Games Investment Fund (TIGA, October 2017), please contact: firstname.lastname@example.org
For more information visit: www.tiga.org
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