TIGA, the network for games developers and digital publishers and the trade association for the UK video games industry, has recommended that Scotland should introduce a Scottish Video Games Fund to improve studios’ access to finance and establish a Growth Accelerator Programme to promote commercial advice and investor readiness programmes to games developers. These measures would improve studios’ prospects for commercial success and enhance the Scottish video games industry. TIGA made the proposals in its Manifesto for the Scottish Video Games Industry 2016 which it published today, ahead of the election for the Scottish Parliament on May 5th 2016.
The Scottish video games industry is a success story with notable businesses and studios including Rockstar North, 4J Studios, Blazing Griffin Games, Codeplay, Denki, Delta Dna, Ninja Kiwi Europe, Reagent Games, Ruffian Games, Dimensional Imaging and Speech Graphics.
TIGA research from December 2014 indicates that Scotland had 1,050 permanent and full-time equivalent creative staff working on games development in 97 companies This represents 11.1 per cent of the UK’s total games companies and 9.7 per cent of the UK’s total developer headcount. Scotland’s games development sector supports an additional 1,920 indirect jobs. Annually, Scottish games development companies are estimated to make a direct and indirect contribution of nearly £108 million to the UK’s Gross Domestic Product (GDP).
Yet the Scottish games industry faces important barriers to growth:
- Access to finance remains a challenge. According to TIGA’s research, 52 per cent of UK games businesses are held back by a lack of capital.
- Discoverability is a significant challenge for start-up studios, particularly in the mobile and tablet space. The degree of competition in this market means that without an effective approach to discoverability the studio will struggle.
- The industry suffers from skill shortages. There are shortages of senior analysts, producers, engine programmers and above all there are skill gaps in business and commercial skills.
Dr Richard Wilson, CEO, TIGA comments:
“The video games sector in Scotland is a success story with significant potential. It is exactly the kind of industry that policy makers should be supporting: it is R&D intensive, provides high skilled employment and is export focused. Yet too many studios face difficulty accessing finance, the industry suffers from some specific skills shortages and discoverability of games is a major challenge.
“TIGA’s Manifesto for the Scottish Video Games Industry 2016 sets out a clear, concise and comprehensive programme to grow the industry. In particular, Scotland should introduce a Scottish Video Games Fund to improve studios’ access to finance and establish a Growth Accelerator Programme to promote commercial advice and investor readiness programmes to games developers. These measures would give a boost to studios, enhance the Scottish video games industry and support the wider Scottish video games industry.”
David Hamilton, Director, UK Operations, Ninja Kiwi Europe, Dundee:
"The Manifesto for the Scottish Games Industry published by TIGA sets out proposals to help grow the industry. TIGA work tirelessly to strengthen the games industry and we support the proposals included in this manifesto. The games industry in Scotland has been a huge success and the introduction of a Scottish Video Games Fund will ensure success going forward."
Andrew Richards, CEO, Codeplay, Edinburgh:
"TIGA have done an excellent job of collecting together really practical ways of helping Scotland's video games industry to grow, create jobs and export. We would like candidates in this election to take a good look at all of these well thought out proposals."
Chris Stamp, Studio Director, Kobojo UK, Dundee:
“Scotland has a wealth of creative and technical talent in the games sector which, although already punching well above its weight globally, is still far from fulfilling its full potential in terms of the direct economic benefit to the Scottish and UK economies. The measures outlined in TIGA’s Manifesto for the Scottish Video Games Industry represent some practical, achievable steps towards ensuring that Scottish video games businesses are able to bring a bigger share of the rewards from this major modern industry into our economy, and lay the path for a new generation of success stories.”
Steve Cartwright, Head of Video Games Sector Group, Henderson Loggie Chartered Accountants, Dunee:
“Scotland is already a significant industry player but has potential to really punch above its weight when it comes to games development. That won’t happen unless Government is prepared to give companies the capital, confidence and skills required to grow into global success stories. As business advisors we use our sector expertise to guide companies through the various stages of growth and ensure their business model fits their ambitions. There is no doubt that a Scottish Video Games Fund and the commercial support recommended by TIGA would deliver the boost needed for growth.”
Summary of TIGA’s Proposals
- A Scottish Video Games Fund (VGF) should be established in order to improve studios’ access to finance, stimulate new content development and IP generation. The VGF could make grants or loans available to games businesses on a pound for pound, matched funding basis. The Scottish Video Games Fund could be managed by Scottish Enterprise or by Creative Scotland.
- The Scottish Government and Parliament should encourage the UK Government to enhance Video Games Tax Relief. Additionally, the Scottish Government and Parliament should monitor the number of Scottish games businesses benefiting from the Relief and encourage more Scottish games businesses to take advantage of Video Games Tax Relief.
- The Scottish Government and Parliament should encourage the UK Government to increase the amount of money that a company can raise via Seed Enterprise Investment Scheme (SEIS) investment from £150,000 to £200,000 per annum. This reflects the rise in development budgets required to make internationally competitive games.
- The Scottish Government and Parliament should introduce a Growth Accelerator Programme to promote commercial advice and investor readiness programmes to games developers and to connect them with finance providers in order to maximise their prospects of commercial success.
- The Scottish Government and Parliament should ask the UK Government to introduce a pilot Training Tax Relief (TTR) for small and medium-sized enterprises (SMEs), initially in the creative industries. TTR would operate in a similar way to the existing R&D tax credits and would enable SMEs to offset expenditure on training, Continuous Professional Development (CPD) for staff and education outreach activities against corporation tax.
- The Scottish Government and Parliament should encourage the UK Government and Migration Advisory Committee to add specialist roles to the Shortage Occupation List. The additional roles include (but are not limited to): Game Analyst, Senior Game Artist, Senior Game Designer, Senior Producer, Engine Programmer, Machine Vision and Software Tools Engineers). This will enable games businesses to address skill shortages in highly specialised roles.
- The Scottish Government should ensure that there is a relatively high level of investment in higher education as a proportion of GDP. Additionally, Scottish universities and developers should continue to work closely together to maintain and to enhance the quality of courses (e.g. by teaching business skills), to promote knowledge transfer and to manage industry placements.
- Scotland’s universities should consider setting up Games Development Incubators to promote start-ups and to foster games studio clusters.
- UK Trade and Investment (UKTI) and Scottish Development International (SDI) should enable more UK video games businesses to maximise their export potential. Additionally, UKTI and SDI should identify, engage and persuade more major non-UK games development and publishing businesses in the world to invest in Scotland.