Sam Rushton in Games

09/08/2018

What does Brexit mean for the UK Games Industry?

With less than a year to go until the UK is due to leave the European Union, businesses and individuals are beginning to prepare for the impact this will have on them. The following article is a personal view rather than Creative England’s policy, and is hypothetical and based on the assumption we will leave the EU next March and, regardless of where Brexit may lie on the Mohs scale, will have an economic impact for a while.

The UK Games sector is in a relatively unique position. Games can be exported to other countries digitally without the same tariffs and costs as physical goods, and is a growing market year on year. There are retail boxed versions, though digital delivery is where a majority of sales take place. For the domestic market, consoles and equipment may increase in price so consumers will be more likely to use what they already have. This will also effect equipment needed to create games, especially for smaller Indy studios working in VR or on high-end graphics.

60% of studios in the UK hire people from across the world, as well as  29% of academics teaching in UK universities being from overseas. There will likely be a talent shortage should the free movement of people cease to be, both in terms of developers as well as teachers.

On the flipside, having fewer developers able to carry out required work could increase wages as larger studios look to secure talent through offering more competitive salaries, although if the economy is weak then British developers may  decide to emigrate. Studios could focus, as a result, more on internal training programmes and apprenticeships in order to meet the gap in skills, as well as more collaborations between universities and studios.

As well as the movement of people, the movement of data is also highly important. Many games use analytics in order to check player experience and the flow of data is integral to creating high-quality games. Current data protection laws exist to enable the sharing of data, and the UK won’t diverge from these regulations upon leaving the European Union although some think we may do at a later date. Should the flow of data be hampered this would make the UK industry much less competitive than counterparts in other countries.

Accessing finance for games in the UK has always been difficult, and leaving the EU isn’t thought to increase the amount of money available in the short-term. European funded programmes are beginning to wind-down and a majority will stop early next decade. The UK government is also proposing a Shared Prosperity Fund to replace EU funding, so keep an eye out for that. However, a weak pound will make it so that international investment is seen as better value for money, with  trends increasing since the vote to leave. Investors overseas could have a game made for a fraction of the cost it would in America or the EU – as well as the Video Games Tax Relief we offer further reducing costs – could make it so that the UK industry could see a very large increase in funding from overseas. 

For that to happen, thinking more internationally is important. Attending events like Gamescom, Tokyo Game Show or GDC would be a way for UK developers to meet international financiers, but also designing and implementing games that have further international appeal would be important for exporting. Being aware of cultural differences will be necessary, so talking to specialists and understanding audiences will become important in terms of localisation. Organisations like the  Chamber of Commerce can assist with general international business activity, as can regular events by  UKTI in terms of trade. For international cultural collaborations the British Council is also worth looking towards.

Large businesses have already spoken about relocating offices and factories elsewhere, and I’ve spoken to a few developers who are also considering relocating to mainland Europe or opening a satellite studio elsewhere. Talent, finance, infrastructure and culture all play a part in these decisions though I’d imagine a lot are waiting to see the conclusion of negotiations between the UK and the EU before dedicating themselves to such activity.

Additionally, there are other considerations;

Will people be less willing to spend money on games, therefore looking more at free-to-play games or pirating them?

Will genres like roguelikes or strategy become more popular due to increased replayability?

Will Irish, Welsh, Scottish and English governments change their offer to the industry after next March?

Will the settings and inspiration of games be more varied to reach new audiences internationally?

Or will post-Brexit Britain itself be inspirational for new games?

Will the UK look towards what we have within our borders or the rest of the world for opportunity?

  • games
  • games
  • exporting
  • brexit