LONDON, September 25, 2014 /PRNewswire/ --
TIGA, the network for game developers and digital publishers in the UK, released new findings today which show the Scottish videogame development sector is blooming, with studio headcounts, wider games industry employment, tax revenues and investment all on the up.
Employment in the Scottish videogame industry has returned to levels last seen in 2008, with a rise of seven per cent in 2013 representing a five-year high. Scotland's games development sector also now contributes more than £99 million to the UK's Gross Domestic Product (GDP).
The findings come from TIGA's definitive annual report into the state and health of the UK videogame industry Making Games in the UK Today: 2014 which is based on an extensive survey of UK games businesses, with analysis by Games Investor Consulting.
TIGA's research shows that for Scotland's games industry, between 2012 and 2013:
- The number of game development studios grew from 81 to 94, an increase of 16%;
- the number of creative staff in studios grew from 766 to 964, an increase of 26%;
- the number of jobs indirectly supported by studios rose from 1,497 to 1,762, an increase of 18%;
- combined direct and indirect tax revenues generated by the sector for the Treasury increased from £35 million to £41 million, an increase of 17%;
- annual investment by studios rose from £38 million to £45 million, an increase of 18%; and
- the game development sector's contribution to UK GDP increased from £84 million to £99 million, an increase of 18%.
This means that Scotland now represents 11.4 per cent of the UK's total games companies, up from 8.8 per cent in 2012, and 9.7 per cent of the UK's total developer headcount, up from 9% per cent in 2012. The total Scottish games industry headcount is 2,726 - 10 per cent of the entire UK videogame industry headcount.
Games Tax Relief in Scotland
The growth of Scotland's games industry in 2013 also means that the impact of Games Tax Relief (GTR) on the sector will be even greater than previously thought.
TIGA's findings show that whilst GTR protects existing jobs and investment, and thus prevents a return to decline, a larger, healthier Scottish games industry also means an increase in the impact and return on investment from Games Tax Relief, as demonstrated by the figures below.
Now, TIGA's new research indicates that over five years, GTR in Scotland will:
- create 200 new studio jobs and safeguard over 160 existing studio jobs;
- create over 360 indirect jobs and protect nearly 300 indirect jobs;
- thus creating and protecting a total of 1,020 direct and indirect jobs;
- create and protect approximately £49 million investment expenditure by Scottish studios; and
- generate £48 million in new and protected tax receipts to HM treasury
- increase the Scottish games industry's GDP contribution by £65m; and
- protect an additional £51m GDP contribution that could be lost without GTR.
Dr Richard Wilson, TIGA CEO, said:
"The Scottish games development sector is set for growth, powered by the advent of Games Tax Relief and supported by Scotland's excellent higher education institutions. Yet we can do more to enable Scotland's games development sector to achieve its potential. TIGA proposes the introduction of a prototype fund (potentially financed via the National Lottery) to help developers surmount the barriers to accessing finance; the establishment of a Creative Content Fund to co-fund new content development and IP generation; and designating dedicated games development incubators in universities to promote high technology video games clusters in Scotland and around the rest of the UK. If adopted, these measures would support start-ups and strengthen the games development sector."
Morgan Petrie, Portfolio Manager for Technology, Digital Media & Market Development, Creative Scotland, added:
"Creative Scotland welcomes the positive findings that this report highlights. We acknowledge the efforts that TIGA made in promoting the benefits of Games Tax Relief and we'll continue to work with them, and other partners, to raise the profile of the games industry as a hugely important part of the creative landscape in Scotland."
Paul Durrant, Director of Business Development, Abertay University and Governing Body member of the National Virtual Incubator (NVI) added:
"I've been involved in establishing and operating incubation-type support facilities for fledgling games companies since 1999 and it's clear to me that the UK needs the level of joined-up intervention proposed by TIGA. We must grow the volume of new IP creation in a greater number of early stage companies to maximise our chances of picking and nurturing the potential winners so that they secure success in international markets. Well-disciplined and properly resourced business incubation will help to sustain these start-ups and build them into UK companies of scale"
Colin Anderson, MD from Dundee based Denki, said:
"As an independent developer based in Scotland it has certainly felt like conditions have been improving recently, after what has undoubtedly been a tough few years for many in our industry. It is excellent to see that positive feeling quantified within TIGA's research, which clearly shows the Scottish video games industry is growing strongly once again. Government must now move quickly to capitalise on this momentum and seek to build more sustainable studios that are capable of success in a global market that is becoming more competitive every day."
Grant Alexander, Commercial Director from Dundee based Beartrap Games, said:
"Access to funding is a real issue for any start up studio, and this news can only increase investor confidence. It's great to hear that Scotland's videogame industry is going from strength to strength. We believe TIGA's proposals would further help to alleviate the challenges developers face and enable more Scottish video games businesses to emerge and to grow."
Notes to editors
Games Investor Consulting conducted four censuses concluding in July 2008, September 2010, November 2011 and December 2013 of all known British games companies (including developers, publishers, publisher studios, service companies and broadcasters with games divisions) by telephone and email, asking as many as possible extant studios for their development headcounts (excluding HR, admin, sales, marketing and commercial staff), growth expectations and freelancer count / usage.
Games Investor Consulting conducted a similar census concluding in December 2012 in conjunction with TIGA and Sustainability Unit, an independent survey company. Distribution, manufacturing, peripheral device, marketing and retail outlet companies were not profiled.
GIC takes the latest data on development headcount to scale total development expenditure, and then uses Oxford Economics' calculations to establish estimates of the development industry's GDP and tax impact.
TIGA is the trade association representing the UK video game industry. We help developers and digital publishers build successful studios, network with the right people, save money and access professional business advice.
We also have traditional publishers, outsourcing companies, technology businesses and universities amongst our membership. TIGA is 90% funded by independent UK businesses. 80% of our board members are developers and/or from UK owned businesses, and 50% of our board are UK business owners themselves. Since 2010, TIGA has won 17 business awards.
TIGA focuses on three sets of activities:
- Political representation
- Media representation
- Business services
This enhances the competitiveness of our members by providing benefits that make a material difference to their businesses, including a reduction in costs and improved commercial opportunities.
It also means our members' voices are heard in the corridors of power and positively represented in national, broadcast and UK video game trade media.
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SOURCE TIGA, the trade association representing the UK videogame industry