Games industry worth as much as £1.7bn – double previous estimate

www.nesta.org.uk/press-release/games-industry-worth-as-much-as-17bn-double-previous-estimate/
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  • Nesta and Ukie publish first ‘big data’ based mapping of the UK’s games industry
  • Explosion of new games companies gives industry 22% YOY growth

The true value of the UK games industry has been unlocked by big data, showing it may be double the size of previous estimates. A map of the UK games industry is published today by Nesta in partnership with Ukie to map the industry’s value, shape and size.

The research shows that there are 1,902 games businesses in the UK and the economic value of these could be as much as £1.72 billion1 – double the official estimates for 2011 and 20122.

For the first time the games industry has been measured using ‘big data’, not official SIC (Standard Industrial Classification) codes alone. The researchers combed online product directories like MobyGames and review sites like Metacritic and GameSpot to create a new list of games companies not previously measured because the official codes did not capture them.

Key findings in the report include:

  • There are more companies making games for iOS platforms than any other - around half specialise in iOS games. A recent example of this is Fireproof Studios, who won the Apple 2012 iPad game of the year award and the BAFTA award for Best British game 2013 with their game ‘The Room’.
  • There has been an explosion in the number of new games companies, with a 22 percent annual growth in the number of active companies between 2011 and 2013. This includes some already very successful companies like ‘CSR Racing’ developer Boss Alien and 22 Cans, a Guildford based start-up led by Peter Molyneux.
  • There are 18 games industry clusters in the UK with a critical mass of games production activity, supported by more advanced broadband infrastructure and universities supplying games talent. This group is led by 12 games hubs with a particularly strong games presence: Brighton, Cambridge, Cardiff, Dundee, Edinburgh, Guildford and Aldershot, Liverpool, London, Manchester, Oxford, Sheffield and Rotherham, and Warwick and Stratford-upon-Avon.3

Jo Twist, Ukie CEO, said: “We know that the UK’s games sector is again becoming a real global success story and seeing Nesta’s estimates of there being over 1,900 games businesses in the UK, potentially generating £1.7bn in GVA, reinforces this more than ever. It’s great to see such a wide geographical reach, with games clusters now existing across Britain. We now need to build on these statistics to help support these clusters and encourage more investment and support for the sector, to make the UK truly the best place in the world to make and sell games. That is what our policy manifesto framework aims to achieve.” 

Juan Mateos-Garcia, lead author of the research for Nesta, comments: “The big data approach that we used allowed us to get a real-time snapshot of the UK games sector, based on what companies do instead of what standard industrial classification they select when they get started. As many people – including the government – have suspected there is a big discrepancy between the official statistics and the actual size and shape of the UK games sector. This report should help address this data gap, allowing industry, policymakers, educators and investors to track the geography and evolution of the sector, and put in place smart actions to support it.”

Ian Livingstone CBE, Ukie Vice Chair and BIS Creative Industries Champion, added: “As a sector, the video games industry is hugely diverse and fluid, with specialist talent working in clusters across the UK. This research shows where and why clusters of game development emerge in the UK, and the importance of access to finance, infrastructure and talent. It is important that the superb content developed by UK games studios gets the right backing to help scale to global markets. With this report we have a powerful, real-time tool to help existing and new investors identify potential investment opportunities in the sector.”

-Ends-

Footnote:

1.            About the GVA calculation: we calculated GVA per company for the two games SIC codes using DCMS (2014) and IDBR data averaged between 2011 and 2012, and scaled this by the number of companies in our sample active in 2014. This assumes that the GVA per business in games SIC codes is the same as those in the rest of our dataset.

2.            We compare our GVA calculations with official estimates using the average of 2011 and 2012 figures, instead of only 2012 figures, because of volatility in the GVA series (DCMS, 2014). This is illustrated by the fact that GVA estimates for the sector in 2012 dropped by 40% compared to 2011. Considering the average between 2011 and 2012 should improve the robustness of our estimates.

3.            About the process to identify games clusters and hubs: Games clusters have a critical mass of games production activity (that is, areas with more than 20 games companies and a share of UK’s game companies that is bigger than their share of UK companies as a whole). Within this group of 18 areas, we identify as hubs those places that satisfy the following conditions: they have above median numbers of games companies, above median levels of games employment, or both (we base this calculation on Business Registry and Employment data for the two official games SIC codes, as we do not have employment data for all games companies in our data base).

About Nesta: (www.nesta.org.uk) is the UK's innovation foundation. We help people and organisations bring great ideas to life. We do this by providing investments and grants and mobilising research, networks and skills. We are an independent charity and our work is enabled by an endowment from the National Lottery.

About Ukie: The Association for United Kingdom Interactive Entertainment or Ukie (pronounced YOU-KEY) is a trade body that aims to support, grow and promote the whole of the UK’s games and interactive entertainment industry. Founded in 2010 (although formerly known as ELSPA), Ukie’s membership includes all the major UK and global games publishers and the best of UK development talent - from promising start-ups to some of the biggest, most successful studios operating in the UK today.

Ukie works with government to champion a range of issues including age ratings, education and skills, access to finance and protecting intellectual property rights. It also works with the media to ensure true and accurate representation of the sector by raising awareness of the industry’s positive economic contribution and the societal benefits of gaming to policy makers, regulators and consumers.

Website: ukie.org.uk

Twitter: @uk_ie

Facebook: Ukie

Linkedin: Ukie

Pinterest: Ukie

For media enquiries please contact:

Laura Scarrott, Nesta, on [email protected] / 0207 438 2697

or Richie Enticknap at Ukie on [email protected] / 02075340580