The government is helping small businesses flourish within the gaming industry after announcing a new £4m Video Games Prototype Fund that aims to give digital startups up to £25,000 each to help them compete with large companies. We spoke to the head of the UK’s biggest gaming support group who predicts big things for gaming SMEs.
Helping gaming SMEs
Managed by the UK Games Talent and Finance Community Interest Company, the fund looks to support the development of video games within the UK’s small business community.The Department for Culture, Media and Sport hopes that it will ‘kick-start the next Tomb Raider’.
Between 2015 and 2019, the fund will offer a cash injection of up to £25,000 for each applicant/business. The money will be used to help small businesses with hiring staff, developing new talent and promoting UK innovation within the gaming sector.
Economically, smaller businesses are in a completely different league compared to studio developers, including the likes of Electronic Arts and Rockstar Games, so the fund aims to help small firms finance their latest creations.
The initiative also includes:
- Funding of up to £50,000 for developers who want to go beyond the prototype phase.
- A range of talent expansion programmes which include competitions for schools and graduates who want to move into the industry. Successful applicants will also receive mentoring from industry experts who will help them during prototype projects.
— Ed Vaizey (@edvaizey) October 12, 2015
The video game industry has been flourishing within the UK over the past few years, with non-profit trade association TIGA valuing the sector at £1.1bn.
According to the government, the British gaming industry brings nearly £5m a day to the nation’s economy, with home-grown titles such as Grand Theft Auto, Tomb Raider and Batman: Arkham Knight contributing to the UK’s coffers. The sector currently employs over 19,000 people.
During 2011 and 2013, there was a 22 per cent increase in the number of gaming companies in Britain. The UK Interactive Entertainment (UKIE) trade body has found that 95 per cent of all gaming companies are small or micro businesses, with an average of 120 employees per business.
Ed Vaizey, minister for Culture and the Digital Economy, is delighted with the new fund, as it will be able to improve the UK’s already flourishing reputation within the video games industry.
‘‘Britain’s video games punch well above their weight internationally and we need to build on this and invest in the strength of our creativity,’’ said Vaizey.
‘‘This fund will give small businesses, startups and individuals the support they need to better attract private investment and go on to create the blockbusters of tomorrow.’’
‘This fund will encourage and incentivise new talent’
This is not the first time that the government has helped fund the gaming industry. A previous government initiative called the Prototype Fund was established in 2010.
Run by Abertay University, the scheme helped Scottish games companies, including Stormcloud Games and Blazing Griffin. The fund closed down in 2014. Last year the European Commission approved tax relief measures that would help UK game developers.
This latest initiative has been met with excitement from the video games industry, including Ian Livingstone CBE, a successful author of fantasy novels and gaming entrepreneur.
‘‘The UK has a long history of developing world-class video games,’’ said Livingstone.
‘‘From Elite and Populous to Tomb Raider and Grand Theft Auto to Runescape and Moshi Monsters to Monument Valley and Plunder Pirates, UK games have made a significant cultural and economic global impact. This fund will encourage and incentivise new talent to carry on that important legacy.’’
Expert analysis – Jo Twist, UKIE CEO
SME Insider spoke exclusively to Jo Twist, chief executive officer at UKIE, who believes the fund will do great things for small British businesses.
‘‘The grants will allow small businesses to create prototypes necessary to build their portfolio, be able to take full advantage of the Video Games Tax Relief scheme, and seek other investment or deals to help them scale,’’ said Twist.
‘‘Bridging the gap between idea and funding makes a huge difference to a wealth of games businesses in the UK, many of which are keen to develop their own intellectual property.’’
Twist went on to mention that the initiative also includes mentoring services, which in her opinion, are just as valuable as the fund’s financial rewards. Twist belives that the gaming industry is growing exponentially faster than the film and music sector, and is convinced that gaming firms will experience significant growth in the near future.
‘‘A recent survey of our almost 300-company strong membership indicated that 77 per cent of companies expect a period of growth in the upcoming 18 months. Our European trade group ISFE also published a report last month suggesting the European market – particularly around mobile games – will experience double figure growth until 2017.’’
‘‘Initiatives such as the Games Fund and the Video Games Tax Relief are positive steps towards fulfilling this expected growth, but we also need to ensure we do not lose sight of the importance of access to highly-skilled, diverse professionals, as well as securing a diverse talent pipeline right from primary school level.’’
Twist gave some great advice for entrepreneurs and developers that want to break into the gaming industry, with the UKIE chief asking small firms to be patient in their decision making.
‘‘People need to understand the diversity of business models, of platforms, of development tools, of data analytics tools, as well as the range of financing options that are available to them,’’ continued Twist.
‘‘This can take time, but there are places to get support – such as trade bodies – to guide you. Networking and collaborating is the lifeblood of our sector, and the more diverse your teams are, the more you will have a game that does something different.’’
‘‘Hire someone who can focus on all of those opportunities while you have your team focusing on the creative endeavour of making the game. Discoverability is everything, and you need to be connected to as many people and opportunities you can to rise to the top.’’