March of the Micro-Studios
LONDON, August 22, 2016
TIGA, the network for game developers and digital publishers, today released new findings from its forthcoming annual report into the state of the UK video games industry Making Games in the UK Today: 2016 which shows that 65 per cent of the UK studio population are micro-studios employing four or fewer people – up from 60 per cent in 2014. Just 16 per cent of the UK studio population employs 15 or more personnel – down from 22 per cent in 2014. However, it was medium and large sized studios that drove the headcount growth in the UK video games industry to almost 12,000 developers in year ending March 2016.
Dr Richard Wilson, TIGA CEO, said:
“Large studios are becoming as rare as hens’ teeth: only 2 per cent of studios employ more than 150 people. Yet it was the big and medium-sized studios which drove an increase in the UK’s developer headcount by an annualised rate of 7.5 per cent in the year ending March 2016.
“The prevalence of micro-studios reflects the popularity of mobile games development and a strong start-up culture in the UK’s games industry. There are now 688 games development businesses in the UK, up from 664 in 2014.
“Small studios play an important part in creating jobs and promoting innovation. Yet they are also vulnerable. Over 130 games companies closed down in the year to March 2016 (nearly 12 per cent of the entire studio population). 69 per cent of companies closing down had under 5 staff, which demonstrates that the smallest companies are the most vulnerable, especially when self-publishing.
“TIGA’s aim is to help more developers grow their businesses so that there are more studios with the ability, capacity and durability to handle large projects and to win investments from global publishers and investors.”
Both the UK’s studio population and games development workforce are growing. Studio numbers increased from 664 to 688 and employment grew from 10,869 to 11,893 in the year ending March 2016. Video Games Tax Relief is playing an important part in achieving this growth. Video Games Tax Relief reduces the cost and risk of games development and encourages investment and employment. Over the three years prior to the announcement of Video Games Tax Relief, the UK’s development headcount experienced an average annual growth rate of minus 3.6 per cent. Over the four years after the announcement, the average annual growth rate was plus 7.1 per cent.