TIGA identifies the danger zone for video game start-ups

TIGA outlines 5 Steps to Scaling-up the UK Video Games Industry

LONDON, Aug. 13, 2024 /PRNewswire/ -- TIGA, the trade association representing the UK video games industry, has published a new report showing that the most dangerous period for games studios is between their second and fifth year. TIGA's report, Scaling-up the UK Video Games Industry (TIGA, August 2024) includes analysis from Games Investor Consulting on 882 studios founded between 2008 and 2018. TIGA's report also outlines five proposals to enable more start-ups to scale-up and grow. 

TIGA's report reveals the following key findings, derived from data from 12 successive surveys of the UK games development sector between 2008 and 2023:

• 53 per cent of studios (468) did not survive to 2023 and only 52 per cent of studios founded between 2008 and 2018 survived to their fifth year.
• The most dangerous period for games studios is between their second and fifth year. 64 per cent of studios that closed shuttered in this 4-year window.
• Studios that fail to reach over 5 staff are particularly susceptible to failure, while those that reach over 15 staff are much less likely to fail. 86 per cent of closed/exited studios failed to grow beyond 4 staff while only 14 per cent of closed/exited studios grew above 15 staff.
• Games studios have become less able to grow over the Research Period. An average of 50.2 per cent did not change in size at all during the Research Period. An average of an additional 30.9 per cent fell in size across the Research Period.
• Most studios (83 per cent) failed to grow above 15 staff.

TIGA proposes five steps to scaling-up the UK video games industry:

1. Establish a National Games Accelerator to enable more start-ups to scale-up.
2. Introduction of a Video Games Investment Fund to provide £ for £ match funding.
3. Provision of subsidized co-working hubs for local games developers.
4. Enhance the Video Games Expenditure Credit.
5. Retain and boost the UK Games Talent and Finance CIC to support developers via the Prototype Fund and Content Fund.

Dr Richard Wilson OBE, TIGA CEO, said:

"The crucial strategic challenge facing the UK video games industry is how to enable more start-ups to scale-up and grow. The UK is a great place to start-up a studio, but growing is difficult, especially for independent studios. 53 per cent of all studios founded between 2008 and 2018 did not survive to 2023. Many studios stay small. 78 per cent of all UK games studios employ four or fewer people.

"We can help more start-ups to scale-up and grow by introducing a National Games Accelerator, games hubs, a Video Games Investment Fund, an enhanced Video Games Expenditure Credit and continuing to support the UK Games Fund's Prototype Fund and Content Fund."

Jason Kingsley, CBE, TIGA Chairman and CEO and Creative Director at Rebellion, said:

"The endemic problems and opportunities around starting up and growing to scale suggest that TIGA's policy proposals are needed to help more UK games studios grow from the danger zone (under 5 staff), where most studios close, to more commercially viable scales (above 15 staff), where most studios thrive."

About TIGA

TIGA is the trade association for the UK video games industry. Since 2010, TIGA has won 28 business awards and commendations. Our vision is to make the UK the best place in the world to develop video games. Our core purpose is to strengthen the games development and digital publishing sector. To this end, TIGA

• engages with policymakers to create an environment favourable to video games development;
• enhances education and skills through our accreditation programme, the TIGA Games Education Awards and our education conference;
• promotes best practice through our membership services, including the TIGA STAR Employer Award and the TIGA Games Industry Awards;
• conducts primary research into the games sector, surveying hundreds of companies each year about the business environment, support policies and the health of the industry.

Get in touch:
Email: [email protected]
Web: www.tiga.org 
Twitter: www.twitter.com/tigamovement 
Facebook: www.facebook.com/TIGAMovement 
LinkedIn: http://www.linkedin.com/company/tiga

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SOURCE TIGA