Raise the Game The competitiveness of the UK’s games development sector and the impact of governmental support in other countries Prepared for: NESTA Prepared by: Rick and Nick Gibson Games Investor Consulting Limited And edited by: Juan Mateos-Garcia NESTA Date: 04 December 2008 Contents Executive Summary...............................................................................................................4 Introduction .......................................................................................................................... 7 Chapter overview ................................................................................................................7 Chapter 1: Assessment of the UK versus its competitors ..................................................... 8 United Kingdom ...................................................................................................................... 8 Sector snapshot .................................................................................................................. 8 Scale of UK games development sector................................................................................. 9 Talent pool ........................................................................................................................10 Creativity...........................................................................................................................11 Strength of UK-owned companies........................................................................................12 Access to finance ...............................................................................................................13 Canada .................................................................................................................................14 Historical outlook ...............................................................................................................14 Scale of Canada games development sector .........................................................................15 Talent pool ........................................................................................................................16 Creativity...........................................................................................................................16 Strength of Canadian-owned companies...............................................................................17 Access to finance ...............................................................................................................18 Availability of government support.......................................................................................18 France ..................................................................................................................................19 Historical Outlook...............................................................................................................19 Scale of the French games development sector.....................................................................19 Talent pool ........................................................................................................................20 Creativity...........................................................................................................................21 Strength of French-owned companies ..................................................................................22 Access to finance ...............................................................................................................22 Availability of government support.......................................................................................22 Germany ...............................................................................................................................23 Sector snapshot .................................................................................................................23 Scale of German games development sector.........................................................................23 Talent pool ........................................................................................................................24 Creativity...........................................................................................................................25 Strength of German companies ...........................................................................................26 Access to finance ...............................................................................................................27 Availability of government support.......................................................................................27 Chapter 2: Update on policy measures ...............................................................................29 Target territories....................................................................................................................29 Other territories .....................................................................................................................31 Chapter 3: Impact of policy measures ................................................................................33 UK ........................................................................................................................................33 Impact of government support on UK games development industry........................................33 Evidence of impact of government support...........................................................................33 Canada .................................................................................................................................34 Impact of government support on Canadian games development industry ..............................34 Evidence of impact of government support...........................................................................35 France ..................................................................................................................................36 Impact of government support on French games development industry..................................36 Evidence of impact of government support...........................................................................36 Germany ...............................................................................................................................37 Impact of government support on German games development industry ................................37 Evidence of impact of government support...........................................................................37 Global sales rankings..............................................................................................................39 Commentary......................................................................................................................39 Chapter 4: Future competitive indicators ...........................................................................41 Changing market conditions....................................................................................................41 2 Opportunities.....................................................................................................................41 Threats .............................................................................................................................41 Features of successful studio sectors in 2013............................................................................42 Gap analysis for the UK ..........................................................................................................46 Chapter 5: Conclusions .......................................................................................................50 Key challenges for UK games studios .......................................................................................50 Balancing original game creation with third party licence work ...............................................50 Managing rising development costs......................................................................................50 Increasing access to finance ...............................................................................................50 Maintaining a flow of new company start-ups to refresh the sector.........................................50 Generally low quality of graduates .......................................................................................50 Stopping brain drain weakening the sector in the long term...................................................50 Accessing new markets and demographics ...........................................................................51 Lack of governmental support .............................................................................................51 Rising to the challenge ...........................................................................................................51 Increasing the flow of original new games............................................................................51 Exploiting the massive potential of online gaming .................................................................51 Growing the online games services sector ............................................................................51 Exploiting synergies between converging media....................................................................52